Traverse Internet Law Federal Court Report: February 2011 - Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


YARDI SYSTEMS, INC. v. REALPAGE, INC. and DC CONSULTING, INC.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:11-CV-00690
FILED: 1/24/2011

If you are going to hire employees from a competitor make sure you conduct appropriate due diligence, make sure that they understand that no trade secret information or passwords of any kind can be brought with them to their new job, and have them sign a contract promising that they are not bringing with them any trade secret, confidential or proprietary information. It is also important that you find out if they have signed a non-disclosure or confidentiality agreement with their previous employer so you can assess the risk. And remember, using passwords acquired during a previous employment to now compete against a business is most likely going to be considered “hacking”.

Yardi and the Defendants compete in the sale of property management software and related services. RealPage acquired a consulting group, today known as “DC Consulting, Inc.”, which was a consulting company providing technology and software support services almost exclusively for Plaintiff’s users. Defendants have allegedly continued to access the Plaintiff’s “client central” software using stolen credentials acquired by the consulting company when it was providing services to Plaintiff’s clients.

Plaintiff alleges violation of the Federal Computer Fraud and Abuse Act, violation of the Comprehensive Computer Data Access and Fraud Act, violation of the Digital Millennium Copyright Act, copyright infringement, trade secret misappropriation, and unfair competition. The prayer for relief includes requests for preliminary and permanent injunctive relief, actual damages, statutory damages, punitive damages, prejudgment interest, and attorneys’ fees and costs. Traverse Internet Law Cross-Reference Number 1468.