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Legal Report September 2006


INTELLECTUAL PROPERTY. A federal appeals court has ruled that an employee violated federal law when he destroyed information on his employer’s laptop computer. The employee erased both confidential company files and documents that indicated he was planning to steal that data and start his own, competing, company.

International Airport Centers (IAC) hired Jacob Citrin to work in its real estate division. IAC provided Citrin with a laptop to record data and collect information on potential purchases. Before beginning work with IAC, Citrin signed a noncompete agreement that prohibited him from establishing a business that would compete with IAC in real estate.

Despite the noncompete agreement, Citrin decided to quit working for IAC and go into business for himself. Before returning the laptop to IAC, Citrin deleted all the data on the laptop. This information not only concerned IAC’s real estate division but also contained evidence that Citrin intended to use such information in setting up his own business. To ensure that the information was deleted, Citrin used a computer program designed to prevent forensics experts from retrieving the data. The program not only deleted the information but it also wrote over the deleted files.

IAC filed a lawsuit against Citrin, claiming that when he used the computer program to delete company information, he violated the federal Computer Fraud and Abuse Act, which makes it illegal for anyone to “knowingly cause the transmission of a program, information, code, or command, and as a result of such conduct, intentionally cause damage without authorization, to a protected computer.”

Citrin argued that IAC could not bring suit against him under the law because simply pressing a delete or erase key could not be construed as a “transmission.” He further argued that if this standard were applied, it could turn any typing on a computer keyboard into a criminal act just because it transmits a command to the computer. The U.S. District Court for the Northern District of Illinois agreed with the defendant. The court dismissed the case, and IAC appealed the decision.

The U.S. Court of Appeals for the Seventh Circuit reversed the lower court’s decision and reinstated the lawsuit. The appellate court found that the precise mode of transmission was not as important as another part of the statute that prohibits “intentionally accessing a protected computer without authorization, and as a result of such conduct, recklessly causing damage.”

The court found that Citrin’s authorization to access the laptop was terminated when he engaged in misconduct and decided to resign from IAC in violation of his noncompete agreement. (International Airport Centers v. Citrin, U.S. Court of Appeals for the Seventh Circuit, No. 05-1522, 2006)

EMPLOYEE MONITORING. In a recent appellate decision, a court has ruled that singling out an employee and then monitoring his work cannot be construed as harassment unless the monitoring results in some sort of adverse employment action such as demotion.

In 1987, the City of Albuquerque hired Oliver Tapia. From April 2000 to August 2002, Tapia worked as a field investigator for the city’s public works department. In 2001, Tapia reported to his union that his supervisors Tina Archuleta and Barbara Romero were harassing him and subjecting him to discrimination.

He complained that he was treated unfairly by being required to follow policies and meet job requirements that were not required of other employees in similar positions. The union sent a letter to the head of Tapia’s department, Sheron Matson, stating that if Tapia continued to be discriminated against, it would file a formal grievance. Matson replied to the union, asking for specific incidents of discrimination so that she could address the issue. The union did not respond and did not file a grievance. Matson did not conduct an investigation into the matter.

In early November 2001, Tapia requested a transfer, citing his dislike of Archuleta and Romero as the reason for the request. The request was denied. When Tapia was informed of the denial, he said that if he had to return to the same department, he was afraid he “would knock her head off,” meaning Archuleta or Romero. Tapia was warned that this statement was a serious threat.

On November 19, 2001, Tapia filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging that he had been retaliated against for making his discrimination claim. According to Tapia, Matson had been monitoring his work more carefully than that of other employees. The same day, Matson gave Tapia a letter warning him to stop making threats against his coworkers and that another incident could lead to termination. Matson was not aware of Tapia’s EEOC claim.

In July 2003, Tapia again requested a transfer and a new job. He received the transfer, but the open position went to someone else. Tapia filed a lawsuit against the city, claiming that he was retaliated against because he was required to do jobs others weren’t required to do, disciplined for making threats, denied the job he applied for, and subjected to monitoring by his employer. The city requested summary judgment—a ruling based on a hearing of the facts of a case without a trial.

The U.S. District Court for the District of New Mexico granted the summary judgment, finding that none of Tapia’s claims indicated that he suffered an adverse employment action because of his EEOC claim. The only issue that came close, ruled the court, was Tapia’s claim that his work had been monitored. In this case, the court determined that the monitoring did not rise to the level of an adverse employment action. Tapia appealed the decision.

The U.S. Court of Appeals for the Tenth Circuit upheld the summary judgment. The court ruled that employee monitoring could be considered an adverse employment action only if the employee were followed or treated in a hostile fashion. However, Tapia could provide no evidence to support his claim of harassment. Matson had monitored Tapia’s work—asking coworkers to check his report results, checking and photocopying his log book, and timing him to see how long it took him to arrive at a job and complete it. However, the court noted that the monitoring did not lead to any adverse employment action. No change occurred, ruled the court, to Tapia’s job, pay, or benefits. (Tapia v. City of Albuquerque, U.S. Court of Appeals for the Tenth Circuit, No. 05-2028, 2006)


PRIVACY. The European Court of Justice has ruled that an information-sharing agreement between the United States and the European Union (EU) is invalid because it violates EU laws. The agreement required that airlines provide personal data on every person flying into the United States. While the case was argued on privacy grounds, the court voided the agreement based on its finding that the U.S. is using the data for police matters, rather than for commercial purposes.


DISCRIMINATION. The Equal Employment Opportunity Commission (EEOC) has issued guidelines for avoiding race and color-discrimination claims. The guidelines stress that employers must avoid subtle forms of racial discrimination in addition to the more obvious legal infractions.

The guidelines note that discrimination is evident when an employer makes a statement such as “I refuse to hire a Hispanic man for a job.” However, unconscious bias can also provide grounds for a discrimination claim. For example, statements such as “we’re looking for a cleancut image” might be perceived as racial stereotyping.

The EEOC warns that what employers see as playful banter can be considered racial discrimination in certain circumstances. For example, the EEOC notes that employees who make karate chops when they see their Japanese coworker have committed racial harassment.

Workplace policies must be neutral, according to the guidelines. Even innocent policies—such as strict height and weight requirements or dress codes that dictate hair lengths or styles—may be violations if they are not strictly necessary for business purposes.

COUNTERFEIT DRUGS. The U.S. Food and Drug Administration (FDA) has announced that, beginning January 1, 2007, it will require drug distributors to provide documentation of the chain of custody its products travel through before being sold to consumers. This provision was delayed in 2004 due to concerns that the technology was not available to successfully track items. Though the FDA notes that tracking systems are not in widespread use, the agency “can no longer justify not implementing these regulations.”

However, the FDA will allow companies to phase in the tracking, focusing first on high-risk drugs. The agency plans to introduce a draft policy guide outlining the types of drugs that are of greatest concern. The guide will be available for public comment.

Though the requirement is technology-neutral, the FDA urges companies to use electronic track-and-trace technology combined with RFID systems.


MINE SAFETY. A bill (S. 2803) designed to improve mine safety and protect the health of mine workers has been approved by both houses of Congress and is awaiting the President’s signature.

The bill would require mine operators to adopt and maintain an accident response plan for when miners are trapped. Under the bill, the plan would include redundant local communications systems, emergency air supplies, escapeways, emergency training, and wireless communication systems to allow contact between trapped miners and officials on the surface.

To encourage new technology, the bill would provide grants for those developing new mine safety equipment. S. 2803 would also establish an interagency working group to share technology, research, and developments in mine safety and emergency response.

CARGO SECURITY. Two cargo security bills (S. 2459 and H.R. 4954) are pending in Congress. The two are companion bills. Lawmakers are expected to merge the two into a single bill.

S. 2459, the GreenLane Maritime Cargo Security Act, has been approved by the Senate Homeland Security and Governmental Affairs Committee and has been taken up by the Senate. The bill would establish a program to certify all supply chain participants to increase security. The bill would also set minimum security standards for all cargo containers entering the United States and create a joint operations center to coordinate maritime commerce at a federal level.

H.R. 4954, also referred to as the Security and Accountability for Every Port Act, or the SAFE Port Act, has been approved by the House and has now been taken up by the Senate. The bill would establish security standards for cargo containers and require nuclear and radiological detection screening at all U.S. seaports. The bill would also provide an extra $400 million annually in port security grants.

DATA SECURITY. A bill (H.R. 4127) that would require that companies protect the personal information of customers has been approved by the House Energy and Commerce Committee, the House Judiciary

Committee, and the House Financial Services Committee. The bill has now been taken up by the full House.

H.R. 4127 would require that any company that holds or transmits individuals’ personal information establish security to protect that information. The bill would also require that information brokers setup reasonable procedures to verify the accuracy of information they collect, assemble, or maintain. H.R. 4127 prohibits information brokers from obtaining or attempting to obtain personal information through false pretenses. The bill defines false pretenses as making false statements or representations or providing counterfeit, lost, stolen, or fraudulently obtained documents.

COUNTERFEIT DRUGS. A bill (S. 2668) introduced by Sen. David Vitter (RLA) would require that companies incorporate RFID tagging technology, tamper-indicating technologies, and security packaging into all prescription drugs. These technologies would be used only to authenticate the integrity of the drugs and would not be used to transmit any identifying information about healthcare practitioners, consumers, or advertisers.

S. 2668 has no cosponsors and has been referred to the Senate Health, Education, Labor, and Pensions Committee.



EVACUATION PLANS. A new Oklahoma law (formerly S.B. 1709) requires that cities and towns in the state develop evacuation plans. The plans must give instructions on how to evacuate all citizens in the case of a disaster and must be reviewed annually. The plans must also include risk assessments, training of personnel, and annual exercises. Each town will be required to maintain an office of emergency management, which will be responsible for communications, warnings, and damage assessments. Town citizens will be given a copies of the plan.


SCHOOL SAFETY. A bill (A.B. 2809) pending before the California Assembly would require the state superintendent of schools to provide funds to school districts to promote school safety and reduce school violence. The bill would also require that the state department of education develop policies to prevent bullying and promote conflict resolution. The department would then make these policies available to individual schools.

This column should not be construed as legal or legislative advice.