How Illinois Law Treats Cloud-Based Data Theft

 Posted on October 17, 2025 in Corporate Law

The pandemic forced many people to work from home; however, after the pandemic ended, many companies realized that their workers could get the same amount of work done, either entirely remotely or as hybrid workers – part-time at home and part-time in the office. With the advances in technology, along with the changes in "traditional" workplaces, an employee could conceivably walk out with a company’s most valuable information on a Google Drive or Dropbox folder.  

This information might include pricing data, proprietary software, client lists, or other crucial data. Under Illinois law, this is more than just a breach of policy; it can be classified as trade-secret theft under the Illinois Trade Secrets Act (765 ILCS 1065) and even criminal theft (720 ILCS 5/16-1).

The courts treat cloud-based misappropriation as serious misconduct, warranting injunctions, forensic recovery orders, and even potential felony prosecution. A single act, such as uploading client data to a personal account, can trigger both civil and criminal liability. An experienced Oak Brook, IL business law attorney can help businesses protect their trade secrets, even as technology complicates this goal.  

What Are Some Scenarios Regarding Cloud-Based Employee Theft?

There are practically endless situations where an employee could steal trade secrets from an employer, including:

• An employee uploads an entire client database to Google Drive prior to resignation.
• CRM contacts are synced to personal devices or email accounts by an employee.
• An employee uses remote desktop software to access servers after being terminated.
• Source code, marketing plans, or pricing models are copied to private repositories by an employee.
• A sales employee copies proprietary pricing models to a personal Dropbox to use at a new job.
• A software engineer copies source code or AI development files from a company’s network to his or her personal cloud storage prior to leaving the company.
• After being terminated, an IT administrator with privileged access deletes crucial data from cloud servers or installs malware to disrupt the company.
• Phishing and social engineering are used by a disgruntled employee to gain access to a co-worker’s cloud-based human resources portal to divert payroll direct deposits.

The motivation for such acts is generally revenge, a perceived sense of ownership over the work, or personal gain. It is important to recognize that sometimes information theft is not deliberate; rather, it is accidental or the result of negligence. Unintentional errors by employees are a common and costly source of cloud-based data loss. Unintentional errors could include a manager who uses a non-company-approved personal cloud service to share sensitive client files with a vendor, accidentally exposing the data.  

Employer Responses to Cloud-Based Theft

An employer who suspects cloud-based theft from an employee should immediately engage a digital forensics expert to preserve metadata and image all devices. Access logs can be used to confirm unauthorized downloads or uploads. If it appears the theft is deliberate, a temporary restraining order can be filed, or a preliminary injunction to stop use and force the return of data. Damages may be sought for lost business and attorney fees. If the theft is severe, a criminal referral will likely be the next step. Civil and criminal actions will need to be coordinated to preserve evidence.

How Can Employers Avoid Cloud-Based Employee Theft?

Companies should draft clear remote-access and data-ownership policies that cover personal cloud storage. NDAs and exit interviews should always be required, along with acknowledgment forms, once devices are returned. Endpoint security that monitors file uploads to unapproved domains should be implemented, and employee handbooks should be regularly updated to reflect the trade-secret law and privacy changes in the state.

Contact a Naperville, IL Business Lawyer

If your business discovers that an employee has uploaded client data or proprietary files to a personal cloud account, act immediately. Any delay can lead to destroyed digital evidence, weakening your claim. An experienced Oak Brook, IL business law attorney from Lindell & Tessitore, P.C. can coordinate forensic recovery, pursuing both civil and criminal remedies. Attorney Lindell has an advanced real estate degree in addition to his law degree. Attorney Tessitore has represented both borrowers and lenders. Call 630-778-3818 to schedule an initial consultation with an attorney.