You Spy, They Spy, Everybody Spies

By SmallBusinessComputing Staff | Posted September 01, 2001
by William C. Gillis

IT'S NOT 1984, but in the workplace most businesses now play Big Brother. A recent study by the American Management Association (AMA) found that more than 77 percent of major American firms monitor employees' e-mail, Internet, or telephone use, up from 35 percent in 1997.

Why are businesses monitoring? Lost productivity is the most obvious reason. According to the IDC, 40 to 50 percent of Internet use at work is personal. And the AMA found that such surfing costs U.S. businesses more than $200 million a year.

Another serious issue is legal liability. According to Robert A. Curtis, an attorney specializing in Internet law with Santa
Barbara, Calif.-based Foley and Bezek LLP, a company could face a harassment suit from an employee if other workers are accessing pornographic or racist sites. He explains that businesses that monitor but don't do it thoroughly might be putting themselves at more risk than businesses that don't monitor at all. "When an employer monitors, it's more likely that the company will be deemed to have knowledge of harassment," Curtis says. "If a company monitors its employees, it should act right away on a potential harassment situation."

Small businesses face the same liability issues as large businesses. For instance, small businesses make up 80 percent of the customers of Cerberian Inc., a Salt Lake City, Utah-based company that offers Web-based Internet filtering services for
businesses, according to Scott Nelson, the company's chief marketing officer. He says liability is the primary concern of many of these customers. "I don't see [liability] issues being any different for large or small businesses," he says.

Monitoring may have drawbacks that outweigh the benefits. Deborah Pierce, a privacy attorney with the Electronic Frontier Foundation, warns that employers can easily alienate their employees if they monitor. "Trust is huge," Pierce says. "If you create an atmosphere where people feel they are constantly being monitored, that's not going to motivate people."

Both Pierce and Curtis agree that a company should inform employees, in precise terms, what its monitoring policy is. "It's very important that employees know where they stand from the very beginning," Pierce says.

Experts expect electronic monitoring to become even more common. According to the International Data Corporation (IDC), an information-technology data and research firm, spending on monitoring software is growing 53 percent annually. But while protection from lost productivity and legal liability is paramount for any company, keeping employees motivated and informed might be equally vital to success.

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