That e-mail you just sent could be used against you in court.
Yes, e-mail, for years the medium of casual workplace conversation, has now become a central form of documentary evidence during a year packed with court cases and congressional hearings about alleged corporate malfeasance.
As workers at Merrill Lynch, Enron, Arthur Andersen, Credit Suisse First Boston and other major companies can attest, even a brief, off-the-cuff message can have serious legal and financial consequences.
And while workers getting in hot water for e-mail indiscretions has been a familiar saga for years, increasingly, they are getting their companies in trouble, too. Given the striking disparity between the spontaneity of these e-mails and their long-term impact, companies from Wall Street to Silicon Valley are stiffening their e-mail policies and stepping up their efforts to monitor employees' message habits. And many firms have begun offering programs to monitor workplace use of e-mail's even more slippery cousin, instant messaging, or IM.
"E-mail is playing a bigger role in the corporate world right now," says Deborah Fallows, a senior research fellow at the Pew Internet & American Life Project in Washington, D.C. "And companies are saying, 'This can't be as freewheeling as it was.'"
‘Piece of Junk’ Becomes Piece of Evidence
The first high-profile court case in which e-mail provided crucial evidence was the Justice Department's antitrust lawsuit against Microsoft in the late 1990s. As part of the government's claim that Microsoft sought to hinder the use of Sun Microsystems' Java programming language, it introduced Microsoft e-mails into the court as evidence, including one from Microsoft Chairman Bill Gates saying that Java "scares the hell out of me."
But Exhibit A in the minds of many corporate managers and workers may be the case this year involving Merrill Lynch and its former star analyst of Internet companies, Henry Blodget. In October 2000, Blodget sent an offhand e-mail to a colleague dismissing the stock of Infospace, which he was recommending at the time, as a "piece of junk."
Rather than disappearing into the ether, however, the message became public after a subpoena by New York Attorney General Eliot Spitzer. According to Spitzer, Merrill Lynch was deceiving investors by touting certain stocks in order to gain investment banking business.
Confronted with seemingly damning e-mails from Blodget and other company employees, Merrill Lynch ended up admitting no wrongdoing in the case, but paid a $100 million fine and agreed to change its research practices. A spokesperson for Merrill Lynch declined to describe the company's current e-mail policies.
Similar e-mail troubles face Credit Suisse First Boston, currently under investigation by Massachusetts regulators, who are said to have collected 400,000 e-mails in their probe of the finance firm.
In one e-mail described in published accounts, an analyst referred to a technique called the "Agilent Two-Step," a practice in which a stock was rated more highly than it deserved in order to avoid losing other business for the firm.
Under such pressures, others on Wall Street are attempting to regulate their electronic communications. Financial firm Bear, Stearns announced this summer, for instance, it will monitor all e-mail correspondence between the firm's research and investment banking departments, in an attempt to ensure that the "Chinese Wall" between the divisions remains intact.
More Oversight Might Mean Less Productivity
Still, some observers wonder if efforts to regulate e-mail use in the office might inhibit employees from working productively.
"E-mail is facilitated with a certain informality, which is useful in every workplace," says Lee Tien, a senior lawyer at the Electronic Frontier Foundation in San Francisco. "It's a second channel of communication … that is much less bureaucratic."
Still, noting that virtually every e-mail message may potentially be stored or retrieved, he acknowledges: "It has risks."
And the hazards of sending e-mail involve not just firms but individuals workers. Farfetched as it might seem, the e-mail conversations workers partake in could form evidence against them in court — at times when they may be on their own when it comes to finding legal help.
That's the situation former Arthur Andersen partner David Duncan faced this year, when the government's obstruction-of-justice case hinged on an e-mail about the firm's document-retention policy sent by Andersen lawyer Nancy Temple. Duncan, in charge of Andersen's Enron audit, was cast adrift by Andersen in January, and ended up striking a plea deal with prosecutors.
That possibility, says Tien, should be a central part of any firm's document-handling policy.
"They need to have all employees … made aware that there is this legal risk," says Tien. "If you are a high vice president, you may be clear that your interests are not protected by the corporation — but it's not so clear to mid-level employees that they may not be protected."
Tien says companies should make that possibility clear when they outline e-mail policies. Additionally, he says, all companies should enter the e-mail age and "actually have a document retention and destruction policy that extends to the electronic realm."
Can Workers Change Their Habits?
All of these concerns can create new headaches for firms still trying to make sure their employees are not simply wasting time on e-mail or running afoul of Internet decency policies — which remains a hot-button issue at many companies.
A few months back, Hewlett-Packard Compaq disciplined 150 workers in Britain, firing some for what the technology firm called the "viewing and sharing of unauthorized and inappropriate material." All told, about 25 percent of U.S. firms have gotten rid of workers for similar reasons, according to a recent survey by Internet filtering firm Websense and the online journal PersonnelToday.com.
"What I think we're seeing, partly because of these kinds of legal cases, and partly because of the huge increase in volume in e-mail, is that companies are taking a more serious look at e-mail for a whole bunch of reasons," says Fallows.
Then there are a range of similar issues involving the rapidly growing use of instant messaging, which many workers treat even less formally than e-mail, and which is not normally stored on company servers — but which can monitored and intercepted.
For instance, companies are frequently worried that proprietary information will be leaked via IM use, according to Kasey Sellati of SpectorSoft in Florida, which makes software monitoring instant messaging. She says many firms approaching SpectorSoft come from "industries where people move to their competitors."
Overall, the monitoring of instant messaging, says Sellati, "is just taking off. This is the next step as far as [companies] realizing they need a record of what's going on."
But even if employees know they are being monitored, can they change their habits and treat e-mail or instant messaging with the same formality they might use for a formal memo or serious company meeting?
Fallows, who is preparing a large-scale study about the use of e-mail in the workplace, thinks so: "More people are pausing for a second and saying, 'Oh, I better take out that sentence.'"
But for Blodget and others, it's already a little too late for that.