Last week, the U.S. Ninth Circuit Court of Appeals ruled that an employer does not have the right to view employees' text messages without a warrant. The ruling is based primarily on who pays for the storage of the content. For e-mail stored on company's servers, U.S. law is quite clear that employers own the content because they pay for the storage. The Court, however, does not view text messaging in the same way: because employers do not pay for the storage, but instead pay only for the service itself, employers do not have the same legal access to this content.

As I see it, this ruling will have two important implications: 

First, more employers will expand their corporate messaging policies to include specific provisions regarding the ownership of text messages. Such provisions might include statements that text messages sent during business hours or that contain business records belong to the employer, not the employee. That will be the easy implication.

Second, this ruling will create additional problems for employers and some vendors. For example, what about hosted business-grade e-mail services that provide unlimited storage? For example, an employer who provides a hosted Exchange account for each employee with a provider that offers unlimited storage is, at least in theory, paying just for the service itself, not the storage – it could be interpreted that the hosted provider is offering storage for free, since storing 100 gigabytes in such an account would cost no more than storage for 1 megabyte. 

If a court interprets that the content stored in such an account is merely incidental and that the employer is paying only for the service – as it did in last week’s text messaging ruling – then hosted providers might be forced to charge for storage. What about a hosted archiving service that places no limit on the amount of storage? Will the court rule that the stored content is off-limits to employers without a warrant?

I believe that the Ninth Circuit’s ruling will actually create more legal issues than it has settled and will make employers focus more on corporate policies designed to make the ownership of data much more explicit.

Michael Osterman is principal analyst of Osterman Research.