Businesses today cannot afford not to have a state-of-the-art computer system with access to the Internet.  By the same token, however, businesses cannot afford to allow employees unfettered access to computer equipment and the Internet without clear company policies as to appropriate use of the equipment and, ideally, a computer user agreement signed by each employee with computer access.  In addition to the improper use of electronic equipment for non-business purposes, a business may be subject to liability and potential seizure of its equipment if used by an employee for an unlawful purpose.
A properly drafted computer user agreement should restrict employees from infringing copyrighted materials; spreading computer viruses; accessing, creating, transmitting, retrieving or storing obscene, offensive, harassing, discriminatory or defamatory materials; or disclosing trade secrets or proprietary information.

Monitoring employees’ use of computers, although necessary to ensure that the equipment is used for proper business purposes, can subject the employer to liability to the employee.  Under Federal law, an employee has a reasonable expectation of privacy, which may be invaded by an employer.  Hence, an employer may be subject to liability even if the employee was engaged in certain improper activities.

The reasonable expectation of privacy depends on facts, such as whether the equipment used was owned exclusively by the company and not by the employee, whether access to the Internet was provided to the employee by the employer and not by a third party and whether the company placed clear limits on the appropriate use of the computer system by employees.  A specific consent exception under Federal law allows the employer to avoid a charge of improper interception of electronic communications; although there may be implied consent under certain circumstances, an agreement signed by the employee is the best way to demonstrate that such consent is given.
A serious potential problem that I have seen in my practice is the use of company electronic equipment for distribution of unlawful materials, such as child pornography.  Law enforcement officials have taken aggressive action, including potential seizure of a company’s computer hardware and software, when there is evidence of crimes involving child pornography on the system.
In the computer age, employers must take care to set forth clearly stated policies for appropriate use of equipment and encourage proper business use only.  Violations of policy, the absence of specific consent to monitor and the failure to communicate policies to employees could subject an employer to liability not only to third parties but to employees, and result in seizure of a company’s computer system.