A word of caution is in order, though, because New York’s courts have construed this exception  very narrowly - the adverse interest exception applies only when the agent has “totally abandoned” the principal’s interests and is acting entirely for his own or another’s purposes (see, e.g., Center v Hampton Affiliates, 66 NY2d at 785).

And, since this is an affirmative defense, you can probably guess who has the burden of proving that the employee acted for entirely selfish reasons: that’s right – the employer.

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Interestingly, for purposes of imposing liability under the CFAA, the Court noted that simply hitting the delete button will not suffice; citing a Seventh Circuit case, Int’l Airport Ctrs., L.L.C. v. Citrin, 440 F.3d. 418 (7th Cir. 2006),  “merely pressing the delete key on a computer does not remove data but rather ‘removes the index entry and pointers to the data file so that the file appears no longer to be there.” Id. “Such deleted files,” wrote the Court, “are easily recoverable.” Id.

The Court continued, “Even though pressing the delete key technically ‘transmits a command’ to the computer,” it would render the statute (which, as stated above also carries criminal implications) too broad.  On the other hand, where, as in this case, the defendant allegedly used a secure-erasure program, such actions would fall within the ambit of the CFAA.

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The initial action, which sought monetary damages for these former employees’ alleged breach of fiduciary duty,   embezzlement and fraud was filed by Marciano roughly two years ago. Over the course of the last two years, however, Marciano disregarded numerous court orders directing that he provide certain discovery, such as appearing for his Court-ordered deposition, which ultimately led the presiding judge to “strike his complaint,” which is legalese for dismissing his case. Since he also refused to comply with the Court’s orders directing him to respond to the employees’ discovery demands on their respective counterclaims, the Court also struck his answer to their allegations, which essentially took away his attorneys’  ability to defend against the employees’ claims.

Lest you think that such conduct is regular, standard fare, Marciano apparently went through seventeen (17!!!) attorneys on this case over the past two years. This is simply unheard of.

At the damages portion of the trial (based on Marciano’s misconduct, the judge had already precluded him from contesting liabilty), Marciano made a surprise appearance, and was completely unapologetic: he conceded that he was on a crusade against these former employees.  Given the size of the verdict against him, it certainly seems that his testimony made quite an impression on the jury.

The moral of the story is clear: if you disregard with impunity a court’s orders and carry this arrogance before a jury, you do so at your own peril.

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I’m sticking to my guns. As I’ve previously opined in “(Another) Report Predicts That Employees’ Breach of Duty and Theft To Rise in Down Economy” and “Study Claims That Employee Theft Rises As Economy Worsens,” it’s not the economy that causes people to steal – it’s a lack of ethics.

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First, and as a threshold matter, the article does not even attempt to prove – scientifically or otherwise – a link between the economy and a breach of fiduciary duty.

Ironically, the prime example cited by this article - a crackdown on wealthy companies who engaged in unfair competition by paying out hundreds of millions of dollars in fines for illicitly attempting to secure lucrative oil contracts through bribes – does not support its theory that theft and dishonesty are being perpetrated by the desperate.

In short, as noted in my earlier blog post “Study Claims That Employee Theft Rises as Economy Worsens,”  it seems that people are looking for a convenient scapegoat for unethical behavior when they should be looking in the mirror.

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As a New York business litigation attorney, I have to recommend that my clients purchase such policies (although by the time they’ve called me about their particular problems with regard to employee theft and/or breach of fiduciary duty, it’s usually too late for that).  That said, I find the article’s underlying assumption that employee theft should somehow be taken as a given is fundamentally flawed both from a moral and business perspective.

Leaving aside how troubling this assumption is on a moral plane (have we, as a society really reached the point where it should surprise us when people have integrity rather than rob us blind the second they are given the chance?),  in my view, these problems, from a business vantage point, can be signficantly reduced, if not eliminated in the following way: once the decision has been made to hire, the employer must commit to diligently and carefully vet candidates who will fit naturally into a professional atmosphere that rewards and incentivises team play and solution-geared problem solving while brooking no tolerance whatsoever for dishonesty or people who “are just looking out for #1″ (i.e., themselves).

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