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Jane Doe v. XYC Corporation

Employer Has A Duty To Take Prompt And Effective Action To Prevent Employee From Continuing To View Child Pornography

Reversing the court below, a New Jersey intermediate appellate court holds that an employer has a duty to take "prompt and effective action" to prevent an employee that it had notice was viewing child pornography in the workplace from continuing such criminal activity.  This obligation to act requires the employer to investigate the employee's activities.  It also requires the employer to report the employee's activities to the appropriate governmental authorities and to take effective action to prevent it, which may require the employee's termination.  As a result of this determination, the Court allowed the ex-wife of a former company employee, individually and as guardian for her minor daughter, to proceed with a lawsuit against the employer arising out of the employee's transmission via e-mail from his office computer of three pornographic images of his minor stepdaughter to a child porn site.

Company Employees Have Notice Employee Is Viewing Pornography

The employee in question ("Employee") was employed by the defendant ("Company") as an accountant.  Employee's office space consisted of an open cubicle equipped with a computer.  Between 1999 and 2001, various Company employees became aware that the Employee was using his office computer to view pornography.  Such knowledge was gained by reviewing computer logs that revealed that the Employee had viewed pornographic web sites.  Similar information was also gained by examining evidence of the employee's web usage found on his office computer.  One of the sites Employee visited specifically spoke about children, and was titled "Teenflirts.org: The Original Non-Nude Teen Index."  Other employees reported seeing Employee suddenly minimize his computer screen, so as to hide from their view what had been on his screen. 

Employee's activities were reported to more senior level employees of the Company.  Company policy prohibited the use of Company computers for non-business purposes, and warned that employees who did so "would be subject to discipline, up to and including discharge."  It also required employees to report violations of the Company's usage policy. 

On two occasions, Company employees asked Employee to stop these activities.  The second request was given in March 2001.  At that time, Employee agreed to stop his activities.  Unfortunately, however, Employee subsequently resumed his use of his office computer to view pornographic web sites.  The Company official who had disciplined Employee in March 2001 did not immediately discipline Employee upon learning of his resumption of prohibited activities.

Employee Emails Pornographic Images From Work

In June 2001, Employee was arrested on charges of child pornography.  A resulting search by the police of Employee's computer and work space revealed both numerous downloaded and printed images depicting child pornography.

During the five months preceding his arrest, Employee had videotaped and photographed his ten year old stepdaughter both in nude and semi-nude positions.  In June 2001, shortly before his arrest, Employee transmitted from his office computer three of the resulting pornographic images to a child porn site in order to obtain access to it.

Trial Court Dismisses Ex-Wife's Claim

Plaintiff, Employee's ex-wife, commenced this suit against the Company, on behalf of herself individually, and as guardian for her minor daughter.  In her complaint, plaintiff asserted that the Company's knowledge of Employee's use of his office computer to view child pornography triggered an obligation to report such misconduct to the authorities.  The Company's negligent failure to report such misconduct caused, and rendered it liable for, the resulting injuries sustained by Employee's stepdaughter.

The Trial Court granted the Company's motion for summary judgment, and dismissed the complaint.  Finding that the Company did not know Employee had been viewing child pornography, the Trial Court held the Company had acted prudently by instructing Employee to stop his activities, and had no duty to monitor Employee's private communications.  The Trial Court further held that Employee's conduct in his own home, where he photographed his stepdaughter, was beyond the Company's control.

Employer Has A Duty

The Appellate Division reversed.  The Court did not address that portion of the Trial Court's decision that held that the Company was not liable for those acts undertaken by Employee in his home.  However, relying largely on §317 of the Restatement (Second) of Torts, the Appellate Division 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 to take prompt and effective action to stop the unauthorized activity, lest it result in harm to innocent third-parties.  No privacy interest of the employee stands in the way of this duty on the part of the employer.

§ 317 of the Restatement (Second) of Torts provides:

A master is under a duty to exercise reasonable care so to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them if,

(a) the servant

(i) is upon the premises in possession of the master or  upon which the servant is privileged to enter only as his servant, or
(ii) is using a chattel of the master, and

(b) the master

(i) knows or has reason to know that he has the ability to control his servant, and
(ii) knows or should know of the necessity and opportunity for exercising such control.

The Court held that the Company's knowledge of Employee's use of his office computer to view pornographic materials imposed upon it an affirmative "duty to investigate further."  Such an investigation "would have readily uncovered the full scope of Employee's activities" including the use of his office computer to view child pornography.  This is a crime under both Federal and State statutes.  This knowledge, in turn, held the Court, triggered "a duty to report Employee's activities to the proper authorities and to take effective internal action to stop those activities, whether by termination or some less drastic remedy."  The Court held that the imposition of such a duty was consistent both with §317, and prior New Jersey authorities interpreting it in other contexts.  Said the Court:

Restatement … § 317… places upon a master, in this case defendant, the duty to control his servant, here Employee, while the servant is acting outside the scope of his employment, as in the present, case, to prevent the servant from "intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them."  That type of duty finds support in our case law, DiCosala v. Kay, 91 N.J. 159, 172, 450 A.2d 508 (1982), and we discern no sound reason not to apply it here.

Proximate Cause

The Court declined on the record before it to determine whether the Company's failure to perform this duty proximately caused injury to plaintiff.

To establish such causation, the plaintiff must show both that the Company's failure to act proximately caused Employee's transmission of the three images of her stepdaughter from his office computer, and further, that such transmission caused injury to his stepdaughter.  While the Court determined there was sufficient evidence in the record to present the first question to the trier of fact for determination, it held the record had not yet been adequately developed on the second inquiry.  The Appellate Division accordingly remanded the case to the Trial Court for further consideration.

In reaching this result, the Court rejected the Company's argument that the Employee's right of privacy barred it from investigating his private e-mail communications.  The Court found support for this decision in the Company's e-mail policy, which permitted it to access all e-mails sent over the Company system "as deemed necessary by and in the sole discretion of the [Company]."  It also relied on the open nature of Employee's work space.  Said the Court:

Under those circumstances, we readily conclude that Employee had no legitimate expectation of privacy that would prevent his employer from accessing his computer to determine if he was using it to view adult or child pornography.