The Los Angeles Times reported on June 19, 2008, that the Ninth Circuit’s decision in Quon v. Arch Wireless Operating Co., “sharply limited the ability of employers to obtain e-mails and text messages sent by employees on company-financed accounts.” And many major news outlets echoed this sentiment: "Court Rules Employee Text Messages Are Private," "SF Court Protects Privacy of Work Communications," "Stop Snooping on Email, Court Tells Some Nosy Bosses." However, the assertion of the LA Times reporter, while literally true, is pure hyperbole when viewed in the context of a real-world workplace.

The Ninth Circuit ruled in Quon that a text-message provider, Arch Wireless, violated the federal Stored Communications Act (the “Act”) by disclosing to the City of Ontario Police Department sexually explicit text messages sent by Sgt. Quon using a City-issued text-message pager, even though the City was the subscriber on the service contract. The court explained that the Act prohibits providers of an “electronic communication service” — Internet Service Providers (ISPs) and text messages services, for example — from disclosing stored e-mail or text messages without the consent of the sender or recipient. At first blush, this ruling appears to present a dramatic shift in the balance of power between employers and employees in the spy vs. spy world of workplace monitoring.

Not so fast: Employers can easily and lawfully circumvent the court’s ruling. Employers, for example, can prohibit employees from conducting any company business other than over the corporate network, and they can limit company-issued electronic devices to those, such as a Blackberry, that can be configured to route all communications through the corporate network. Notably, the Ninth Circuit’s decision expressly reaffirmed the well established rule that employers can defeat an employee’s expectation of privacy by distributing a policy unambiguously stating that employees communications using corporate resources will be monitored and are not private.

Of course, many employers in today’s world do provide cell phones with text-message capability. That does not mean that employees now can text with impunity. The Ninth Circuit’s decision addresses only access to the content of text messages stored at the provider. The decision imposes no limit on an employer’s obtaining transactional data, such as number of characters used, number of messages sent, or cost of service.

In any event, employers who think they may want to review their employees’ text messages need only condition payment for the cell phone, or for the service, on the employee’s giving written consent to the provider to disclose text messages to the employer; employees who don’t give consent and wish to keep their text messages private would have to pay for the service out of their own pocket. How many employees will be willing to pay $100 or more monthly to be able to send dirty text messages (especially with gas at $4 per gallon)?

There is yet another solution for employers. The Ninth Circuit’s ruling imposes no restriction on an employer’s review of text messages stored on company-issued cell phones. As long as the employer’s electronic resources policy notifies employees that text messages will be searched, the Ninth Circuit’s ruling actually can be used to defeat any privacy-based claim by an employee based upon such a review. In addition, as computer forensic capabilities improve and cell phone memory chips expand, these types of cell phone examinations could easily become routine.

The case is a cautionary tale on another point. The Ninth Circuit also addressed the question whether the City violated Sgt. Quon’s privacy expectations by reviewing his text messages after receiving them from Arch Wireless. On this point, the court noted (as I mentioned above) that in the normal course, the City’s “Computer Use, Internet and E-Mail Policy” would have defeated Sgt. Quon’s privacy-based claim. However, the police lieutenant responsible for overseeing the City’s text-message program had established an informal policy, communicated orally to Sgt. Quon, that the City would not read an officer’s text messages to determine whether they were personal or business-related so long as the officer paid for any over charges. The Ninth Circuit ruled that Sgt. Quon reasonably relied on this informal policy when he sent personal text messages using his City-issued pager, believing that the messages would remain private. Even though the City is a public employer, this holding is most likely is transferable to the private workplace.

Bottom line #1: Employers first need to evaluate whether reviewing messages stored with a service provider is in the employer’s interest. Corporate culture or potential employee rebellion potentially are significant countervailing factors. If the interest is strong enough, then the employer can execute any of the strategies described above to meet those objectives.

Bottom line #2: Instruct your IT personnel and others responsible for workplace monitoring not to make representations to employees that your business’ electronic resources policy will not be followed. Consider modifying your electronic resources policy to state that it can not be modified except by a written communication by a senior executive.

For further analysis of the Quon case, please see Littler ASAP: Employee Text Messages Are Not Inviolate: Understanding and Navigating the Ninth Circuit's Decision in Quon v. Arch Wireless Operating Company by Philip L. Gordon and Justin A. Morello.