In a decision with far-reaching implications for New Jersey employers, the state Appellate Division has held that an employer can be liable to third parties for failing to properly investigate and discover an employee’s use of a company computer to access child pornography.

On Dec. 27, 2005, a three-judge panel decided Jane Doe on behalf of Jill Doe v. XYC Corporation, transforming what had been a right of employers to monitor employee activity into a duty to thoroughly investigate and take prompt remedial action to stop an employee’s improper use of a company computer. This decision is the first of its kind in the country and imposes new and significant burdens on employers.

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