It’s no secret: Employees often use their workplace computers for non-work purposes. But when an employee does something illegal, is the company liable because it owns the equipment?

It depends on the company’s knowledge of the illegal acts.

In one court case, a New Jersey man was arrested on child pornography charges after sending pictures of his step-daughter to several Web sites.

The man used his office computer to upload the photos. His wife sued his employer for negligence, claiming the company should’ve known what was going on and notified law enforcement. If it had, the crime could’ve stopped earlier.

According to the court, the company would be liable if it knew about the illegal conduct and didn’t stop it. So the key question was: What did the company know?

For roughly two years, the man’s supervisor and members of the IT department had been checking his Web browsing history and saw the porn sites listed. Yet nothing was reported, the employee wasn’t fired or even disciplined, and no further investigation was conducted.

The court decided in the woman’s favor, ruling that the company had a duty to report the conduct and was liable for negligence (Cite: Doe v. XYC Corp.).

Liable when they don’t know?

In other cases, companies have avoided liability because they weren’t aware of an employee’s illegal activity.

In a recent case, an employee was severely harassing his neighbor. When police investigated, they found he had used his work telephone and computer to make nasty phone calls and post disparaging comments online about the neighbor.

The neighbor sued the employer for not stopping the harassment. But the judge didn’t buy it.

There was no evidence his manager or anyone else at the company knew what was happening. Therefore, there was no reasonable way to expect the company to do anything about it. The case was thrown out (Cite: Sigler v. Kobinsky).

The bottom line: If managers or IT staff are aware of illegal computer activity, the company may be liable if it isn’t reported. But employers likely won’t be on the hook for conduct they couldn’t have foreseen.

Read the facts of this real-life case and decide: Who won?

The facts:

An employee got in a dispute with his neighbors after their son allegedly urinated in the employee’s yard. In retaliation, the employee began a series of attacks on the neighbors. Among other things, he ordered magazine subscriptions to be sent to their house, made harassing phone calls and used the Internet to dig up disparaging information about them.

Police traced the activity to the employee’s work computer and company-owned cell phone. Since the conduct occurred at work, the neighbors sued the company for negligence.

The employer said:

The company said it had a policy against personal use of its computer, and if a manager knew what had happened, the man would’ve been fired. But since no one was aware of what was going on, the company couldn’t be held liable.

Who won the case?

Answer: The employer.

Why: The court agreed that just because the company provided the employee with a computer and a cell phone didn’t mean it could have expected any harassment of this type to occur.

To be sued for negligence, the company would need to have a reasonable expectation that something unlawful was going to happen. The case was thrown out.

Cite: Sigler v. Kobinsky