Stuart Adams Law Office, a Professional Service Corporation   HOMEARTICLE INDEXSERVICES & FEESABOUT USDISCLAIMER

Business PlanningBusiness Start-upsBusiness OperationsBusiness ContractsBusiness Protection

Business DisputesEstate PlanningEmployee IssuesE-CommerceHi-Tech Issues

Business CalculatorsEconomic IndicatorsVenture Capital OnlineLocal InfoLegal Humor




This article by Stuart Adams appeared in Louisville Computer News March, 1999

The Internet is becoming the medium of choice for many businesses, for advertising, communications and commercial transactions. A high percentage of businesses had not figured out how to effectively deal with employee actions before the dawn of e-commerce. The telephone, office memo, fax, and copy machine have long been a veritable sieve in the unauthorized flow to the outside world of confidential company secrets and dissemination of inappropriate communications by employees.

Just as employees used to hide behind the anonymity of a "private" phone call, an unsigned memo, or suggestive cartoon secretly placed near the "water cooler," now there may be an even greater tendency to believe that the digital version of such communications will escape management scrutiny. In fact, electronic tools may provide more "bang" for the buck, but this isn’t necessarily always a good thing.

Although many companies find it "essential" to give their employees nearly unfettered access to the Internet, both at work and away, such freedom does not necessarily always bring a corresponding compliance with regulations imposed by the employer. Even if the employer tries to curb or monitor such access, it may find that its employees are often just a little ahead of them on the learning curve. Just as many security companies are hiring hackers to help keep other hackers out of customer computer systems, some companies are finding "moles" placed by competitors, disgruntled or bored employees and other insiders to be their biggest nightmare.


There are any number of ways under-restrained Internet access can harm a company. The damage can easily span the range from accidental to malicious. Some of these problems are:


Typically, an employer can be held liable for acts of an employee committed within the scope of their employment. They can also be held liable for acts committed outside of the scope, if the employer was negligent or reckless in supervising them. Additionally, there is the legal theory of apparent authority, which may come into play. This theory of employer liability for employee action arises when the employer’s own negligent act or inaction has aided the employee to hold themselves out to the public as having the authority to act on behalf of the employer.


Drafting and taking reasonable steps to enforce an employee Internet policy will go far to protecting the business from liability for inappropriate uses of the Internet by employees. The policy should:

There is certainly software available which would allow an employer to automatically screen and block many uses of the Internet by employees, in a way similar to that being used by parents to keep their children from inappropriate sites. How many people reading this article, however, had a co-worker download and perhaps print out the voluminous report by Ken Starr, when it was released over the Internet. I can tell you that I was in a client’s office while this was being done by a secretary at the request of the owner, but I suspect some owners had the same experience without knowing it.

Keep in mind also that the Digital Millennium Copyright Act makes it illegal to alter copyrighted material, such as by manipulating graphic images or removing the author’s name to incorporate in your "own" work. Employees eager to finish the report and incorporate data found on the Internet may easily be guilty of such violations. There are a wide variety of such potential illegal acts by employees which may come back to haunt the employer. With embedded identification of graphic images and the new Pentium III being released with an embedded identifying number, many of these acts may now be traced back to a company workstation.


How many of your employees may be spending their time in non-business oriented chat rooms. With AOL and other services now allowing you to know who is online in real time, many employees may be tempted to try to catch friends and family while they are at work or may try to bridge a time zone issue through a chat room. When they send the e-mail message, however, will it carry "" for the world to see as the home address? Obviously this presents a whole new wave of issues.

There may actually be some help for bad actions under your company’s general liability insurance policy. If you are the boss, CIO or risk assessment manager, you might want to have your lawyer or insurance agent help you check out your coverage and exclusions. Quite often, harassment claims are excluded from such policies, although there are new policies coming out specifically for such matters. Check this out with your team of business counselors.

The Internet opens a whole new world of opportunity for business. Along with the open door there are new issues and challenges. As you explore, make sure you monitor the direction and extent of your employees’ exploration, and that of your competition to keep your company headed in the right direction. 

Stuart  Adams Law Office, P.S.C.
8909 Featherbell Blvd.
Prospect, Kentucky 40059-7673
Phone (502) 509-4115

Norton Commons Office

Prospect, Kentucky

by appointment only



2014 Stuart Adams Law Office, P.S.C.