InsideCounsel » April 2006
N.J. Company Held Liable for Employee's Porn Activity
When an unnamed employee was sitting at his desk at XYC Corp., he was supposed to be doing accounting work. Instead, he was accessing pornographic Web sites depicting bestiality, necrophilia and images of children. Although several of his co-workers and supervisors at the New Jersey company noticed something strange about the way he suddenly minimized screens when others walked by his cubical and discovered some suspect Web addresses in his list of visited sites, no…
When an unnamed employee was sitting at his desk at XYC Corp., he was supposed to be doing accounting work. Instead, he was accessing pornographic Web sites depicting bestiality, necrophilia and images of children. Although several of his co-workers and supervisors at the New Jersey company noticed something strange about the way he suddenly minimized screens when others walked by his cubical and discovered some suspect Web addresses in his list of visited sites, no one investigated to see if he was violating the law by viewing child pornography. Then, more than two years after co-workers first noticed his suspicious behavior, the employee sent nude photos of his 10-year-old stepdaughter to a child porn site using XYC's computer.After the employee was arrested on child pornography charges, the girl's mother sued XYC for failing to uncover and report his illegal acts. Her victory in Jane Doe v. XYC Corp. puts New Jersey employers on notice that they need to take action if they have any reason to believe an employee is using company computers for child pornography activities.
While some contend the decision opens up a Pandora's Box of employer liability for other criminal acts by employees using a company's computer system, others say the decision was written narrowly and applies only to child pornography.
In any event, the case is causing a stir among in-house attorneys because it breaks new ground in assessing employer responsibility for actions by an employee that harm a third party. It also raises questions about the extent of an employer's duty to monitor employees' Internet usage for possible criminal activity.
Broadening Responsibility
In Jane Doe v. XYC Corp., the Appellate Division of the New Jersey Superior Court reversed summary judgment for XYC, holding that a company that knows its employee is accessing pornography at work has a duty to investigate that activity and stop any potential harm to third parties.
"We hold 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 prompt and effective action to stop the unauthorized activity, lest it result in harm to innocent third parties," Judge Harvey Weissbard wrote. "No privacy interest of the employee stands in the way of this duty on the part of the employer."
The Appeals Court rejected most of XYC's arguments and sent the case back to the Law Division to determine damages. The parties then settled the case for undisclosed terms, according to the mother's attorney, Kevin Kovacs of Purcell, Ries, Shannon, Mulcahy & O'Neill. Richard Catenacci of Connell Foley, attorney for XYC, did not return phone calls seeking comment.
The appellate decision details a two-year period during which XYC Corp. knew, based on reviews of computer logs and complaints from co-workers, that the employee was using his company computer to access pornography sites. While most of the Web site titles appeared to reflect adult porn content, the name of one of the viewed sites, called "Teenflirts.org: The Original Non-nude Teen Index," suggested the possibility of child pornography. The employee was reprimanded twice, but no one investigated the content of the sites to see if he was violating state and federal child pornography laws.
"What really struck me about the case is that the employer did have notice that the employee was looking at adult porn, but did not really have notice he was looking at child porn," says Philip Gordon, shareholder in Littler Mendelson's Denver office, pointing out the "Teenflirts" site referred to non-nude photos. "An aggressive plaintiff could use this case to say that if an employer does not act on lawful conduct, he could be held liable if it turns out the conduct is actually unlawful."
