Legal Question in Technology Law in Michigan

Re: Company Liability for Employee Hackers

It depends whether the employee was acting within what the law calls the course and scope of his employment. This does not necessarily mean that the company is off the hook if it didin't require the employee to start hacking. For example, a restaurant would be liable if one of its waiters punched a customer while taking his order; the punch is not within the course and scope of his duties, but taking customer orders is and that is what he was doing when he became violent.

If the employee was acting within the course and scope of his duties while he was hacking, then his employer will be liable for any damages the competitor suffered. Depending upon exactly what the employee did, the company may be liable for additional penalties, possibly including punitive damages. It might also be enjoined from using any information the heacker obtained. The company would probably escape criminal liability unless it the employee was acting under instructions from management.