Shurgard Storage Centers, Inc. v. Safeguard Self Storage, Inc.

The Cyber Blog IndiaCase Summary

Sharing of confidential information by employees while acting as an agent of the employer's competitor

Shurgard Storage Centers, Inc. v. Safeguard Self Storage, Inc.
119 F.Supp.2d 1121
In the United States District Court for the Western District of Washington
Case Number C00-1071Z
Before District Judge Zilly
Decided on October 30, 2000

Relevancy of the Case: Sharing of confidential information by employees while acting as an agent of the employer’s competitor

Statutes and Provisions Involved

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

Relevant Facts of the Case

  • The plaintiff is an industry leader in full and self-service storage facilities and develops top-quality store centres. The plaintiff has appointed a dedicated marketing team for their business.
  • The marketing team has access to crucial information that enables the plaintiff to obtain the preferred sites.
  • The defendant is a direct competitor of the plaintiff and approached the plaintiff’s Regional Development Manager. Due to his managerial position, he had access to the plaintiff’s confidential business plan and trade secrets.
  • He continued to be a plaintiff’s employee but acted as a defendant’s agent. He emailed the plaintiff’s confidential information to the defendant without authorisation or approval.
  • The defendant continued to obtain the plaintiff’s confidential information by hiring other employees with intimate knowledge of the plaintiff’s business model and practices.
  • The defendant seeks to dismiss the case on the grounds that the plaintiff has no reasonable ground to file relief under the Computer Fraud and Abuse Act (CFAA).

Prominent Arguments by the Counsels

  • The plaintiff’s counsel argued that the authorisation for its former employees ended when they started acting as agents for the defendant.
  • The defendant’s counsel submitted that CFAA would only apply when the release of information would affect the public. Further, CFAA is only applicable to outsiders and not employees.

Opinion of the Bench

  • Employees lost their authority to access data from the plaintiff’s computers when they started acting as the defendant’s agents.
  • The language of CFAA is unambiguous. The defendant’s argument on the applicability of CFAA is not acceptable.
  • The words “integrity” and “damage” apply to unauthorised access of the defendant using the plaintiff’s employees for the disclosure of trade secrets and confidential business information belonging to the plaintiff.

Final Decision

  • The court rejected the defendant’s motion to dismiss the plaintiff’s claim under CFAA.

Anjini Pandey, an undergraduate student at Dr. Ram Manohar Lohiya National Law University, prepared this case summary during her internship with The Cyber Blog India in May/June 2022.