At the end of 2012, the Second Circuit Court of Appeals issued an opinion allowing an employer in Connecticut to bring suit in Connecticut against its employee for electronic data theft, even though the employee actually lived and worked in Canada.

In MacDermid, Inc. v. Dieter[1], MacDermid is a specialty chemical company located in Waterbury, Connecticut.  Dieter lived in Ontario, Canada, and worked there as an account manager for MacDermid.  MacDermid stored confidential and proprietary electronic data on its computer servers in Waterbury.  Employees could access that information only by accessing the Waterbury servers.  MacDermid, quite wisely, made all employees aware that the e-mail system, and their confidential and proprietary information, was stored on the Waterbury servers.  MacDermid also had employees agree in writing to safeguard and properly use MacDermid’s confidential information, and that they were not authorized to transfer such information to a personal e-mail account.

MacDermid sued Dieter in Connecticut, alleging that soon after Dieter learned she would be fired, she used her MacDermid e-mail account to obtain confidential data files from MacDermid’s servers in Connecticut.  She then sent this confidential information to a personal e-mail account.

Dieter tried to have the suit dismissed, arguing that since she lived and worked in Canada, she could not be sued in Connecticut.  The Court sided with MacDermid, based on a Connecticut statute which gives a Connecticut court jurisdiction over a person who uses a computer, or computer network, located in Connecticut.  Also important to the decision, was the fact that MacDermid made Dieter aware that the e-mail system and computer servers were located in Connecticut, and that she had agreed in writing to safeguard the information, and not transfer the information to a personal e-mail account.  Dieter’s knowledge that the e-mail system and confidential information were maintained in Connecticut, and her signed agreement to safeguard this information, influenced the Court to find that it was fair under due process standards to allow Dieter to be sued in Connecticut.

In our global economy, and with the increasing use of mobile devices and the cloud, many companies have employees across the country, or across the world.  It is important for companies to take a moment to understand the location and flow of their data.  They can then institute policies, procedures and employee agreements to protect their data, and give themselves recourse in the case of a rogue employee.  MacDermid had the forethought to have such policies in place, which allowed them to sue Dieter in their backyard, rather than in Canada.

[1] 2012 U.S. App. LEXIS 26382

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