Court Finds Computer Fraud and Abuse Act Claim is Subject to Arbitration Agreement

TAKEAWAY: A Computer Fraud and Abuse Act claim that touches matters covered by an arbitration agreement is arbitrable.

In Torbit, Inc. v. Datanyze, Inc., 2013 WL 572613 (N.D. Cal. Feb. 13, 2013), the defendant moved to compel arbitration of a Computer Fraud and Abuse Act claim under an arbitration agreement that provided that “all claims ‘relating to or arising out of our employment relationship’ are subject to arbitration.”

The Court found that the CFAA claim touched matters covered by that arbitration clause because the factual allegations supporting the claim were that “Mr. Semin [the employee] ‘intentionally and without authorization’ accessed Plaintiff’s computers and obtained valuable information, including Playbook, from such computers.” Plaintiff is the employer. The wrongful access was alleged to have taken place during and following Semin’s employment. Accordingly, the Court ruled as follows:

Plaintiff has alleged that Mr. Semin engaged in unauthorized computer activity and improper use of Plaintiff’s proprietary information during the course of his employment. Such conduct “touches matters” that “relat[e] to or aris[e] out of” the Agreement because the Agreement covers the copying of Plaintiff’s information to Mr. Semin’s personal computer and the proper usage of that information. See, e.g. Compl. ¶¶ 12–13. Therefore, the First and Fifth Causes of Action against Mr. Semin are arbitrable.

If you have any questions or would like to talk computer fraud, data security or privacy, please feel free to give me a call (469.635.1335) or email me (stuma@brittontuma.com).