David Nosal asks Federal Court to Throw Out Prison Sentence, Reconsider Unfair Use of Computer Fraud and Abuse Act in Light of Alleged Actions By Korn Ferry

Attorney Steven F. Gruel today filed a Petition for Writ of Error Coram Nobis in U.S. District Court of Northern California for Mr. Nosal. He asked the court to reject his prison sentence "to correct a fundamental breakdown of fairness in imposing a custodial sentence now, in light of alleged recent post-sentence conduct by Korn Ferry," according to the filing.

"Simply put, the Court sentenced Mr. Nosal to prison, at the government's urging, to send a message for general deterrence. Stealing of trade secrets would not be tolerated and fully prosecuted," attorney Gruel argues in the legal filing.

"In 2008, at Korn Ferry's bidding, federal lawyers charged Mr. Nosal with violating the Computer Fraud and Abuse Act (CFAA) by allegedly inducing a company employee to use their login credentials to access the company's database and provide information to a third party (not Mr. Nosal), in violation of the company's computer-use policy. Government lawyers claimed the violation of this policy was a federal crime, but the U.S. District Court disagreed and threw out some of the charges, though not all of them. The federal lawyers appealed to the 9^th U.S. Circuit Court of Appeals."

The Electronic Frontier Foundation, a Silicon Valley non-profit that advocates for the rights of Internet users, filed amicus briefs with both courts on Mr. Nosal's behalf, arguing that it was unjust to impose criminal liability on an individual for merely violating a company policy. Doing so dramatically expands the CFAA and turns millions of law abiding citizens into criminals, the EFF argued.

"Interpreting the CFAA to criminalize using an authorized user's login credentials with their knowledge and permission ignores Congress' intent to make the CFAA an anti-hacking statute," the EFF said. "More importantly, this interpretation of the CFAA makes criminals out of the millions of people who use login credentials of family members or friends with their knowledge and permission."

In a 2012 decision, the 9th Circuit Court agreed with this common-sense argument and ruled that accessing a workplace computer in violation of a corporate policy is not a CFAA violation.

A divided panel of 9^th Circuit judges rejected Mr. Nosal's arguments for overturning the convictions. However, the court did remand the case for reconsideration of some issues, including his prison sentence.

Adding to the injustice: A Korn Ferry executive was alleged to have done the exact same thing when he left his employer, Spencer Stuart, to join Korn Ferry in March 2017.  

The difference is that, instead of calling federal authorities and pressing for criminal charges to be filed against Mr. Truc -- as Korn Ferry did to Mr. Nosal -- Spencer Stuart sued Korn Ferry and Mr. Truc in civil court.

In lawsuits filed in March 2017 with the Circuit Court of Cook County, Illinois, and the U.S. District Court for the Eastern District of Illinois, Spencer Stuart accused Korn Ferry and Mr. Truc of "attempting to dismantle Spencer Stuart's global automotive practice and move that business lock, stock and barrel to Korn Ferry."

Spencer Stuart alleged that Mr. Truc and another former employee, Pierre-Edouard Paquet, acted at the direction of Korn Ferry, when they quit and took with them a substantial amount of confidential and proprietary information.

Korn Ferry and Spencer Stuart settled both cases subject to a non-disclosure agreement, with no criminal charges filed against Messrs. Truc or Paquet, or Korn Ferry.

But Mr. Nosal is still facing a one-year prison sentence for doing nothing more than violating a company's internal policy.

"In one case, allegedly bringing information from an old job to a new one is rewarded with success and luxury, while in another case, Mr. Nosal's, the action is condemned to prison," attorney Gruel argues in his filing on Nosal's behalf.

Mr. Nosal is an individual, a "self-made man" who worked his way up from nothing to be among the most highly regarded in his field. Korn Ferry, by contrast, is a highly successful multinational corporation.

Mr. Nosal is asking the court to order an evidentiary hearing to examine Korn Ferry's actions with Mr. Truc, and determine how they affect the setting of a sentence for Mr. Nosal. Finally, Mr. Nosal believes that, after taking all of the evidence into consideration and applying it to the present case, this Court will also recognize the tremendous injustice of sentencing him to prison, while Korn Ferry continues to prosper.

On April 24, 2013, a jury convicted Mr. Nosal on six counts based on three occasions of unauthorized access to source lists maintained in databases run by Korn Ferry. Three of the charges arose out of alleged violations of the CFAA, two were alleged trade secret violations, and the last count was a conspiracy charge

See United States v. Nosal, 844 F.3d 1024, 1030-1031 (9th Cir. 2016)

Mr. Nosal has not yet served the sentence due to the court's agreement that he should remain out on bail during his appeal.

Additional Case Background

Mr. Nosal's original separation agreement with Korn/Ferry included a clause imposed by his former employer that prohibited him from disclosing publicly the reasons why he resigned from the company in 2004. In the 13 years since, the company has pursued Mr. Nosal maliciously in an effort to discredit preemptively its former top biller should he break his silence.

The case was originally brought by Korn Ferry to cast a black cloud over his opening of Nosal's new company.  Korn/Ferry initially accused Mr. Nosal of orchestrating the downloading of 32,000 records after he first left KFI.  These allegations were proven to be false after the four individuals who took the data admitted under oath that they acted independently and without Mr. Nosal's knowledge or consent.

Korn/Ferry also convinced the Government to come after Mr. Nosal for accepting work clients awarded him after he left Korn/Ferry. The courts quickly dismissed these 15 counts from the original indictment as they were not supported by the law.

Contact: Sam Singer
415.227.9700
Email: [email protected]

SOURCE Singer Associates, Inc.