The Electronic Communications Privacy Act
The Electronic Communications Privacy Act of 1986, an amendment to Title III of the Omnibus Crime Control and Safe Streets Act of 1968, is commonly known as the "wiretap law." The ECPA was adopted initially to govern third-party interceptions of electronic communications, not to govern employers' rights to monitor their workers.
It applies to service providers and what information they can turn over to third parties as well as what information can be monitored and how in the workplace.
The ECPA provides civil and criminal penalties for any person who intentionally intercepts, uses, or discloses "any wire, oral, or electronic communication." The term "electronic communication" is defined as "any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photo-electronic or photo optical system that affects interstate or foreign commerce." The ECPA also affords recourse for the use or recitations of information obtained from an intercepted electronic communication.
The two prime exceptions to the ECPA afford employers broad rights to monitor their employees: An employer may monitor an employee's conversations if the monitoring occurs in the ordinary course of business or with the employee's implied consent.
Most of the cases developed under the ECPA involve criminal justice and investigatory wiretaps of telephone and e-mail communications. Until recently, most of the case law in the civil application of the ECPA involved monitoring telephone communication.
The ECPA also contains a "business exclusion exemption" that exempts interceptions made by equipment "furnished to the subscriber or user by [a communications carrier] in the ordinary course of its business [and being used by the subscriber or user] in the ordinary course of its business." Under this exception, an employer may monitor phone calls made on an employer-supplied telephone system by attaching a device supplied by the employer. The courts look to whether a reasonable business justification exists for the monitoring, whether the employee was informed about the employer's right to monitor, and whether the employer acted consistently in connection therewith.
Note that even if you comply with the ECPA, there are state and federal wiretapping laws, constitutional provisions and common law rights. And if the workplace is unionized, monitoring of employees is a collective bargaining issue, according to the NLRB. It's just the first hurdle in the monitoring and surveillance compliance road.