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In 1986, Congress passed the Electronic Communications Privacy Act (ECPA), which basically gave employers the right to monitor electronic communications "in the ordinary course of business." Now the million dollar question is: "What is defined as "ordinary course of business?" ...
Most companies view your office computer and their network infrastructure as property of the employer and I think they have a solid argument for such. Furthermore, the time they are paying you is their time, too. In terms of email monitoring, a recent survey of more than 700 companies by the Society for Human Resource Management (SHRM) found that almost three quarters of the surveyed companies monitor their workers' use of the Internet and check employee email ...
Monitoring is not just limited to Internet and email. Your employer, for the most part, has every right to monitor voice mail and phone calls, too.