Employees won't sue you for snooping in their e-mail if you make it clear (early and often) that it's not their e-mail. It's your property, and you hold the right to monitor it as you wish.
Your comprehensive electronic communications policy should explain that the organization owns all computer equipment, software and electronic communication. Erase any expectation of privacy by requiring employees to sign an acknowledgment form that gives you the authority to review all electronic communication, including instant messaging.
Another option: When employees log in each morning, have a message appear on their computer screens about your monitoring policy. Employees must click "Yes" before continuing.
Recent case: Richard Fraser worked as an independent agent selling insurance for Nationwide. When Nationwide suspected that Fraser was sharing confidential information with competitors in violation of a written agreement, the company searched its main file server. It found two e-mail messages that confirmed Fraser's disloyalty, and Nation-wide terminated him immediately.
He sued, alleging that the company's search violated the Electronic Communications Privacy Act. A district court threw out his lawsuit, and a federal appeals court agreed.
Two reasons: While the law prohibits interception of e-mail, the company didn't intercept Fraser's e-mails; it reviewed them after their transmission. Plus, the law includes an exception that allows seizures made by the communication system "provider." And, clearly, Nationwide was the provider of the e-mail system. (Fraser v. Nationwide Mutual Insurance Co., No. 01-2921, 3rd Cir., 2003)