Just over four years ago, in January 2014, a court sentenced former Korn/Ferry regional director David Nosal to one year and one day in prison for violations of the federal Computer Fraud and Abuse Act and the Espionage Act. Nosal appealed the sentence, but his appeals ultimately failed: the U.S. Court of Appeals for the Ninth Circuit upheld Nosal’s sentence, and the U.S. Supreme Court denied review of the case. Luckily for Nosal, his 2014 motion for release pending appeal was granted, so he has not served any time during the four years of appeals.
On January 17, 2018, Nosal made one last effort to avoid his 366-day sentence with an unusual argument about fairness. According to Nosal’s lawyer Steven Guel, Korn/Ferry—Nosal’s former employer, which assisted in Nosal’s prosecution—was guilty of some trade secrets theft of its own. In a last-ditch effort to reduce or set aside Nosal’s sentence, Gruel pointed to another Korn/Ferry executive who has been accused of taking proprietary and confidential information from a former employer to Korn/Ferry. Unlike Nosal’s case, Guel argued, Korn/Ferry did not initiate prosecution against that executive, and instead entered into a confidential settlement.
Gruel argued that Korn/Ferry’s recent actions undermine the very reasoning behind Nosal’s sentence: to send a “message for general deterrence” to Silicon Valley executives, by showing that “[s]tealing of trade secrets would not be tolerated and fully prosecuted.” Indeed, the prosecution focused on deterrence at Nosal’s sentencing hearing. Assistant U.S. Attorney Matthew Parrella promised U.S. District Judge Edward Chen that a harsh sentence for Nosal would “go through Silicon Valley like a bell.” According to Gruel, the fact that the bell did not ring for Korn/Ferry—the very victim of Nosal’s theft—undermines any deterrence-related argument in favor of Nosal’s sentence. He urged Judge Chen to reconsider his client’s 366-day sentence.
Ironically, these same facts would also appear to support an argument that Nosal’s sentence was not long enough. After all, it might be said that the “bell” did not ring loud enough. Federal prosecutors originally sought a sentence of twenty-seven months for Nosal—almost double what the court ultimately ordered him to serve.
A hearing is set for February 7, 2018 in front of Judge Chen. You can read the full plea here. In any case, the Nosal saga continues.