ABSTRACT. This paper examines ethical, legal and economic dimensions of the decision facing employers regarding whether it is appropriate to monitor the electronic mail (e-mail) communications of its employees. We review the question of whether such monitoring is lawful. Recent e-mail monitoring cases are viewed as a progression from cases involving more established technologies (i.e., phone calls, internal memoranda, faxes and voice mail). The central focus of the paper is on the extent to which employer monitoring of employee e-mail presents a structure of costs and benefits to the employer which are unlikely to make such a practice profitable or practical to the employer. The practice of employer monitoring to detect illicit employee behavior (e.g., fraud, harassment of fellow employees, industrial espionage) is considered. It is argued that not only does such monitoring behavior fall short of the standard imposed by Kant’s categorical imperative for ethical behavior, moni- toring also fails to meet Aristotle’s ethical standard of practical wisdom. Other ethical aspects of employer monitoring are considered. This paper concerns employer monitoring of employee electronic mail (e-mail), particularly the economic and legal aspects of this issue. Harmon (1997) reports that a recent survey con- ducted by the American Management Association found that approximately fifteen percent of major companies review employees’ e-mail and computer files. In a recent essay on the subject of employee e-mail privacy, Etzioni (1997) cites other surveys which place the pro- portion of firms that monitor e-mail at greater than one-third. Employers may believe that such monitoring will prevent workers from utilizing the firm’s resources for non-firm business, and reducing the time and energies that workers are committing to the firm’s affairs. Although the widespread use of e-mail in the workplace is a recent development resulting from “new” tech- nological developments, it can be argued that employer monitoring of employee e-mail is an extension of employer monitoring of telephone calls, fax transmissions, internal memoranda, and other communications which have an established history. Legal issues A common reaction to the suggestion that employers may monitor such internal (to the firm) communications is that this is an abridge- Ethical, Legal and Economic Aspects of Employer Monitoring of Employee Electronic Mail Journal of Business Ethics 19: 99–108, 1999. © 1999 Kluwer Academic Publishers. Printed in the Netherlands. Thomas J. Hodson Fred Englander Valerie Englander Thomas J. Hodson works on flood control and deep draft navigation projects as a regional economist with the U.S. Army Corps of Engineers. He earned a Ph.D. in economics at The City University of New York and a J.D. at University of Pittsburgh, and is a member of the bar in Pennsylvania and New Jersey. His publica- tions include articles in Conservation Biology and The Journal of Forensic Science. Fred Englander is an economics professor at Fairleigh Dickinson University in Madison, NJ. He received his Ph.D. in economics from Rutgers University. His research interests include public finance, income redistri- bution programs, and economic aspects of the law. His publications include articles in the Southern Economics Journal , the Journal of Risk and Insurance, and Policy Studies Review. Valerie Englander is an economics professor at St. John’s University in Staten Island, New York. She received her Ph.D. in economics from Rutgers University. Her research interests include public finance, health economics, and program evaluation. Her publications include articles in The American Economist , The Journal of Behavioral Economics and Policy Studies Review.