FOR PULA BINANI - Business

Workplace Privacy: Employee Relations and Legal Implications of Monitoring Employee E-mail Use

Barry A. Friedman & Lisa J. Reed

Published online: 7 April 2007 # Springer Science + Business Media, LLC 2007

Abstract The tradeoff between employees’ workplace privacy and employers’ need to protect company assets, safeguard proprietary information, and avoid costly litigation has been receiving increased attention (Lee and Kleiner 2003; Mello 2003; National Workplace Institute 2004). This tradeoff often favors employers, as the legal system provides much leeway for employers to monitor employees’ electronic communications in the workplace. However, employers need to consider the effect such monitoring has on their employees since employee and employer attitudes about monitoring often diverge. In this article, we explore workplace email monitoring from both employee relations and legal perspectives and discuss implications for employee morale.

Key words privacy. employee monitoring . surveillance . email . morale

Introduction

An early law review article by Justices Warren and Brandeis (1890) revealed the authors’ concern about the increasing loss of privacy in a rapidly changing world where the burgeoning newspaper industry and “numerous mechanical devices” such as cameras were compromising the individual’s “right to be let alone” (quoting Cooley on Torts, 2nd ed., p.29) and their belief that the law should protect individual privacy (Warren and Brandeis 1890). The expectation that the law protects a variety of privacy rights, including the U.S.

Employ Respons Rights J (2007) 19:75–83 DOI 10.1007/s10672-007-9035-1

An earlier version of this research was presented at the 2005 Association on Employment Practices and Principles Conference, Baltimore, MD.

B. A. Friedman (*) School of Business, State University of New York at Oswego, Oswego, NY 13126, USA e-mail: [email protected]

L. J. Reed Pamplin School of Business, University of Portland, 5000 N. Willamette Blvd., Portland, OR 97203, USA e-mail: [email protected]

Constitution’s fourth amendment protection against “unreasonable search and seizures,” the extension of fifth amendment due process protection to a variety of personal property rights and common law invasion of privacy protection is ingrained in American society. Increasingly however, personal information such as where, how and when we spend money is gathered instantaneously by a variety of entities such as credit card companies and merchants (Fishman 2004). Additionally, when citizens take on the role of employees, their right to privacy is increasingly subjugated to employers’ interests. A number of factors have influenced this erosion of workplace privacy, including an increased competitive business environment, legislation ostensibly enacted to protect individuals’ privacy but which also largely acts to protect employers’ interests, new technology that enhances employers’ ability to monitor electronic communications, and the need for employers to avoid costly lawsuits.

Employee monitoring appears to be on the rise (Mello 2003). Software manufacturers expect the sale of computer monitoring and surveillance software to businesses to increase from $139 million in 2001 to $622 million in 2006 (Wakefield 2004). According to an American Management Association (“AMA”) survey conducted in 2005, 76% of the organizations reported that they monitor employees’ website connections, 65% use software to block connections to inappropriate websites, and 36% tracking specific keystrokes (Electronic Monitoring and Surveillance Survey 2005). This contrasts with a 1997 AMA survey where 67% of the organizations reported that they use some form of electronic monitoring (Lee and Kleiner 2003). The erosion of employee privacy by such practices as electronic monitoring and surveillance, however, comes at a cost in the form of increased stress and decreased employee morale, satisfaction and trust in their organizations and management (Hornung 2005; Lee and Kleiner 2003).

In this article we discuss the reasons employers monitor their employees’ email communications, followed by a review the current legal status of such monitoring relating to nongovernmental, nonunionized, private employers. We then explore the employee relations implications of such practices. Finally, we offer suggestions for reconciling employers’ legitimate need to monitor or limit employees’ email use with employees’ legitimate concerns about compromising their own privacy interests.

Employer Motivation for Monitoring Employees’ Email Use

Employers have several legitimate reasons to monitor employees’ email use, such as productivity concerns and the employer’s fiduciary responsibility to stockholders to protect company assets. There are valid fiscal reasons for employers to monitor communications to ensure that physical assets such as property and files are assured. The loss of these assets could mean a decrease in company value and confidence in the investment community. Perhaps an even greater threat to employers’ well being is the potential loss of intellectual capital in the form of trade secrets or proprietary information that may result from the inappropriate dissemination of company confidential information to competitors.

Employers are also increasingly monitoring their employees’ email to curb their own potential liability stemming from employees’ use (or misuse) of email while at the workplace. For example, employee use of email to send sexually offensive material could potentially expose the employer to liability for race or gender discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”) or through tort claims holding the employer vicariously liable for an employee’s tortious behavior (such as intentional infliction of emotional distress) towards another employee. Such liability is not without precedent, although the courts are as yet divided on the issue (Gabel and Mansfield 2003).

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Many courts have allowed evidence of offensive emails as being probative of the existence of a hostile work environment, although most plaintiffs also provided evidence of having suffered from extremely offensive workplace conduct in addition to the offensive emails to establish the employer’s liability (Gabel and Mansfield 2003, p.333). As Gabel and Mansfield discuss, however, employers are taking notice of this potential liability, sometimes acting proactively. For example, in 2000, the New York Times fired 24 employees who sent “potentially offensive emails” and Chevron recently paid 2 million dollars to settle a lawsuit brought by employees of a Chevron subsidiary based on emails they received containing sexually offensive jokes (Gabel and Mansfield 2003, p.334). In March 2005, Harry Stonecipher, Boeing’s relatively recent CEO (hired in the wake of the well publicized corporate scandals in 2001–2002), was forced to resign after Boeing discovered several sexually explicit emails to another Boeing executive. Although apparently the recipient of these emails was engaged in a consensual relationship with Stonecipher and had not complained about the emails, the relationship flew in the face of an ethics policy created under Stonecipher’s leadership. Additionally, since Boeing now had notice of the emails, it also faced potential liability for sexual harassment in the event the relationship between Stonecipher and the other employee soured and she decided to raise a complaint of discrimination under Title VII.

Legal Parameters of Monitoring Employee Email Use

Federal constitutional protections of employee privacy apply only to public sector employees (Lasprogata et al. 2004, p. 66). Some states, however, do provide privacy rights to both governmental as well as non-governmental employees, either in the state constitution or via tort claims such as invasion of privacy. For example, the California Constitution specifically extends the “unalienable right” of “privacy” to all people (Cal). The primary legal sources governing employers’ ability to monitor their employees’ e-mail use are state and federal statutes.

Under the Electronic Communications Privacy Act (“ECPA”) of 1986, Congress extended laws relating to wiretapping to electronic communications such as email and internet use (Electronic 2005). Although the ECPA prohibits interception or attempts to intercept any electronic communication, its exceptions to this prohibition ultimately result in very little protection for the employee against workplace email monitoring (Fishman 2004). Under the “ordinary course of business” exemption, for example, employers may monitor email communications if the employer can show a legitimate business purpose for doing so. Since employers face potential liability stemming from employees’ illegal email use (such as sexual harassment claims), as well as enormous financial losses from loss of proprietary information due to employees’ email use, employers can fairly easily establish a legitimate business purpose for monitoring employee email use in the workplace. Indeed, when discussing an employer’s right to monitor employer provided computer equipment, the 7th Circuit Court of Appeals admonished, “...the abuse of access to workplace computers is so common (workers being prone to use them as media of gossip, titillation, and other entertainment and distraction) that reserving a right of inspection is so far from being unreasonable that the failure to do so might well be thought irresponsible” (emphasis added) (Muick 2002, p.743). In Muick (2002), an employee unsuccessfully asserted that he had a reasonable expectation of privacy in the contents of an employer provided laptop. The court held that any expectation of privacy the employee had should have been destroyed by the employer’s articulated policy that it reserved the right to inspect the equipment (Muick 2002, p. 734).

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An employer may also legally intercept and monitor employee electronic communica- tions if the employee either expressly or impliedly consents to being monitored (Rogers 2000, p.4). As Fishman (2004, p. 1526) discusses, this exception applies most often in contexts where the employee deals regularly with the public and the employer monitors the employee’s business related calls to insure appropriate, quality communications between the employee and the customer.

Perhaps the broadest license for employers to monitor employees’ emails stems from the federal Stored Communications Act included in the ECPA, which allows providers of electronic communications service (such as employers) to access stored electronic communications (Electronic 2005, Section 2701). Unlike the ECPA restrictions relating to monitoring electronic communications during transmission, if an employer is examining post-transmission communications, it may do so without demonstrating a legitimate business purpose for such examinations (Fishman 2004, p. 1529). Thus, if an employee is using an employer provided Internet service provider, the employer will not be constrained from accessing records of these communications.

Employees also have potential avenues for protecting their privacy in the workplace through common law claims such as invasion of privacy, wrongful discharge or contracts actions. Most courts confront the issue of employee privacy by considering whether the employee had a “reasonable expectation of privacy” in the communication (Lasprogata et al. 2004, p. 65). “Generally, however, employees do not have a reasonable expectation of privacy where communications are sent over a company-controlled email system” (Lasprogata et al. 2004, p. 65).

This is especially well established when the employer has established a clear policy notifying employees that their electronic communications in the workplace are subject to being monitored by the employer. For example, in Thygeson v. U.S. Bancorp. (2004), the court held that the plaintiff, a former employee of defendant, did not have a reasonable expectation of privacy in information relating to the websites he visited or the material he downloaded while at work, even though some of the information related to websites he visited via access from his own personal, web based Netscape account. The court acknowledged that employees might have greater expectations of privacy when accessing their own personal internet email accounts than when they are accessing their employer provided email accounts; however, the court still determined that those expectations do not rise, legally, to a level required to prevent the employer from gaining access to that information when the employer has a specific computer policy to the contrary (Thygeson 2004).

Notably in Thygeson (2004), the employer had only accessed the names of the websites the employee had visited rather than the actual content of any email communications and the court specifically confined its opinion to this context. While monitoring the actual content of an employee’s email is more intrusive than merely recording the websites visited by the employee, in light of the myriad of cases finding that the employer’s interests in monitoring an employee’s workplace email and internet use outweigh an employee’s privacy interests and expectations, especially if the employer had a specific policy putting employees on notice of such monitoring, presumably U.S. Bancorp’s monitoring of Thysegon would have been deemed legitimate even if it had accessed the content of those emails.

The Thygeson opinion emphasized the existence of a clear policy that stipulated the employer’s right to monitor employees’ email use. Such a policy, however, is not necessarily required for such monitoring to be upheld by the courts. Employees have often brought claims under contract law, asserting that the employer’s monitoring violated its

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promises contained in employment contracts, collective bargaining agreements or even in employee training manuals, etc. (Lasprogata et al. 2004, p. 68). However, as reflected in the district court’s opinion in the oft cited case of Smyth v. Pillsbury Co., it is not difficult for the employer to prevail in such cases, even if the employer made oral promises to its employees that it would not read employee email or terminate employment or discipline employees based on their emails (Lasprogata et al. 2004, p. 67).

In Smyth (1996, p.101), the court held that there is no “reasonable expectation of privacy in e-mail communications voluntarily made by an employee to his supervisor over the company e-mail system notwithstanding any assurances that such communications would not be intercepted by management.” Additionally, the court held that even if the employee had had a valid privacy interest in his email communications, the employer’s actions did not violate that interest. “...[T]he company’s interest in preventing inappropriate and unprofessional comments or even illegal activity over its e-mail system outweighs any privacy interest the employee may have in those comments” (Smyth 1996, p. 101).

As of yet, there have been few cases involving instances of employers monitoring employees’ personal, web based email accounts (such as Netscape or AOL accounts), but this issue raises important questions. First, does the employer have the right to monitor such accounts? Second, should the employer monitor such accounts as a way, for example, to reduce potential liability stemming from an employee’s improper use of these accounts at the workplace? The Thygeson (2004) court addressed the first question and acknowledged that employees do have a greater expectation of privacy over their personal, web based accounts. But, as discussed above, the Thygeson (2004) court also found that legitimate employer interests can prevail over such expectations of privacy, especially since the employee is accessing the personal, web based account from the employer provided network.

The second question raises more potentially troublesome issues. In 2003, the Sixth Circuit Court of Appeals considered a lawsuit against an employer by a third party who had been harmed by the inappropriate use of an employee’s personal, web-based email account (Booker 2003). In Booker, an employee of Verizon (defendant’s business name) created a fictitious email account under the name of Booker, an employee of the State’s Attorney General’s office, and sent rude, offensive emails to Verizon customers purportedly authored by Booker (2003) (but really authored by the Verizon employee). Booker (2003, p. 518) sued Verizon for various claims, including intentional infliction of emotional distress, based on Verizon’s vicarious liability for the torts committed by its employee.

To establish vicarious liability, Booker had to establish that the employee was “acting within the scope of his employment at the time of the act” (Booker 2003, p 518). The court concluded that Verizon could not be held vicariously liable in this instance even though the employee who sent the offensive email was employed to respond to customer com- plaints (ostensibly the context of the offensive email) and the tort seemed to be committed during working hours (Booker 2003, 518). Crucial to the court’s decision were the facts that the offensive emails to Verizon customers certainly could not be deemed “in furtherance of the employer’s business,” since the emails encouraged the customers to discontinue Verizon service and that Verizon should not have expected such employee conduct (Booker 2003, 519).

The Booker (2003, p. 519) court quoted the lower court’s opinion regarding this last factor and said that “creating false third-party email accounts and sending intentionally- offensive emails is not expected from company employees.” Even though the employer in this case escaped liability for its employee’s torts committed via the employee’s personal, web-based email account, the court’s opinion should cause employers to pause and consider the ramifications for future such torts, especially if the employee’s behavior could be

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construed as attempts to further the employer’s interests. As incidents of inappropriate use of personal web-based email accounts accessed at the workplace through the employer provided network increase, presumably an employer’s “expectations” of such behavior also increases. If employers are ultimately held responsible for anticipating illegal behavior stemming from employees’ workplace use of employer provided email accounts as well as the employees’ own personal web-based email accounts, employers might consider expanding their computer monitoring policies to cover such use. However, since no employer has yet been held responsible for an employee’s wrongful use of a personal web- based email account, it is probably premature for employers to feel compelled to monitor employees’ use of these types of accounts in the workplace to avoid liability to third parties.

The Employee Relations Implications of Monitoring

While employers have many legitimate reasons to monitor employees’ electronic communications, they also need to consider negative implications of increased employee monitoring in terms of the effect of such practices on employee perceptions and attitudes. Employees assert that electronic surveillance violates their right to privacy, infringes on their human dignity, decreases employee loyalty, increases stress, and ultimately decreases productivity (Lee and Kleiner 2003). Studies have linked computer monitoring with elevated stress levels, anxiety and anger (Smith et al. 1992).

Much of the conflict between employers and employees relating to privacy issues may stem from a divergent understanding of employers’ motivations for monitoring employees’ email use and their differing views relating to legitimate privacy expectations at the workplace. Employees and their managers do not agree regarding why employers monitor email communications. For example, while employers do monitor and restrict employee email use to insure a productive workplace, that is not the sole reason and often not even the most important reason for such monitoring. According to a 2005 SHRM sponsored survey; however, employees perceive monitoring of email to be the employers’ motivation far more than managers do (64% and 39%, respectively) (Esen 2005, p.29). Additionally, while 51% of the employees surveyed listed employer monitoring of employee activities at the workplace as a way to track employee time spent on personal business while at work, only 31% of the managers listed this as a reason for monitoring employees (Esen 2005). As employer representatives, managers are more likely than employees to agree that organizations have the right to monitor employees. Also, managers legitimize monitoring employees to protect the organization, whereas employees largely view such monitoring as a way for the employer to increase employee productivity or to curb employee attention to personal matters while at work (Esen 2005). Another telling discrepancy between management and employee perspectives is that 34% of the employees surveyed believed that monitoring reveals employers’ lack of trust in employees while only 2% of the managers listed lack of trust in employees as a motivating reason for monitoring employees (Esen 2005, p.29).

Recent research may provide insight into understanding employee reactions to organizational monitoring. Zwieg and Webster (2002) reported that certain technologies cross the line from being perceived as benign to being viewed as unfair and invasive. These authors claim that a psychological barrier to monitoring acceptance exists when organizations breach such barriers. Once such barrier may be when organizations monitor communications that employees view as non-work related, or activities outside the workplace. Related research may further increase our understanding of the circumstances

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under which employees may accept monitoring, even when it extends beyond the workplace. Early field research conducted by Tolchinsky et al. (1981) suggested that employees were more likely to perceive an invasion of privacy when employees did not provide consent, unfavorable consequences resulted, personality as opposed to more objective performance information was disclosed, and individuals external to the organization received information. Eddy et al. (1999) also concluded that employee consent to the disclosure of information is important. The concept of procedural justice is useful in this context. Procedural justice refers to the perceived fairness of the organization’s processes and procedures used to make resource and allocation decisions (Ambrose and Cropanzano 2003).

Monitoring may be more acceptable to employees when they perceive that procedures are in place that ensure privacy. Stoney and Tompkins (1997) argue that employee involvement in the design and implementation of monitoring systems and the restriction of monitoring to performance-related activities may increase acceptance. Procedural justice may also serve to increase employee trust in management (Culnan and Armstrong 1999). Tabak and Smith (2005) described trustworthiness as a “group of traits and behaviors that subsequently leads to lower levels of turnover, increased organizational commitment, and lower levels of electronic monitoring”(p. 173). These authors contend that secret electronic monitoring of employees is likely to result in the perception that management is untrustworthy.

Conclusion

Employers must protect company assets and avoid potential litigation, yet still be able to attract, retain and motivate their workforce. Smith and Faley (2001) frame the dilemma well when they state,

Surprisingly, at a time when workplace privacy issues are receiving more publicity, many companies are competing openly to develop loyalty among their workers, especially knowledge workers (p. 11).

Employees’ perception of invasion of privacy may increase as employers expand their monitoring activities beyond email communications. Until recently, the issues relating to monitoring employee email use were mostly confined to workplace monitoring of employer provided email accounts. As employment practices develop such that employees increase their use of personal, web-based email accounts while at the workplace, we need to expand our consideration of these issues. The extent to which employees should expect privacy in their email communications beyond the scope of the traditional workplace use of an employer’s email system has not been established by the courts, nor has the employer’s potential liability stemming from these communications.

Adverse employee reactions to perceived invasion of privacy have also surfaced in other domains, notably in the area of employee selection testing, drug testing, and background checks (Stone and Stone 1990). Stanton (2003) showed that failing to protect privacy made the organization seem less attractive as an employer, and potentially a source of discrimination among black applicants who, as a group, have historically experienced employment discrimination. Mastrangelo and Popovich (2000) showed that employees perceived that their organizations’ drug testing invaded their privacy, which was related to turnover intentions. Since research has demonstrated that turnover intentions predict actual turnover (Richer et al. 2002), these results are important to employers seeking to reduce costs incurred from turnover.

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Negative reactions to organizational monitoring are likely to increase when employees perceive that it extends beyond the workplace. According to the Society for Human Resource Management and CareerJournal recent Workplace Privacy poll, 48% of employ- ees disagreed that organizations have a right to monitor the use of cell phones (Esen 2005). Only 38% of employees agreed that organizations have the right to monitor employee instant messaging. (The survey did not specify if the cell phone or instant messaging pertained to company owned equipment or was done during work hours.) When compared to employees, Human Resource Managers that were surveyed were more likely to agree that organizations have the right to monitor employee cell phone conversations (76%) and Instant Messages (86%). Pearce and Kuhn (2003) report that employers’ attempts “to gather information about employees’ off duty behavior are perceived to be invasions of privacy and frequently elicit angry responses” (p. 372). While these authors’ investigation did not include electronic monitoring, they stated that employers need to publish guidelines in this area.

As the employer develops its policies, it needs to be mindful of any applicable state and federal regulations. For example, in addition to the ECPA, employees may have privacy protections under the federal National Labor Relations Act of 1935 (King 2003), or state wiretapping statutes. The employer should formulate clear, comprehensive policies relating to email monitoring, including issues of personal use at work, email retention and destruction (Rogers 2000, p. 3 and 6). These policies should apply fairly and consistently to reduce employee hostility and suspicion regarding the policy as well as reduce the potential for employees to feel they are being discriminated against (Rogers 2000, p. 6). Finally, even though employers have legitimate and important reasons to monitor and even limit personal use of email at the workplace, they should consider creating a policy that allows some personal use (Rogers 2000, p. 6). As Rogers reflects, “employees may also be more compliant with usage policies if guidelines for email and the Internet include allowances for a small but realistic amount of personal use” (p.6).

Employers would do well to consider this issue from a multiple stakeholder perspective, where the interests of major constituents such as owners, managers, and employees are balanced given overall organizational objectives. A check and balance system, such as a cross functional committee, can explore the implications of a monitoring policy on each stakeholder, and propose the best ways to communicate and implement policy changes. Employee involvement in the decision-making process may reconcile employer and employee interests as well as increase employee acceptance of policy changes about employer monitoring of electronic communications.

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