Employer Liable for Employee’s Illegal Use of Internet January 2006 By: Robert G. Brody (Founding Partner) and Richard S. Moskowitz
(Associate) at the Labor and Employment Firm of Brody and Associates, LLC

A New Jersey corporation was liable for harm to third persons as a result of an employee’s activities on a company owned computer. The New Jersey appeals court ruled the company had a duty to report the employee’s internet activities involving child pornography to the police and to take internal action to stop them. Having failed to do so, the employer was liable for harm caused to the employee’s step- daughter and ex-wife.

Since 1999, the company knew the employee was visiting pornographic web sites using his company provided computer. He was instructed on numerous occasions to cease visiting pornographic web sites. In June 2001, the employee was arrested for possession of child pornography.

Apparently, the employee had downloaded 1,000+ pornographic images while at work. He also had taken semi-nude photographs of his 10 year old step daughter and sent them to a child pornography website.

The child’s mother filed the lawsuit against the employer, alleging it knew or should have known the employee was using the company’s computers to view and download child pornography and it should have taken appropriate steps to stop it. The trial court granted summary judgment to the employer, holding that the verbal warnings to stop were reasonable and the employer was not responsible for, nor could it have prevented the harm caused to the child.

However, the New Jersey Appellate Division reversed, stating the employer had the ability and the right to monitor the employee’s internet usage and should have informed the proper authorities regarding the websites he was visiting. The Court held the harm caused was facilitated through the use of the company’s computer, the company failed to investigate when it had knowledge of the illegal computer use, and the company failed to take action.

However, the Court failed to conclude that the failure to act had been the proximate cause of the injuries to the child and sent the case back to the trial court for that determination.

This is the first time a court has held an employer has a duty to report such unlawful activities of its employees to the police.

Employers must decide the bounds of conduct which it must report to the proper authorities. All employers with policies in place which authorize the monitoring of employee computer use, must investigate fully all allegations of improper usage made by other employees. Not having any such monitoring policies may be even more risky. Seek counsel from an attorney regarding your duty to report such usage.

Source: Brody and Associates