Trade Secrets and Computer Crimes

As our readers know, my law firm will only represent employees in disputes over non-compete and non-solicitation cases. Frankly, we don’t believe non-competes and similar restrictions on your right to earn a living should be upheld…in our opinion they are against sound public policy.

We are seeing more and more corporations adding to their lawsuit against former employees allegations of violatons of the Virginia Trade Secret Statue as well as the Virginia Computer Crimes Act. In my opinion most of these allegations are “fluff” and have no merit and now a federal judge in Alexandria, Virginia has given us more support of our position in the court’s decision in Othentec Limited v. Jeffrey Phelan, and others (decided May 12, 2008).

The case involved an entrepreneur who started several corporations to market optical imaging technology, including a company later operated by his son-in-law. The entrepreneur and his son-in-law had a “falling out” and the entrepreneur filed suit against the son-in-law alleging, among other things, violations of the Virginia Computer Crimes Act (VCCA)(Va. Code § 18.2-152.3) and the Virginia Uniform Trade Secrets Act(VUTSA)(Va. Code § 59.1-336) in the operation of his business.

In analyzing the case, the court noted the three elements of committing a violation of the VCCA are:(1) using a computer or computer network; (2) without authority; (3) intending to obtain, embezzle, or convert the property of another. The court found no such evidence existed and dismissed the allegation. Likewise, the court noted the VUTSA makes it illegal for a person to misappropriate trade secrets from another. The court found that no evidence had been presented that a “trade secret” had been taken or used and dismissed this portion of the case as well.

This case is instructive to those employers who file “frivolous” allegations that a departing employee has violated either the Trade Secrets Act or the Computer Crimes Act.

A win for the little guy….and Kudos to the court!

Dan Frith

Dan Frith

Dan Frith has over 25 years of experience representing individuals and families in cases of medical malpractice throughout Virginia. He has been named "Best Medical Malpractice Attorney" by Roanoker Magazine and is a member of the Million Dollar Advocates Forum. To speak with Dan, contact him by email at dfrith@frithlawfirm.com.