In the past few years the Internet has grown almost at the speed of light, and it has rapidly
become deeply embedded in our business and personal lives. However, corporate managements
have been slow to realize that their employees are using their corporate facilities to surf the Net
and to use e-mail for personal reasons, and such personal use can be disruptive and costly.
Companies are now beginning to face the problem, which in turn has raised serious ethical
issues. Is it ethical for employees to use Net at work for personal purposes, as they often were
accustomed to doing with the telephone? Are employers obligated to bear the costs of the private
use of their facilities by their employees? Is it ethical for employers to monitor private activities
of employees as long as those employees are meeting their work goals? Let us begin by looking
at the many ways employees are using the Net at work and the potential costs to the employers.
Finally we will examine the ways corporations are addressing the problem.
When employers first became aware of employees using the Internet for personal purposes,
the major concern was that employees would visit pornography sites that might offend other
employees, perhaps even leading to lawsuits. Then concern grew over too many visits to sport
sites and retail outlets. However, it has turned out that the problem is far larger than a little bit of
time on a few sites. A number of studies have concluded that at least 25 percent of employee on-
line time is spent on non-work related surfing. Moreover, investment monitoring and trading has
now become the most popular non-work-related Web activity performed by employees on the
job, and these visits are apparently mushrooming.
New technology, particularly Web technology making it easy for people not only to trade,
but also to research and monitor their own investments much as professionals have always done.
While many people are driven by hopes for the future, others are coming to view active
investment activity as a way to generate immediate supplementary income. The excitement has
continued to climb along with the market.
inexpensive business and personal communications. Hundreds of millions of people are now
connected to each other by e-mail, and the growth shows no sign of slowing. Not surprisingly the
use of e-mail for personal reasons at the workplace has also grown. Managements fear that racist,
sexually explicit, or other potentially offensive material might create problems in the workplace
and could even result in adverse publicity and harassment lawsuits brought by workers.
Companies also fear the loss of trade secrets through e-mail. Personal use of e-mail can even
clog the company's network so that the business work cannot be carried out.. At Lockheed
Martin Corp. an employee sent an e-mail message concerning an upcoming religious holiday to
all of the company's 150,000 employees, locking up the entire network for six hours.
A study by the American Management Association concludes that 27 percent of large U.S.
companies are now monitoring employee e-mail in some way compared to only 15 percent in
1997. If employees are using company Internet facilities for personal reasons, how much can it
cost? The most obvious cost is the loss of time and employee productivity when employees are
focusing on personal rather than company business. Interestingly, to date the U.S. government
has been unable to measure any economic effect of such wasted time. However, others think the reason studies might not show a loss of productivity is that most people don't tell their bosses or
co-workers what they are doing since it is either against company policy or at least it is overtly
being non-productive during working hours. If you want to calculate the cost to a company,
multiply the estimated average amount employees are paid for an hour's work by the number of
hours lost for the average employee, and then multiply the results by the number of employees
involved. The number can be very large indeed.
An often-ignored but potentially critical cost is the effect personal Internet activities can have
on the availability of the company's network bandwidth. If personal traffic is too high, it will
interfere with the company's ability to carry on its business. The company may then have to
expand its bandwidth, an expensive and time-consuming activity. Only two alternatives exist.
The first is to do nothing, causing the Internet connection to slow down and productivity to fall
with it. The other alternative is to reduce the bandwidth drain by reducing or eliminating use of
the Internet for personal business. Norcross, Georgia civil-engineering firm Wolverton &
Associate Inc. installed Telemate.Net monitoring software and found that broadcast.com was the
third most visited site and consumed four percent of the company's bandwidth. Employees were
using it to download music for themselves. E*Trade, which soaked up another three percent of
Woverton's bandwidth, is just one of many online securities trading sites that employees were
visiting. Douglas Dahlberg, Wolverton's IT manager, points out that bandwidth is critical to the
company's operations because Wolverton engineers regularly send very large data-laden CAD
files to their clients through e-mail.
Too much time on personal business, Internet or not, can mean lost revenue or overcharges to
clients. Some employees may be charging time they spend trading stocks or pursuing other
personal business to clients, thus overcharging the clients.
When employees access the Web using employer facilities, anything they do on the Web,
including anything illegal, carries the company's name. Therefore, the employer can be traced
and held liable. However, even if the company is found not to be liable, responding to lawsuits
will cost the company tens of thousands of dollars at a minimum. In addition lawsuits often
result in adverse publicity for the company regardless of outcome. Even if lawsuits do not result,
companies are often embarrassed by the publicity that can surround the online actions by a
company's employees. Problems can arise not only from illegalities but also through very legal
activities such as employee participation in chat rooms society finds unacceptable. For example
employee participation in white power or anti-Semitic chat rooms can produce a public relations
nightmare.
How has the management of some companies been addressing these problems? Consultants
in this field recommend that companies begin with a written corporate policy. However, studies
show that relatively few companies have written Internet usage policies that specifically address
such problems as online investing during work.
clear, easily understood English. They should state, by position or level, which has the right to
access what and under what circumstances they may access it. Naturally the rules must be
tailored to the specific organization because different companies may need to access different Web materials as part of their businesses. For example while some companies may exclude
anyone from visiting sites that have explicit sexual material, law firm or hospital employees may
need require access, while investment firms will need to allow many of their employees access to
other investment sites.
Some companies want to ban all personal activities-zero tolerance. American Fast Freight
policy, for example, bans any online activity "not specifically and exclusively work related."
Many companies reject this zero tolerance approach because they believe they must allow
employees the ability to conduct some personal business during working hours. Bell South had
once instituted a zero tolerance policy, but it softened that policy in the summer of 1998.
Management had received many complaints from its employees, such as some that said they
were afraid to give their business e-mail address for simple things like weekend soccer club
notifications. Under Bell South's new policy, when employees log on they must read a warning
about misuse of the Internet and e-mail and then click "OK" before they are allowed to continue
In this manner employees are repeatedly reminded to limit their personal activities. Employees
also know by the warning screen that they might be monitored. Why did they soften their policy?
According to Jerry Guthrie, Bell South's ethics officer, "We work long hours-we wanted to offer
it as a benefit to employees."
Clear policy rules and guidelines can be very difficult to write. An individual act, such as a
visit to a stockbroker to execute an order, may be acceptable whereas repeated visits in order to
monitor that stock might not be. Many find it impossible to draw a clear line between what is
acceptable and what constitutes too much. For example Boeing Corp. specifically allows
employees to use the Internet, e-mail, and even fax machines for personal purposes, but the
guidelines are vague, saying the use must be of "reasonable duration and frequency." Such blurry
terms may be difficult for employees and employers to apply fairly, and yet it is even more of a
problem to achieve more precision. Some companies are even less specific, but at least they have
all made it clear that anything the employee does for personal reasons cannot be considered
private. Moreover they usually indicate that employees may be disciplined for misuse of the
company's facilities, an effective warning that employees will be monitored and will be held to a
standard.
How valuable or policies and warnings? They do warn employees and so hopefully reduce
misuse. At the same time they protect the company from any lawsuits by employees if the
company does take action. In one instance Columbia/MCAHealthcare Corp. warned employees
that "It is sometimes necessary for authorized personnel to access and monitor their contents,"
adding that "In some situations the company may be required to publicly disclose e-mail
messages, even those marked private." Some companies follow a potentially more effective
strategy, combining policies and warnings with filtering or monitoring software (discussed
below).
Education should also play a key role. Some companies require all employees to read its
policy and then give them an opportunity to clarify any questions they may have. Then they
require the employees to sign the policy. Lockheed Martin Corp., the giant aerospace company,
goes much further. It requires all of its 160,0000 employees to complete a large ethical training
course online that includes material on the proper use of the company's Internet facilities.
One approach that some companies use is to block all employee access to specific sites.
Other solutions short of total blockage also exist. Content Technologies Inc., of Kirkland
Washington, produces software that prevents employees from opening executable files. This
software allows people to visit the site but also effectively prevents them from placing orders.
Not all agree that this approach is effective, however. Epstein, Becker, and Green's Kroening
believes "They're probably just turning around and picking up the phone" to execute the trade,
and that still costs employee time. Dahlberg solved his music-downloading problem by removing
RealAudio music playing capability from all of Wolverton's systems.
Yet another approach used by many companies is to limit the Web sites employees can visit.
SurfWatch software can be used by employers to allow visits to certain sites, such as investment
sites, only during specific hours, such as during the lunch hour and before and after normal
working hours.
Many companies are turning to software packages to monitor the Internet activities of their
employees. Content Technologies produces a software package titled MailSweeper that
automatically examines outgoing e-mail messages for language that the company wants to ban or
at least to examine. Fearing uses of the Internet for other than business purposes, George Brandt,
the business manager, KBHK-TV, San Francisco, decided to use a Elron CommandView
Internet Manager to monitor employee Internet usage. This software monitors Internet usage,
records the data, and then enables managers to print detailed analyses of that usage. Managers
can determine who visits what sites, how often an individual or a group visits any specific site
and how long those visits are. At first Brandt found extensive recreational surfing. Soon
thereafter, however, once people were fully aware that they were being monitored, such usage
clearly declined, and concurrently employee productivity increased.
Some companies may use monitoring software but prefer the personal approach for dealing
with individual offenders. When David Kroening, assistant director of technology and operations
at New York law firm Epstein, Becker, and Green, PC discovers a potential offender, he notifies
the manager of the individual and asks that person to handle it. "It's more of a personal issue
[than a technical one] now," he explains. Roy Crooks, director of information technology at Bard
Manufacturing, uses monitoring software to find out who is creating a problem. Rather than turn
the solution over to the offenders' managers, he attempts to solve the problems himself by talking
with them personally.
A number of corporations are trying to limit online personal activity to an acceptable amount
of time rather than trying to shut if off completely. This policy is a natural extension of the one
many employers have followed well before the Internet when they allowed employees to take
care of personal business during working hours within limits. In the minds of many, an absolute
ban could create a situation in which employees would simply try to subvert the policy, thus
creating an even worse problem. Cellular One developed a rule-of-thumb measure of how much
time is reasonable. Employees spending more than half-an-hour on personal or recreational
browsing will likely end up on a list of potential Internet abusers. The individuals who are
judged as having abused the privilege can have their Internet access taken away. American Fast
Freight established a new policy that prohibited employees from visiting online investing sites during working hours but allows it during lunch and before and after work.
Some companies are occasionally turning to the ultimate punishment, firing employees
judged to be offenders. Some managers consider that firing sends a strong, quick message to the
remaining employees. In July, 2000 Dow Chemical fired 50 workers and disciplined 200 others
after an investigation of employee e-mail found that employees at all levels had sent
pornography and violent images from company computers. The New York Times Company fired
over 20 employees from its Norfolk, Virginia payroll center in early December 1999 for
"inappropriate and offensive" E-mails. Other employees were sent disciplinary warning letters.
An internal memo to employees explained that "While the company does not routinely monitor
the e-mail communications of employees, we do investigate when a violation of the company's e-
mail policy is reported.
No solution is problem-free. Instituting any policy can create a great deal of controversy and
may even result in lawsuits, particularly if employees have not been clearly warned about the
new policy. Oftentimes employers hear charges of unethical or improper spying from their staffs.
Even warnings do not always work. Wolverton's Dahlberg warned the company's small staff of
only 36 employees that they would be monitored before the company installed the monitoring
software. But warnings "just mustn't sink in," said Dahlberg. "I can see every little Web page you
read-and still there were problems."
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