When a supervisor at one of WearGuard-Crest’s two U.S. call centers asked an employee why she had been e-mailing computer games back and forth with several friends, on company time while using a company computer, a funny thing happened.

The employee apologized and said that she knew she had violated procedures and wouldn’t do it again.

“And our experience has been that it rarely happens again,” says Barbara Piepenbrink, WearGuard-Crest’s director of sales and customer service. “We’ve had to take necessary action against employees who have done things like that, but it has never resulted in termination. I can’t remember it happening more than once or twice in the last 12 to 18 months.”

That’s what makes it so unusual. Dozens of major American companies, including Compaq, the New York Times Co., and Dow Chemical, have fired hundreds of workers over the past couple of years because they have improperly used the telephone, e-mail, and the Internet while at work. But that sort of thing doesn’t seem to be happening in the direct-to-customer fulfillment business.

“I think that’s because we use every opportunity to show the employee we trust them to do the right thing,” says John Whitlow, vice president of human resources at home and garden products retailer Plow & Hearth, which has 450 employees. “That’s what we try to make part of our culture here.”

This doesn’t mean that many fulfillment businesses don’t have the capability to monitor their employees’ e-mail, telephone calls, and Web surfing, because they do. The technology is basic to any phone or computer system, and employers have a legal right to police their workers, based on state and federal statutes that have been well-tested in the courts. But it may not always be a good idea to do it, says Rita Risser, a lawyer/management consultant in Santa Cruz, CA. “What everyone forgets is the power of deterrence,” says Risser, who specializes in preventing employee lawsuits. “In the long run, it’s far more effective, it’s less expensive, and in many ways it’s easier.”

Peeping Toms

Electronic Surveillance Activities 2000 1999 1998 1997
Monitoring Internet connections 54.1 n/a n/a n/a Percentage of Companies
Telephone use (time spent, numbers called) 44.0 38.6 40.2 34.4
Storage and review of e-mail messages 38.1 27.0 20.2 14.9
Video surveillance for security purposes 35.3 32.8 32.7 33.7
Storage and review of computer files 30.8 21.4 19.6 13.7
Computer use (time logged on, etc.) 19.4 15.2 15.9 16.1
Video recording of employee job performance 14.6 16.1 15.6 15.7
Recording and review of telephone conversations 11.5 10.6 11.2 10.4
Storage and review of voice-mail messages 6.8 5.8 5.3 5.3
Total of all forms of electronic monitoring 67.3 67.1 63.4
Including Internet monitoring 78.4
Excluding Internet monitoring 73.4
Source: American Management Association, 2000
Note: Based on a survey of 2,133 human resource managers

Legal limit

One of the ironies of this situation is that an industry that hires predominantly entry-level, low-wage employees seems to have fewer problems with this kind of abuse than industries with higher-paid, more skilled workers. But, says Piepenbrink, that might not be so ironic at all.

“Since they are entry level, they are more heavily managed and monitored,” she explains. “We probably spend much more time supervising an entry-level person than other companies do, as they don’t have the numbers of entry-level employees we do.”

So what other companies do is monitor. According to results from the American Management Association’s most recent survey, almost three-quarters of U.S. firms said they kept track of their employees’ communications and activities on the job in 2000. That figure was double that of 1997; meanwhile, one in five companies said it had dismissed employees for misusing phones, e-mail, and the Internet, be it downloading pornography, sending offensive e-mails, or frittering away company time at sports, auction, and instant message sites (see table on page 116).

“What employers and employees need to remember is that most states are still employment-at-will states,” says Ginny Bain, a labor and employment attorney with Smith, Helms, Mulliss & Moore in Greensboro, N.C. “That means they can be fired for pretty much anything, as long as it’s not on the basis of race, religion, or sex.”

Also bolstering employers’ hands is the 1986 federal Electronic Communications Privacy Act, which spells out what companies can and cannot do. The law protects employees against some intrusion, but specifically allows employers to monitor the transmission and storage of electronic communications for business-related reasons.

“The watchword in this area is ‘it depends,’” says Jeff Pasek, the labor and employment chair for the Philadelphia law firm of Cozen and O’Connor. “The general principle is that employers can monitor, given that they’ve provided sufficient notice of intent, and in some cases obtained explicit or implicit consent.”

Interestingly, many employee surveys, such as a 1999 study from the Society for Human Resource Management, show that employees understand what’s happening, even if they don’t always like it. The human resources group found that almost two-thirds of job seekers agreed that employers should have the right to monitor their Web use. The key for companies is to find ways to build on that goodwill.

By the book

First and foremost, say labor attorneys, create a written policy. A written policy not only takes care of the legal obligations, but lets good employees know it’s not being done just so the company can be a pain in the neck. The written policy should include why the company monitors and what actions are prohibited, such as visiting adult Web sites, calling 900 numbers, sending offensive e-mails, and making excessive personal phone calls. Include the penalties for violating the policies. Risser suggests a warning-probation-termination approach, in which employees get a chance to correct their behavior.

Pink Slips

Misuse or personaluse of:
Penalties Telephone E-mail Internet
Any disciplinary action 58.5 44.8 41.9 Percentage of Companies
Dismissal 11.3 16.0 17.4
Formal reprimand or warning 22.1 29.6 26.1
Informal reprimand or warning 35.5 22.3 19.7
Source: American Management Assoc., 2000 Note: Based on a survey of 2,133 human resource managers

“It’s incumbent on the company to find a policy that is fair to the employee yet protects the interests of the company,” says David Hutton, the general counsel for Cabela’s, an outdoor gear catalog company. “We have to be sensitive to everyone’s needs.”

Second, get the employee’s consent. When employees are hired, have them sign a form saying they’ve read the policies and are aware of them. Several lawyers point out that it isn’t even necessary, legally, for the employee to sign; it’s usually enough that the company gave the person the opportunity to do it (unless monitoring is part of a union contract, in which case it’s generally an issue for collective bargaining, says Pasek).

WearGuard-Crest and Cabela’s, for example, include their monitoring policies in the employee handbook, and that’s usually more than sufficient to satisfy any legal requirements. At Plow & Hearth, the company instituted a formal e-mail policy 18 months ago, and made sure everyone in the company got a copy of it. The policy outlined guidelines for use, as well as e-mail etiquette. Whitlow says one of Plow & Hearth’s biggest concerns was not so much obscene, sexist, or racist e-mail as it was making sure all employees knew what was appropriate e-mail behavior — when to use it, what to include, and when talking to someone face-to-face was better.

Third, obey the law. Monitoring is not all-inclusive, and varies depending on what’s being monitored and where the company is monitoring. Georgia, for example, requires employers to get a license from the state utility commission to listen to phone calls, while in California, all they need to do is notify employees that they’re listening.

Federal case law, meanwhile, forbids video surveillance in areas in which employees have what the law calls an “expectation of privacy.” Employers can use cameras anywhere on the premises except where employees have that expectation of privacy. This means cameras in restrooms and locker rooms are out, but cameras in lobbies, yards, call centers, and warehouses are OK. Some places, such as basements that no one ever uses, may be in some sort of legal gray area.

That’s why, if employers outline a camera policy, they’re likely to stay one step ahead of legal problems. Also, the courts have ruled that if employees see cameras in permissible places, they can’t object later that no one told them the cameras were there. So make sure that the cameras are in plain sight.

Surf city

Yet another irony surrounds e-mail and Internet use. The federal electronics law was written long before e-mail and the Web were common, and was actually developed in response to computer hacking. That means it is broad, and can be interpreted in a number of ways. So far, the courts have held that as long as the employer pays for the system, the employer has a right to monitor it. In fact, companies have even been held liable for not monitoring employee use of communications systems, especially in some key sexual harassment cases. In those decisions, an employee’s e-mail was used to show the kind of climate that existed in the workplace.

“Most of this body of law was developed to protect privacy and employee’s rights,” says Pasek, “and was written for the workplace of the mid-twentieth century. So the legal doctrines are just now starting to play catch-up.”

Software has already caught up. Technology has made it possible to block or limit employee abuses in a variety of surprisingly unobtrusive ways. As a general rule, most telephone and computer systems have the capabilities either built in or easily added with third-party software. Cabela’s systems, for example, have the technology to flag certain key words that should not appear in company e-mails, like “cocaine,” while Plow & Hearth can get a report from the company that runs its server, 1-800-FLOWERS, tracking employee Internet use.

“But we just don’t randomly monitor,” says Hutton of Cabela’s. “Our policy is just not to do it. Our policy is to trust our employees, and to draw the line and let our people have their privacy.”

Technology can let employers do that as well. Websense, developed by a San Diego company and used by 200 of the Fortune 500 companies, allows employers not only to block certain sites, but also to limit access by time of day. That way, an employee who wants to check stock quotes at lunchtime can do so without incurring the boss’s wrath. Tapit, from New Jersey’s Trisys, enables employers to monitor telephone use — who has called out, who has called in, which extensions have been used, how long the calls lasted — without actually listening in.

Trust fund

Although it is easy and effective, spying is not always the best course to take. “What you need to remember is that monitoring is more about management than anything else,” says Risser. “You need to do as good a job managing telephone, e-mail, and Web use as you do everything else. If you do, you won’t have any problems.”

That’s something Plow & Hearth’s Whitlow appreciates. “Monitoring has never been a big issue here,” he says. “In our culture, we have a high level of trust, and we don’t like to do something unless it’s absolutely necessary. One of our goals is not to micromanage.”

In fact, talk to any number of people in operations and fulfillment, and they’ll say that the idea of monitoring, even though legally acceptable, is not always managerially palatable. There are a variety of reasons for this, they say, and each revolves around the idea of improving employer-employee relations and not treating the employee as the enemy.

Piepenbrink reports that when WearGuard-Crest, which sells work clothing and uniforms, decided to add Internet access to computers at its Virginia call centers so that reps could track packages and chat live with customers, the first reaction from front-line supervisors was far from favorable. They were convinced that employees would be surfing the Web on company time at the first opportunity. “That’s where it becomes a management issue,” says Piepenbrink. “I’m sure we could have added firewalls and passwords, but what’s the point of going to all that trouble? It’s up to the managers to deal with the issue.”

Savvy employers also understand the role of peer pressure. Many call centers are organized into teams, where each member of the team is responsible for the entire group’s performance. This makes it even less likely that employees will waste time, since their colleagues will be keeping an eye on them — and will have a financial incentive to do so.

Finally, the mindset may very well be unique at these kinds of companies, many of which are still regional (and even local), and where even the largest are still not as large as many of the behemoths of American industry.

“I’m convinced the catalog industry is different,” says Whitlow. “Many catalogs grew up as a family business, and are still very entrepreneurial. Even the people we hire in the call centers are people we know, that you’ll see around town or in the grocery store, so there is more trust there. You’re not going to want to do something when everyone in town will know about it. That’s why I just don’t think monitoring is widespread in the industry, especially among niche catalogs.” And if the trust system works, then it’s the best system in the world.

Jeff Siegel’s articles about business and marketing issues have appeared in Forbes, American Way, Emerging Business, and a variety of other consumer and trade magazines. He lives in Dallas.

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.