LEE HOCHBERG: It's second nature for Bill McLaren to sit down at work and boot up his computer. It used to be second nature for him to send e-mails on it. But not anymore. He got fired after his last employer saw some of his mail.
BILL McLAREN: I was shocked and hurt. There were obviously some things in there that weren't meant for what I consider to be public eyes... and I was under the impression that I was the only person that could open that file and be able to get to that information
LEE HOCHBERG: McLaren was working as a computer programmer for a software maker in Dallas Texas. He says he saved some off-color e-mails in his computer, and protected them with his private password.
BILL McLAREN: I actually created something that was referred as a personal folder, and last time I checked Webster's, personal meant personal...since I was the only person who knew the password, I therefore had a pretty good expectation of privacy and assumed that they were secure.
LEE HOCHBERG: But his supervisor opened those e-mails as part of an investigation into sexual harassment, and fired McLaren. McLaren went to court, arguing e-mails locked in his employee computer are private--just like items he locks in his employee locker.
BILL McLAREN: If I have a locker assigned to me at work, and I go down to the local department store and buy a lock and set the combination and put it on my lock at work, I'm the only person who can get into that locker. There's not much difference, and we're trying to make the same analogy on computer systems...if I'm the person that set that password, and I'm the only person that can change it, therefore, I'm the only person that should be able to read that document.
LEE HOCHBERG: Texas courts rejected his argument. Courts in other states have ruled the 83 million Americans who send more than one-trillion workplace e-mails a year, have no right to e-mail privacy either. Employment attorney Phil Clements.
PHIL CLEMENTS: Anytime you're talking about the privacy of an employee, you have to weigh it against the business needs of the employer. And the courts, typically, have been more sensitive to the business needs of the employer so far.
LEE HOCHBERG: About one-third of American companies say they read employee e-mail. Clements says they need to, to keep workers from distributing proprietary information, or sending harassing messages. In 1995, the Chevron Corporation had to pay $2.2 million in a sexual harassment suit, after an employee distributed an e-mail listing "25 Reasons Beer is Better than Women."
SPOKESMAN: Microsoft Sr. Vice President sends an e-mail outlining the additional steps needed to eliminate the Netscape threat....now you sign on according to…
LEE HOCHBERG: The e-mail of managers themselves has caused companies trouble. In the Microsoft anti-trust trial, federal prosecutors submitted as evidence Bill Gates' e-mail, which threatened to "slaughter" competitors.
LEE HOCHBERG: There's a "shoot-from-the hip" style of language in much e-mail-- that helps make it such an effective communication tool... but also makes it so damaging in court.
SPOKESMAN: It's changed everything about the way we do business when we're litigating cases... we're able to find communications that were normally private communications; the kind of communications that two people would have spoken about, now people communicate by e-mail. And so we're able to prove what they were saying, and what they were thinking.
LEE HOCHBERG: Lawyers hire computer sleuths, like Joan Feldman of Seattle based-Computer Forensics, to track down damaging e-mail. Feldman and her team of computer-age detectives have a booming business, earning up to $400/hour. They go into workplaces, sometimes after midnight, to suck e-mail out of employee computers...mail that employees often think they've erased.
JOAN FELDMAN: About 50 percent of the population doesn't even understand that if they've moved something to their delete folder, they then have to empty the delete folder to get rid of it thoroughly.
LEE HOCHBERG: Otherwise, the e-mail's still there?
JOAN FELDMAN: It's still there. In many cases, a delete folder could be called the 'museum of historical e-mail,' because if people aren't purging it, it's just sitting there.
LEE HOCHBERG: Feldman can find mail even if employees do purge it. It may be inside the computer of the Internet service provider that delivered it, or that of the e-mail recipient. Or it might be inside the employee's building, in the company's master e-mail system. Some systems even run duplicate tapes of e-mail.
JOAN FELDMAN: Those backup tapes can hang around for a long time. Some companies never get rid of them; they just keep them; they just stockpile them. So in one case, we looked at ten years' worth of e-mail...this stuff's pernicious; it just sticks around.
LEE HOCHBERG: Some companies are trying to keep it from being written in the first place. They've installed new software that immediately alerts managers when worker e-mail contains problematic words, like "stolen" or sex." And this man has written a program that goes one step further.
RICHARD EATON: Let's say I'm an employee, and I'm working at my computer...the boss later that day or the next day...he'll pull up his report program, and he'll be able to see exactly what I had just typed.
LEE HOCHBERG: Richard Eaton's "Investigator" software covertly records every key an employee touches, and then tells the boss.
RICHARD EATON: So it'll know if you're playing solitaire; it'll know what Web site you're at.; it'll know the names of documents you had open; it'll know everything that you typed.
LEE HOCHBERG: Every single key stroke?
RICHARD EATON: Every single key stroke. In fact, if you try to delete the keys out and back space over them, it has a facility to unwork that...so you can't delete what you were typing and get away with it.
LEE HOCHBERG: Eaton says he's sold 5,000 programs since August of 1998, to customers like Delta Airlines, Exxon, the U.S. State Department and the U.S. Mint. While some workers get a warning on their screen that they're being watched, he says most employers prefer the program run covertly.
LEE HOCHBERG: From an employee privacy point of view, is this not kind of creepy?
RICHARD EATON: Well, you're assuming that an employee has an expectation of privacy in the workplace. Do they? You're in the workplace environment. You should expect that what you're doing there, you'll be watched...you really have no expectation of privacy.
LEE HOCHBERG: The government is getting involved in the issue. In California, lawmakers are trying to help employees regain some privacy. State Senator Debra Bowen's bill would have charged managers with a misdemeanor, if they monitor e-mail without first warning employees.
STATE SENATOR DEBRA BOWEN: Employers ought to be telling the people who work for them what the policy is and that their e-mail is not private.
LEE HOCHBERG: The bill passed the California legislature by a huge majority. But Governor Gray Davis vetoed it. The governor, whose own office scrutinizes its employees' e-mail, said the bill "would place unnecessary and complicating obligations on employers." Staff Director Vince Hall.
VINCE HALL: This could result in lawsuits against employers because either the employers did not know that they were required by state law to provide such notification or that the employee is contesting the validity of the type of notification that the employer offered.
LEE HOCHBERG: The Governor's office believes any boss who provides employees with equipment has the right to monitor it.
VINCE HALL: If an employer purchases a computer, hires an employee, provides Internet connectivity, the employer has a right to supervise exactly what it is that the employee is doing with that technology.
LEE HOCHBERG: Bowen says that argument doesn't wash.
STATE SENATOR DEBRA BOWEN: The employer provides a bathroom - but the employer does not have a right to monitor you or videotape you in the bathroom... the employer pays for telephones and pays the telephone bill -- but under federal law - an employer may not tape or monitor an employee's personal telephone conversations...there is no law on computer usage but I think it should be the same.
LEE HOCHBERG: It's not just private individuals with e-mail concerns. In Boston, public officials are fighting for their own e-mail privacy. The city is undergoing an $11-billion downtown redevelopment, the most massive public works project in the US. As part of her coverage of the story, reporter Linda Rosencrance of the Boston Tab newspaper requested access to the e-mails of City Council members. Editor Bob Unger.
BOB UNGER: We wanted to know whether or not there were deals being struck that the public might not know about in open session. We asked for those e-mails to see exactly what the tenor of those conversations had been.
LEE HOCHBERG: But seven city councilors, including president Jim Kelly, rejected the request...arguing e-mail is private.
JIM KELLY: I mean, Linda Rosencrance doesn't have any more right to that kind of information than to come in and start looking through my desk drawers...it's none of Linda Rosencrance's business. If she wants to find out what someone sent to me- then go find out who sent it to me and ask them for copies. Don't ask me to give her copies of what someone sent to me. I'm not going to do it.
LEE HOCHBERG: The Massachusetts Supervisor of Public Records ruled virtually all e-mail sent or received by a government employee is public record. But Council president Kelly refuses to turn his over, and vows to fight it out in court. Editor Unger says a precedent needs to be made clear.
BOB UNGER: We're going to create a whole class of government existing in a subterranean level, which would be dangerous.
LEE HOCHBERG: As public and private employers debate e-mail rules, programmers may have a software solution. New programs encrypt e-mail messages with a digital key, so they're only readable for a short time. But the technology is unwieldy. For now, when your computer says, "you've got mail", you may have privacy concerns as well.