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Employers have more sophisticated tools to monitor employees in the workplace as technology continues to advance at warp speed. While there are some legitimate reasons for employers to monitor workers, employees are making demands for privacy in the workplace. This article addresses federal law in this area, examines effective workplace policies, and looks at a recent court decision holding that employers may retrieve stored employee e-mail messages. It is important to keep in mind that some states have laws on the books dealing with workplace monitoring, and in certain instances these laws impose additional or different requirements than set forth in federal law. REASONS FOR MONITORING Employers seek to monitor employees for a number of reasons. They want to ensure that employees are protecting the company’s information assets, including intellectual property, trade secrets and confidential information. Employers also seek to make sure that employees are truly working, as opposed to doing personal business on company time. Through monitoring, some companies have learned that certain employees are spending inordinate amounts of company time surfing the Web for personal reasons (such as visiting adult sites); when this has been discovered, those employees have been terminated from employment. Employers also want to make sure that employees are not violating the law in any way. They want to ensure that employees are not engaging in conduct that constitutes discriminatory conduct towards others, or that creates civil liability based on defamatory speech or other violations. THE ELECTRONIC COMMUNICATIONS PRIVACY ACT The primary federal statute in this context is the Electronic Communications Privacy Act (ECPA). The ECPA bars the intentional interception of any wire, oral or electronic communication, or the unauthorized access of stored communications. The operative words are “interception” and “unauthorized.” “Interception” is construed to mean the acquisition of the content of a wire, electronic or oral communication through the use of any electronic, mechanical or other device. “Unauthorized” is interpreted to mean trespassing. The ECPA has three main exceptions. If one of these exceptions is satisfied, monitoring can take place under appropriate circumstances. The first exception is the Business Extension Exception. This exception excludes from the ECPA telephone equipment furnished by a telephone company connected to a phone line and used in the ordinary course of business. This means that employers can generally monitor business-related phone calls. But once an employer ascertains that a particular call is personal in nature, the monitoring must cease immediately. This exception has been interpreted not to include voice-activated tape recorders attached to phone lines. Thus, monitoring in this way very well could violate the law. The next exception, the Consent Exception, is the most clear. Namely, there must be consent provided regarding the interception of communications. But it is not enough for an employer to tell employees that communications may be monitored, as employees still may have a reasonable expectation of privacy in their communications. Rather, employers wanting to monitor communications should inform employees that their communications in fact will be monitored. Ideally, employers should obtain written statements of consent from employees. It is important for employers to understand, however, that employee consent cannot override the ECPA. Thus, for example, employers cannot monitor personal phone calls of employees even if they obtain consent. The third exception is the Service Provider Exception. This was intended to benefit wire and electronic service providers. It may apply to employer-provided phone systems. It probably applies to e-mail systems provided by employers, allowing employers to retrieve and access stored e-mail messages. For this last exception to apply, the system must be provided by the employer. Furthermore, the employer’s monitoring activities must be initiated to protect employer property rights. PENALTIES AND CAUSES OF ACTION Employers need to be quite careful with respect to their monitoring activities. Penalties for violating the ECPA can be extremely harsh and can include: the greater of actual damages plus profits or statutory damages; injunctive and declaratory relief; criminal penalties; punitive damages; and attorneys’ fees and costs. Improper employer conduct has led to other causes of actions asserted by former and current employees, including violations of state interception laws; invasion of privacy; defamation; employment discrimination; violations of the National Labor Relations Act; intentional infliction of emotional distress; and even false imprisonment. BUSINESS EQUIPMENT POLICIES It is imperative that employers develop effective business equipment policies, preferably with the assistance of counsel. In so doing, employers will obtain consent where appropriate, will be less vulnerable to legal action, and most importantly, will deter upfront improper employee behavior on company time. An effective business equipment policy should state that all systems and equipment are the employer’s property and are to be used only for business purposes. It also should state that employees cannot have any expectations of privacy when using the systems and equipment. The policy should further state that all systems and equipment will be monitored, and that employee use of the systems and equipment constitutes consent to monitoring. The policy also should provide that improper e-mails are prohibited and that sensitive or confidential information should be marked and treated as such. The policy also can provide that physical premises are subject to inspection, including desks and drawers. Once a policy has been formalized, it should be broadly distributed by way of handbooks, bulletin boards and otherwise. It also should be redistributed periodically. Finally, employees should sign formal consents to the policy. In this way, there will be little guesswork about employer monitoring and expectations of privacy. RETRIEVAL OF STORED E-MAIL MESSAGES As recently as March 27, 2001, a U.S. District Court judge ruled in Fraser v. Nationwide Mutual Ins. Co., Case No. 98-CV-6726 (E.D. Pa. 2001), that an employer may retrieve employees’ stored e-mail messages under certain circumstances without running afoul of federal law. The key fact for Judge Anita Brody in the case was that the intended recipient employee had previously received the e-mail that the employer retrieved from its file server. As a result, she found that the e-mail had not been “intercepted” under federal law, as the dictionary definition of interception means “to stop, seize, or interrupt in progress or course before arrival.” Interestingly, Judge Brody noted that while such retrieval “is not legally actionable under the ECPA,” it “may in fact be ethically ‘questionable.’” However, to the extent an employer has an effective business equipment policy, it is difficult to discern any ethical issues when there has been prior disclosure of such legally proper electronic monitoring activities. PARTING WORDS Even employees who are concerned about their privacy rights are better off knowing in advance by way of a lawful business equipment policy what an employer may do in terms of monitoring, so that these employees can avoid engaging in certain private communications at work that may be monitored by employers. Eric J. Sinrod is a partner focusing on technology and litigation issues in the San Francisco office of Duane Morris LLP. Please access his website at sinrodlaw.com and his firm’s website at Duane Morris LLP .

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