Sometimes cases with disgusting facts provide good law for employers. A case recently decided by the Wisconsin Court of Appeals proved that point in reversing a $1.4 million judgment on claims for negligent training and supervision against a security company based on the off-duty Internet activities of one of its employees.

As security manager at a Polaris Industries facility, Troy Schmidt an employee of Polaris’ security provider, was responsible for creating identification badges of Polaris employees using photographs stored on a Polaris database. Schmidt copied the photographs of approximately thirty, female Polaris employees to a flash drive, printed them at home, ejaculated on them, and posted the adulterated photographs on an adult website that he created through Yahoo!.

Polaris promptly took control of the efforts to reverse the harmful effects of Schmidt’s bizarre conduct. Polaris took the following steps:

• Investigated and determined that Schmidt was the likely perpetrator;
• Contacted Yahoo! to request the removal of the photographs;
• Met with Schmidt and obtained his admission to the conduct;
• Obtained Schmidt’s agreement to de-activate the website;
• Obtained confirmation from Yahoo! that Schmidt had de-activated the website;
• Met with police personnel (who declined to prosecute).

After learning of the matter from Polaris, Schmidt’s employer, the security company, offered to provide assistance, participated in the interview of Schmidt, and fired him shortly after hearing his admission. Notably, the ten plaintiffs sued only the security company and not Polaris.

In reversing the large judgment against the security company, the Wisconsin Court of Appeals pronounced a rule that should provide a measure of relief for all employers: “[E]mployers have no duty to supervise employees' private conduct or to persistently scan the world wide web to ferret out potential employee misconduct.”

Beyond that pronouncement, the court emphasized several other factors. Schmidt’s conduct was “bizarre and unexpected,” indeed “unimaginable.” The security company had trained Schmidt in sexual harassment, employee theft, and his duty to comply with Polaris’ computer usage policy. The security company had no reason to know that Schmidt might engage in Internet abuse. The security company cooperated in Polaris’ response to the incident to the extent permitted by Polaris.

The court’s rejection of a duty to monitor employees’ off-duty Internet activities appears to provide employers with an unbeatable defense in cases like this one. Still, the result might have been different had Schmidt’s employer not provided training, or if Polaris and the security company had not acted promptly once the offending conduct became known. Consequently, when there is a tight nexus between an employee’s job duties and an employee’s off-duty Internet abuse, employers should consider taking some of the proactive measures that Polaris and the security company took. Such measures might not only help to defeat liability but prevent the filing of a lawsuit in the first place.

This entry was written by Philip L. Gordon.

Photo Credit: Matthew Bowden