New Jersey Employers Beware – Court Decision Finds Employer Liable for Employee Misconduct

In light of a recent New Jersey Superior Court Appellate Division decision, it is possible for an employer to be held liable to third parties harmed by its employee if the employer has reason to know that the employee is engaging in Internet conduct that is potentially harmful, yet fails to take remedial action.  In Doe v. XYC Corp., an employee’s spouse sued  her husband’s employer on behalf of her minor daughter after her husband was arrested taking pornographic pictures of the daughter.  The employer had in the past received reports that the employee was accessing pornography, including on one occasion, child pornography, during the work-day using the employer’s computers.   The employer performed only a cursory investigation and admonished the employee, but took no further action even when it later determined that the employee’s conduct continued.  In light of these circumstances, the Appellate Division reversed a trial court ruling and permitted the case to continue.

In light of the Doe decision, employers in New Jersey must be vigilant in implementing precautionary guidelines and procedures to minimize the risk that their companies will be exposed to liability for the inappropriate online activities of their employees.  Preferably, those guidelines and procedures will also outline a plan of action should the preventative measures fail.

Often times, co-workers are the most perceptive to one another’s computer usage habits.  An anonymous complaint policy allows employees to report any serious, improper Internet conduct without the worry of facing repercussions from their fellow co-worker or the company.  Once a complaint policy is in place, the company should establish an investigatory process to respond to suspected abuse of the company’s technology systems in a timely and even handed manner.  This process should include interim measures to be taken during the investigation, such as prohibiting the alleged perpetrator from using the Internet.  The company should also establish a process for communicating information to law enforcement officers, as appropriate, and seek legal counsel to determine the company’s obligations to potential third parties who may have been harmed by the employees illegal conduct.

Properly handling allegations of pornography is particular important in instances where children are possibly the subjects of the pornography.  If an employer uncovers pornography on an employee’s computer but is unable to determine if the images are of children or adults, a report can be filed with the Cyber Tip Line, a Congressionally mandated mechanism for  reporting cases of sexual exploitation of children.  The information will be forwarded to law enforcement personal for investigation where it will be reviewed to determine if the images match other known images of child pornography.  This will give the company a permanent record of its efforts to contact law enforcement personnel with its concerns without rushing to conclusions about the employee.

The Internet has become an integral part of the workplace, but employers must remain attentive to their employees’ Internet activity.  If inappropriate company computer use is every suspected, it should be promptly investigated and appropriate remedial action, including filing reports with law enforcement authorities, should be taken when necessary.

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