Employer liability for employee online criminal acts.

• Author: Nowak, Jeffrey S.

1. INTRODUCTION

   Typing away at his computer while at work, Jacob Jacks forged a new and unhealthy relationship with an unassuming woman through an online "sex chat room." A computer technical advisor for Prodigy Services Company, Jacks repeatedly entered the chat room during work time for one reason: to befriend Barbara Haybeck and to persuade her to engage in sexual intercourse.(1) Jacks, a known sexual predator who had AIDS, used the Internet access provided by his employer to spend extensive time online with Haybeck.(2) Ultimately, Jacks succeeded in luring her into a sexual relationship. Before and during the relationship, Jacks denied having AIDS.(3) Haybeck contracted the deadly virus as a result of the sexual relationship and attempted to hold Prodigy liable for Jacks's Internet activity on the job.(4)

   In workplaces driven by the latest and most advanced technology, this scenario does not seem too unrealistic. Misuse of the company computer and Internet services provide other reprehensible fact patterns as well. Jacks's activity might not have been limited to e-mailing a woman to engage in consensual sex acts. Employer liability could also become an issue, for example, if he were selling child pornography over the Internet at work, entering other chat rooms to lure underage girls into his sex web, or even harassing a third party by use of the company's online service. While the computer and the Internet as effective communication devices have changed the face of business, they present new and unanswered problems for employers.

   What are the legal consequences for Prodigy and other employers when an employee uses a computer and his or her company's Internet service to engage in criminal activity or activity that furthers a criminal act?(5) Can the victim hold the employer liable under a respondeat superior or negligence doctrine? There is little question that these employees should be civilly, as well as criminally, liable for their abhorrent acts. However, the issue of employer liability becomes more recondite when these predators are not the parties involved in a suit resulting from their illegal conduct. Because the emergence of the information superhighway offers employees a new outlet to conceal improper activity from their employers, employer liability is only further complicated.

   Only twenty-five years ago, a mere 50,000 computers existed worldwide.(6) In 1997, that number was estimated at 140 million.(7) Today, 120 million people are linked via the Internet,(8) the vast majority of whom have gone online since 1990.(9) That number is three times as many as were online even two years ago.(10) Experts estimate that, in 1997 alone, these users sent nearly 2.7 trillion e-mail messages through their computers.(11) According to experts, "traffic on the Internet is doubling every 100 days."(12)

   For obvious reasons, this explosion of communication has greatly impacted the workplace. "Today, 90 percent of all companies with more than 1,000 employees use E-mail."(13) In 1996, a mere "34% of the Fortune 500 companies had World Wide Web sites"; in 1997, 80 percent of these companies had Web sites.(14) Meetings that formerly involved a pen, paper, and a handshake now involve a fax machine, a teleconference, or a simple e-mail message. The advantages of the computer workplace are obvious. Not only does technological advancement aid the average business, it also impacts the consumer who now receives services more efficiently and rapidly.

   As new means of communication, however, the computer and Internet activity in the workplace yield disadvantages as well. Employees may spend a significant part of their workday surfing the Internet, which is merely a double-click away. But what awaits employees on the Internet are "hits"(15) unrelated to their employment roles and to the missions of their companies. Therefore, workplace Internet use creates a unique opportunity for employees to engage in activity contrary to the interests of the employer, including criminal activity or harassment. Wrongdoers like Jacob Jacks will continue to realize that the employer's Internet service can be used as a personal tool that can levy tremendous destruction upon the lives of private third parties. In response to perpetrators like Jacks, government and judicial systems have been slow to enact specific laws to confront this type of technological terror. Legislatures and courts now struggle to pass laws and resolve conflicts to keep up with this ever-changing technology.(16) In the meantime, employers must take precautions to protect themselves from unnecessary liability until legislatures can adequately address these questions of law.

   This Note examines the application of the doctrines of respondeat superior and negligent retention as applied to the Internet in the workplace. It intends to aid employers that want to take proactive steps to minimize their liability for the actions of their employees on the Internet.(17) Part II analyzes the doctrine of respondeat superior, which imputes liability to an employer for the actions of an employee that occur within the scope of employment. Part III focuses on negligent retention, the doctrine most likely to entrap employers as they continue to add more computers (and thus, more Internet users) to the workplace.(18) Part IV offers employers suggestions to limit their liability as a type of online provider and recommends an Internet policy to enforce proper employee use of the Internet while on the job.

2. THE DOCTRINE OF RESPONDEAT SUPERIOR

   1. Traditional Definition of Respondeat Superior

      The traditional basis for an employer's liability for its employees' acts is the doctrine of respondeat superior, under which the employer is liable for employee acts that are within the scope of employment or in furtherance of the employer's interest.(19) "Under respondeat superior, the employer `stands in the shoes' of its employees,"(20) as long as the act in question is within the scope of employment. Courts determine whether an employee's tortious conduct falls within the scope of employment by considering such factors as the time and place of the act, the nature of the employee's duties, and the purpose for which the employee acted.(21) The Restatement (Second) of Agency, section 228, establishes the test adopted by most jurisdictions to determine what conduct falls within the scope of employment:

      (1) Conduct of a servant is within the scope of employment if, but only if: (a) it is of the kind he is employed to perform; (b) it occurs substantially within the authorized time and space limits; (c) it is actuated, at least in part, by a purpose to serve the master, and (d) if force is intentionally used by the servant against another, the use of force is not unexpectable by the master. (2) Conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master.(22) Courts have held that acts that are so personally driven or outrageous are clearly outside the scope of employment.(23) For example, in Heindel v. Bowery Savings Bank, Robert Turner, a security guard at a New York shopping mall, forced a fifteen-year-old girl to accompany him to the mall's security office where he assaulted, raped, and sodomized her.(24) The victim's father filed suit against Turner's employer, arguing that the security company was "vicariously liable" for his acts.(25) While the court acknowledged that an employer can be held liable for torts committed by the employee during the course of employment, the employer cannot be held liable when the personal motives of the employee are unrelated to the employer's business.(26) Finding that Turner's acts were committed for personal motives and were a complete departure from the normal duties of a security guard, the court held, as a matter of law, that his conduct did not further the employer's interest.(27) The court granted summary judgment for the employer. While not explicitly mentioning the Restatement, the Heindel court could have easily been guided by common sense exceptions to the scope of employment rule contained in the Restatement. For example, section 235 of the Restatement specifically protects employers when employees commit intentional torts for purely personal reasons unrelated to the business.(28)

      In addition, if the employee's actions are outrageous, courts have traditionally held that the actions serve no rational business purpose and are therefore outside the scope of employment.(29) In Bates v. United States, the Eighth Circuit found that the government as "employer" could not be held liable for the actions of a military policeman when the policeman's conduct was "`outrageous and criminal.'"(30) In Bates, a military policeman stopped a car of four teenagers for an alleged robbery near a Missouri military base. The policeman handcuffed the passengers and fatally shot the two boys in the car.(31) Afterward, he assaulted and raped the two girls, ultimately shooting them as well.(32) The court found that an employee whose "actions ... were so outrageous and criminal--so excessively violent as to be totally without reason or responsibility" could not be found to be acting within the scope of his employment.(33)

   2. Employee Misconduct on the Internet

      These exceptions, which negate the scope of employment when employee actions are so outrageous or personal in nature, should have specific application to Internet use in the workplace. The Restatement requires that the employee's acts "serve the master."(34) Therefore, to perform within the scope of employment, the employee must be motivated to serve the master, even in part, by his acts. Wrongful activity on the Internet in the workplace cannot fall within the scope of the employment relationship because sexual advances or other outrageous conduct over a company's online...