Employer Liability for Employee Internet Use

Employee using the internet

View our similar post: Social Media and Internet Use Policy – Does My Business Need One?

This post is part of a series of posts entitled A Legal Guide to the Internet. For a comprehensive list of articles contained in this series, click here.

The ease at which e-mail is transmitted encourages informality and often reduces inhibitions. E-mail allows for the rapid dissemination of ideas, plans, and documents. Employees are frequently allowed unlimited access to e-mail and the Internet. This exposes the employer to many risks.

Employers can be subject to liability to third parties from actions of their employees. Such liability can arise from action of the employees done within the scope of their employment. An employer can be liable for sexual or racial harassment perpetrated or furthered by e-mail. Also, careless and defamatory e-mail may expose individuals and the company to litigation. Other problems for employers could arise where employees breach copyright laws by downloading information contained on other web sites. There are also risks that employees may disclose confidential company secrets to competitors or third parties.

The extent to which an employer is liable for employee conduct varies. Under the general concept of respondeat superior, an employer is liable for the damaged party’s injuries if the employee’s injurious actions occurred within the scope of the employee’s employment. The scope-of-employment analysis does not lend itself to any simple definition, but courts traditionally apply the following factors:

  • the time, place, and occasion of the act
  • the relationship between employer and employee
  • if the act is commonly done by employees
  • if the act departed from normal scope of work
  • if the act was reasonably anticipated by the employer

An employer cannot assume that it will escape liability merely because it does not know such action is occurring. Acompany will be liable if management-level employees knew, or in the exercise of reasonable care should have known about offensive conduct. See Faragher v. City of Boca Raton, 524 U.S. 775, (1998). Prompt action to remedy a hostile atmosphere may relieve the employer of liability, but there is no guarantee.

This and the following posts have been copied or adopted from A Legal Guide To The INTERNET – Sixth Edition, published through a collaborative effort by the Minnesota Department of Employment & Economic Development and Merchant & Gould.