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A matter of policy: Doing 4 things right helps win lawsuits

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in Employee Benefits Program,Employment Law,HR Management,Human Resources

Typically, our “In the Spotlight” column focuses on what went wrong—and what employers can learn from mistakes others have made. This month, it’s refreshing to report on an employer that did everything right, and emerged victorious from court.

It’s a mantra that can’t be repeated too often: Develop a policy, communicate it to your employees, investigate when you learn of possible infractions and, if wrongdoing did occur, punish those who violated the policy.

The case involves Jervone Wells, a former employee of Stryker Orthopaedics Corp., who was fired for violating Stryker’s policy against distributing sexually provocative images through the company’s e-mail system. After he was terminated, Wells applied for unemployment benefits.

But the New Jersey Department of Labor turned down his application, and now a New Jersey appeals court has upheld that decision. The case is Wells v. Board of Review (2008 WL 4272388, App. Div., 2008)

‘Inappropriate,’ at the least

Stryker has a policy and code of conduct that prohibits employees from using its computer network to create or distribute inappropriate materials, such as pornographic, harassing or offensive content. The employee handbook lists the policy, which is reinforced by a startup message that appears on the computer screen every time an employee accesses the system.

Wells used a company computer to send an e-mail to his wife stating, “Never dress up as a llama.” Attached to the e-mail was a graphic video depiction of two men, dressed in llama costumes, engaging in an apparent sex act with an elk or a deer.

Wells also used his employer’s computer network to distribute a lingerie calendar displaying images of “obese women dressed in lingerie.” Wells meant to send the calendar just to certain co-workers, but inadvertently directed one of the e-mails to an HR director. HR investigated and ultimately terminated a number of employees, including Wells, for violating the company’s computer and e-mail policy.

The unemployment comp claim

Wells filed for unemployment benefits with the New Jersey Department of Labor. He admitted he sent the e-mails in question and acknowledged receiving a copy of the company handbook that contained the policy concerning inappropriate e-mails. The Department of Labor decided Wells had been discharged for “misconduct connected with the work” and denied his claim for benefits.

When Wells filed an appeal, he presented two arguments.

With respect to the lingerie calendar, Wells contended that his actions did not violate company policy because the women were in fact clothed (albeit with lingerie) and the message did not depict nude models.

He also claimed Stryker fired the other employees because of financial reasons, not for violating the computer policy. In addition, Wells stated that other employees who had violated company rules in the past hadn’t been terminated, but received lesser penalties such as warnings or suspensions.

The appellate court was not persuaded by his arguments. The court agreed with Stryker that the content and images were obscene and inappropriate. It said distributing them violated the company’s policy and amounted to a misuse of the employer’s computer system. As a result, the court upheld the denial of unemployment comp benefits.

Funny case, serious problem

There’s no doubt this is an unusual case, and, at first blush, it doesn’t seem to present a weighty employment law issue.

However, the case reinforces some basic legal principles concerning computers in the workplace, and illustrates the court’s ability to adapt the law to the fast-changing technological landscape.

The state almost routinely grants unemployment benefits to discharged employees unless there is strong evidence of misconduct. Yet, the court in Wells had no difficulty denying benefits to the employee because the company did four simple things—and did them well.

1. First, the company had a reasonable policy in place that prohibited the misuse of its computer network.

2. Next, the employer communicated the policy
to the staff, both in writing and in electronic form.

3. HR took appropriate action
by conducting a prompt investigation when it received information that the e-mail system was being used for improper purposes.

4. And finally, the company terminated the wrongdoers for their misconduct.

What’s the lesson here? Have a solid policy, communicate it, investigate violations and take disciplinary action when there are grounds to do so.


Shawn Barnes, a law student and summer associate at Genova, Burns & Vernoia, assisted in the preparation of this article.

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