Employers Can Use the Federal Computer Fraud and Abuse Act to Combat Labor Union Mass Email Campaigns, Sixth Circuit Rules

With its decision in Pulte Homes, Inc. v. Laborers' International Union of North America, the Court of Appeals for the Sixth Circuit has extended the reach of the federal Computer Fraud and Abuse Act ("CFAA") to mass e-mail and mass telephone call campaigns that diminish the operability of a company's e-mail and telephone systems.

In Pulte, homebuilder Pulte Homes, Inc. ("Pulte"), terminated a construction crew member, allegedly for misconduct and poor performance. Shortly thereafter, the Laborers' International Union of North America ("LIUNA") began a campaign in which it "bombarded" Pulte's sales offices and executives with thousands of emails. LIUNA also hired an auto-dialing service and requested that its members make thousands of phone calls to Pulte. The emails overloaded Pulte's systems, which stalled business operations because its employees could not access business-related e-mails or send e-mails to customers and vendors. The calls clogged access to Pulte's voicemail system and prevented its customers from reaching its sales offices and representatives.

Pulte filed suit alleging, among other claims, violations of the CFAA, for knowingly causing "the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization" to a computer. (18 U.S.C. § 1030(a)(5)(A)). The trial court dismissed Pulte's transmission claims under the CFAA, holding that Pulte failed to state a claim that LIUNA intentionally caused damage to Pulte's computers.

The Court of Appeals for the Sixth Circuit reversed the trial court's decision, ruling that Pulte had alleged facts sufficient to show the intent necessary to plead a transmission claim. According to the Court, Pulte's allegations that LIUNA had instructed its members to send "thousands" of emails and to "fight back" made it plausible that LIUNA understood that its actions would damage Pulte's technology systems and thus were sufficient under the CFAA. The Court also found that Pulte had adequately pled damages by alleging that LIUNA's actions "diminished Pulte's ability to use its systems and data because they prevented Pulte from receiving at least some calls and accessing or sending at least some e-mails."

The Pulte decision is important because it appears to set a low bar for pleading the facts necessary to satisfy, at least at the motion to dismiss stage, the intent and damages components of a CFAA transmission claim. To the Sixth Circuit, simply sending a large volume of emails or directing a high volume of telephone calls to a company, without more, is sufficient under the CFAA to show that the sender (or the organizer) intended to damage the company. Also important, the Pulte decision lowered the bar for transmission claims in that a company's technology systems need not be rendered either temporarily or permanently inoperable in order to prove the damages required under the CFAA. Rather, the defendant's actions need only cause the functionality of a system to be "diminished."

If you have any questions regarding how the Pulte decision may impact you or your clients, please contact Joseph A. Martin, Co-Chair of the Intellectual Property Group at Archer & Greiner, P.C., at (856) 354-3136 or by email at jmartin@archerlaw.com, or Kevin A. Sachs, a member of Archer's IP Group, at (856) 354-3068 or at ksachs@archerlaw.com.

DISCLAIMER: This client advisory is for general information purposes only. It does not constitute legal advice, and may not be used and relied upon as a substitute for legal advice regarding a specific legal issue or problem. Advice should be obtained from a qualified attorney licensed to practice in the jurisdiction where that advice is sought.