Continental Group, Inc. v. KW Property Management, LLC

The Cyber Blog IndiaCase Summary

Can it be a case of "exceeding authorised access" when an employee intentionally shares their employer's confidential information with its competitor?

Continental Group, Inc. v. KW Property Management, LLC
622 F.Supp.2d 1357
In the United States District Court for the Southern District of Florida
Case Number 09-60202-CV
Before District Judge J.I. Cohn
Decided on April 22, 2009

Relevancy of the Case: Can it be a case of “exceeding authorised access” when an employee intentionally shares their employer’s confidential information with its competitor?

Statutes and Provisions Involved

  • The Computer Fraud and Abuse Act, 18 U.S.C. § 1030

Relevant Facts of the Case

  • The parties were competitors in the condominium property management business in Florida. The second defendant, Kravit, is a former employee of the plaintiff.
  • Kravit copied and removed electronic files from the plaintiff’s computer. She had no business purpose in accessing them. She also accessed and removed files related to soliciting the plaintiff’s employees.
  • She never left her employment despite submitting her resignation letter to the plaintiff. However, with the first defendant, she violated the plaintiff’s prohibition on soliciting its employees. The first defendant knowingly interfered with Kravit’s enforceable restrictive covenant agreements.
  • The first defendant used and disseminated the valuable confidential information she had removed. She was, at all crucial times, an agent of the first defendant.
  • The plaintiff sought a preliminary injunction to force the defendant from retaining or using its confidential information and to wipe their computers. The plaintiff also sought the first defendant to terminate Kravit’s employment and restrain her from working in the property management domain in Florida.
  • On the other hand, the defendants moved to dismiss the plaintiff’s claims.

Prominent Arguments by the Counsels

  • The plaintiff’s counsel asserted that she exceeded her authority and accessed the protected computers, causing loss or damage in investigation and remedies over $ 5,000. The first defendant obtained the plaintiff’s confidential information, violating the contract between the plaintiff and Kravit.
  • The defendants’ counsel submitted that she already had access to the files because of her employment. Hence, she had not exceeded her authority. Further, the first defendant had no control over Kravit’s actions as she did not start working for them. Moreover, the alleged confidential information was already publicly available.

Opinion of the Bench

  • Kravit did not exceed her authorisation in downloading various files. As an employer, the plaintiff had the right to define and control authorisation to access its computer systems.
  • The plaintiff could not show that the first defendant knew of or approved of Kravit’s actions.
  • The plaintiff spent a lot of work and labour compiling the information. This effort raised the level of the information to valuable confidential information in the final compiled form.
  • The first defendant benefited from receiving the compiled information. Thus, the information also qualifies as having a legitimate business interest.
  • As a result, Kravit breached her agreement with the plaintiff by using its documents in her employment with the first defendant.

Final Decision

  • The bench granted the plaintiff’s motion to amend and supplement preliminary injunctive relief only to the extent that that court considered the injunctive relief.

Anjali Agrawal, an undergraduate student at the NALSAR University of Law, prepared this case summary during her internship with The Cyber Blog India in May/June 2022.