A New Jersey Court of Appeals has held that an employer who is on notice that one of its employees is using a workplace computer to access pornography, possibly child pornography, has a duty to investigate the employee's activities and take sufficient action to stop the unauthorized activity. If the employer does not take such action, it may be liable to third parties who are damaged as a result of the employee's conduct.1

Case Background

XYC Corporation employed approximately 250 employees at its headquarters where the employee in question was an accountant. The employee's work space consisted of a small cubicle which also contained the cubicle of another accountant. The cubicle had no doors and opened into a hallway. The Company possessed software that would have permitted it to monitor employees' activities on the internet. The Company also had a policy that was distributed to all employees indicating that it had the right to monitor employee website activity and e-mails, and that inappropriate use would subject employees to discipline.

At one point in time the Company's internet services manager informed the senior network administrator that he had noted, on reviewing computer log reports, that the employee had been visiting pornographic sites. The employee's immediate supervisor has also told the Senior Network Administrator that the employee was visiting inappropriate websites. Others in the employee's department also reported to management that the employee was acting strangely by shielding his computer screen and quickly minimizing the screen so that others could not see what he was doing.

Supervisory personnel at the Company were aware that the employee had married a woman with a young child. About five months prior to the employee's arrest, he had been secretly videotaping and photographing his ten year old stepdaughter at their home in nude and semi-nude positions. Several of the clandestinely-taken photos were transmitted over the internet from his workplace.

Court Ruling

The employee's wife brought a civil action against XYC Corporation to recover damages allegedly suffered by her and her minor daughter. The Trial Court granted summary judgment in favor the employer, but the New Jersey Appellate Court reversed. The Court found that the Company, through management, was on notice that the employee was viewing pornography on his computer and, indeed, that this included child pornography. The Court also found that the Company's policy requiring that violations be reported to personnel was intended to trigger an investigation so that it could be determined if the offending employee needed to be disciplined. Finding that the Company was on notice of the employee's activities and was under a duty to investigate further, it concluded that the investigation would have readily uncovered the full scope of the employee's activities. Finally, the Appellate Court concluded that the employer had an obligation to act by either terminating the employee or reporting his activities to law enforcement authorities, or both.

Potential Effect on Companies

Most companies now have e-mail and internet policy that advise all employees that their e-mail and internet activities are subject to monitoring. Accordingly, if an employee is using the company's computer system to access inappropriate or illegal websites, it may be argued by a third party that the employer is liable for any damages that flow from the employee's permissive use of the internet for illegal purposes. Accordingly, if your company has such a policy, immediate action should be taken if it is determined that an employee is violating any of your policies with regards to internet usage.