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The Scope and Need for Workplace Monitoring
                                   @ GigaLaw.com

This article explains the legal issues related to workplace monitoring and offers practical tips companies can take to protect themselves.
The author of this article, Douglas M. Towns, is a member of the GigaLaw.com Editorial Board and practices labor and employment law as a partner at Jones, Day, Reavis & Pogue in Atlanta. His experience includes representation of high-tech and other companies in Title VII, ADA and other employment matters, and he has written and lectured on issues relating to technology and the workplace. He is licensed to practice law in the state of Georgia. E-mail: douglas_towns@jonesday.com.

What Companies and Individuals Can Do to Protect Privacy in the Internet Age

Technological advances such as e-mail and the Internet are designed to make the workplace more efficient. Of course, these tools also expose employers to new types of employment law claims, including e-harassment. Some employers may decide to monitor the use of e-mail and the Internet to limit their exposure to discrimination and/or harassment claims. In addition, employers also are concerned about employees sharing, intentionally or inadvertently, the company's trade secrets and other proprietary or confidential information with competitors.

Unfortunately, without a full understanding of the risks, employers may open themselves up to potential lawsuits. In addition, such techniques may result in low morale among employees who resent being told that they cannot use e-mail for personal messages and that their every move is being monitored. Regardless of the risks, many employers have determined there is a need to monitor employees' computer usage. According to a 2001 survey by the American Management Association, nearly 80 percent of employers engage in electronic monitoring of employees' work-related communications and activities -- including monitoring employees' e-mail or Internet usage, videotaping the worksite, or recording employee telephone calls. This is a dramatic increase from 1997, when only 35 percent of employers monitored their employees. And while most of this monitoring is done on a spot-check, rather than on a continuous basis, the fact remains that more and more employers are engaging in some form of monitoring.

Tellingly, employee surveillance software sales are estimated at $140 million a year. New technological advances also provide employers a number of options in monitoring devices. For example: SpectorSoft Corp., a Florida-based software company, released a monitoring program that takes surreptitious "screen shots" of employees' computers at selected intervals for employers to view at a later date. Another company, Content Technologies, launched software called Pornsweeper that examines images attached to e-mails and searches picture files for anything that appears to be human flesh. Computer programs also exist that monitor an employee's keystrokes and can determine what the employee has typed on his computer, even if the employee did not save the document. Even prior to e-mail and the Internet, employers were forced to deal with privacy   issues regarding employees in a variety of situations, such as the use of company lockers and the company telephone system. For example, in K-Mart Corp. Store No. 7441 v. Trotti, an employee sued K-Mart for invasion of privacy after the contents of her work locker, including her purse, were searched. The employer provided lockers to employees and locks upon request. However, when the employer ran out of locks, the employee was allowed to provide his or her own lock. In this case, the employee, with her employer's permission, had secured the locker with her own lock. On appeal, the Court of Appeals of Texas in 1984 allowed the matter to be tried before a jury because the court found that, by placing her own lock on the locker, the employee had "demonstrated a legitimate expectation to a right of privacy in both the locker itself and those personal effects within it." However, in other cases other courts have come to the opposite conclusion.

Today, employees' privacy lawsuits often involve employer monitoring of e-mail and the Internet. According to the Privacy Foundation, in 2001, 40 million of the 140 million workers in the United States had access to and regularly used e-mail and the Internet at their jobs. Employees have sued employers who have monitored their communications under either common-law state claims, or federal and state statutory claims. Fortunately for employers, most cases have allowed employers to monitor employees' use of company e-mail and the Internet. However, the risk of litigation is always present.

Invasion of Privacy Claims
Most employees who have sued their employers for monitoring have done so under state invasion of privacy actions. In general, the employee must show that he or she had a reasonable expectation of privacy in the communication at issue. Because invasion of  privacy is a state law claim, the standards vary among jurisdictions.

In one case,  Smyth v. Pillsbury Co. , an employee was terminated for sending inappropriate and unprofessional messages over the company's e-mail system. The company had repeatedly assured its employees that e-mail was confidential, that it would not be intercepted, and that it would not be used as a basis for discipline or discharge. Michael Smyth retrieved, from his home computer, e-mail sent from his supervisor over Pillsbury's e-mail system. Smyth allegedly responded with several comments concerning the sales management staff, including a threat to "kill the backstabbing bastards" and a reference to an upcoming holiday party as "the Jim Jones Kool-aid affair." Pillsbury intercepted the e-mail and terminated Smyth, who then sued the company for wrongful discharge and invasion of privacy. The court dismissed the case in 1996, finding that Smyth did not have a reasonable expectation of privacy in the contents of his e-mail messages, despite Pillsbury's assurances, because the messages had been voluntarily communicated over the company's computer system to a second person. The court went on to find that, even if some reasonable expectation of privacy existed, that expectation was outweighed by Pillsbury's legitimate interest in preventing inappropriate or unprofessional communications over its e-mail system.
Some employees have attempted to argue that their expectation of privacy was reasonable because their e-mail was protected by a personal password. However, of the courts that have addressed this issue, this argument has been unsuccessful. For example, in Bourke v. Nissan Motor Corp., while training new employees on the e-mail system, a message sent by Bonita Bourke was randomly selected and reviewed by the company. The message turned out to be a personal e-mail of a sexual nature. Once Bourke's e-mail was discovered, the company decided to review the e-mails of the rest of Bourke's workgroup. As a result of this investigation, several other personal e-mails were discovered. Nissan gave the employees who had sent the personal messages written warnings for violating the company's e-mail policy. The disciplined employees sued Nissan for invasion of privacy. The employees argued that although they signed a form acknowledging the company's policy that company-owned hardware and software was restricted for company business use only, their expectation of privacy was reasonable because the company gave the plaintiffs passwords to access the computer system and told them to guard their passwords. However, a California court in 1993 held that this was not an objectively reasonable expectation of privacy because the plaintiffs knew that e-mail messages "were read from time to time by individuals other than the intended recipient."
Similarly, in McLaren v. Microsoft Corp., the Texas Court of Appeals in 1999 dismissed an employee's claim that his employer's review and dissemination of e-mail stored in the employee's workplace personal computer constituted an invasion of privacy. The employee argued that he had a reasonable expectation of privacy because the e-mail was kept in a personal computer folder protected by a password. The court found this argument unconvincing because the e-mail was transmitted over his employer's network. However, according to a news account of one case, a court held that an employer's use of a supervisor's password to review an employee's e-mail may have violated a Massachusetts state statute against interference with privacy. In that case, Burk Technology allowed employees to use the company's e-mail system to send personal messages, but prohibited "excessive chatting." To use the e-mail system, each employee used a password. The employer never informed employees that their messages would or could be monitored by supervisors or the company president. The president of the company reviewed the e-mails of two employees who had referred to him by various nicknames and discussed his extra-marital affair. The two employees were fired by the company president, who claimed the terminations were for their excessive e-mail use and not because of the messages' content. The court denied the company's attempt to dismiss the suit and allowed the matter to be set for trial on the merits. The court focused on the fact that the employees were never informed that their e-mail could be monitored.This case illustrates the importance of informing employees that their use of company equipment to send e-mail and to surf the Internet is subject to monitoring to prevent subsequent confusion, and a possible future defense, on the part of employees.

In certain cases, employees are able to pursue state and federal wiretap statutory remedies, within limits, against employers that monitor their employees' communications. In 1968, Congress enacted the federal wiretap statute, which imposes criminal liability on the use of technology to intercept and record telephone calls. The statute also provides a private right-of-action to employees who discover that their telephone calls are being monitored or recorded in violation of the statute. Employers have two exceptions to liability under the federal wiretap statute. One is known as the "business extension exemption." Under this exception, an employer may monitor its employees' communications if the "interception device" is furnished by the telephone company in the ordinary course of business. In a typical "interception case," an employer monitors its employees' telephone conversations to evaluate business-related matters such as efficiency, productivity and client service.
For example, in Simmons v. Southwestern Bell Telephone Co.,  an employee alleged that his private conversations were being monitored. The U.S. Court of Appeals for the Tenth Circuit in 1979 noted that monitoring was done both for quality control purposes and to prevent the use of monitored lines for personal calls. The court also noted that the company had provided a separate non-monitored phone line for personal calls. The court concluded that the company's monitoring activities were reasonable and in the ordinary course of business, and thus covered under the business extension exception.
A second exception, known as the "service provider exemption," came about as a result of the Electronic Communications Privacy Act (ECPA), which amended the federal wiretap statute to include the interception of electronic communications, including e-mail. Under the "service provider exemption," a provider of communications services may access stored communicatio
ns, including e-mail messages. In some cases, courts have used the "service provider exemption" to find that any company furnishing computer hardware and software may access its employees' e-mail files. Bohach v. City of Reno , a federal court in 1996 rejected privacy claims under the ECPA raised by two, police officers in Reno, Nevada. In this case, Officer John Bohach sent messages to other members of the department over the department's "Alphapage" messaging system. Several months later, faced with an internal affairs investigation based on the contents of those messages, Bohach and another officer filed suit, claiming that the department's accessing and retrieving the months-old messages violated, among other things, the federal wiretap statutes. The court reasoned that because the nature of the "Alphapage" messages were essentially e-mail, the officers could not reasonably have believed them to be private. In addition, the court pointed to a department order informing employees that their messages would be "logged on the network" and that sending certain types of messages were prohibited. The court found that the city was a "service provider" as defined under the ECPA, and was "free to access the stored message as it pleased." Therefore, the court found that the city had not violated the ECPA.

Practical Steps Companies Can Take To Protect Themselves.
 Although there is no way to completely insulate a company from these suits, employers may consider one or more of the following suggestions:
-Integrate e-mail and other policies.
An employer's e-mail policy could be integrated with the company's harassment and non-discrimination policies. If so, the policy should make clear that e-mail communications will be treated as any other business communication and that use of the e-mail systems to engage in communications that are in violation of company policy -- including transmitting defamatory, offensive or harassing messages -- is explicitly prohibited.

- Limit use of technology to business purposes only.
 Electronic communications could be referenced expressly in any lists of "company property." Employees should be notified that all technology, including e-mail and access to the Internet, is provided by the company to assist employees in carrying out the company' business purposes. Explicitly state that employees who use company property -- including e-mail, telephones and Internet access, --for personal use is in violation of company policy and are subject to disciplinary action.

-Reserve right to review and monitor.
To advance the argument that monitoring is appropriate, employees should be notified that the employer will treat all messages sent, received, or stored in the e-mail system as business messages, which the company is entitled to review, monitor, and disclose. The company should warn employees that if they make incidental use of the e-mail system to transmit personal messages, such messages will be treated no differently from other messages; that is, the company reserves the right to access, review, monitor, or disclose such messages. The policy should state explicitly that employees should not use company e-mail to send or to receive any messages that they wish to remain private. In addition, employers should notify employees that even though their files may be protected by passwords, such passwords do not prevent system administrators and other authorized employees from accessing messages for business purposes.

- Include notice and consent language.
 Include in the policy language that by using the company's electronic communications systems, the employee is, in effect, aware of and will be covered by the policy. In addition, by using the e-mail system, the employee expressly consents to the company's review and monitoring of e-mail messages as outlined in the policy.

- Strictly define appropriate Internet use.
When employees are permitted access to Internet sites, provide guidelines regarding its use. For example, an employer's policy may provide that employees may access the Internet only through the employer's approved Internet access procedures. In addition, an employer may wish to restrict or to prohibit subscribing to public mail forums, discussion groups, and the like. A company must determine and incorporate guidelines for an employee's failure to comply with its Internet and e-mail policies, or the policies are useless. Determine the penalties for specific policy violations, communicate them to the employees, and then enforce them consistently. Employers may wish to obtain an acknowledgment that the employee received the policy and that the employee intends to comply.

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Legal issues involved in monitoring

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Legal issues involved in monitoring