WASHINGTON—A text messaging case argued last week before the U.S. Supreme Court highlights the importance of employers developing up-to-date technology policies and applying them consistently, observers say.

Observers also say that while the case, City of Ontario, Calif., et al. vs. Jeff Quon et al., involves a public entity, the court's decision likely will affect private employers as well, and it behooves all employers to take a look at their existing policies.

According to court papers, Mr. Quon, a member of the California city police department's SWAT team, sent sexually explicit text messages to his wife and mistress, both police department employees, on a department-provided pager and exceeded his monthly allotment several times.

Before the city acquired the pagers, Mr. Quon signed an employee acknowledgment that, among other things, said the city reserved the right to monitor all “network activity, including e-mail and Internet use, with or without notice” and that users “should have no expectation of privacy or confidentiality” when using city-provided electronic communications.

However, Mr. Quon said he was told verbally that the police department would not audit his messages if he paid an overage fee, which he did. But the city then asked Arch Wireless Operating Co. Inc., a unit of Westborough, Mass.-based Arch Wireless Inc., to send it transcripts of his messages as part of an investigation, court records state.

Mr. Quon and his messages' recipients subsequently sued, alleging violations of the Fourth Amendment, which protects against unlawful searches and seizures, and the 1986 Stored Communications Act, which covers disclosure of communications while in electronic storage by electronics communications services.

In its 2008 decision, the 9th U.S. Circuit Court of Appeals in San Francisco partially overturned a lower court ruling and held that employers do not have the right to read the contents of an employee's text messages and remanded the case for further consideration.

The appeals court also ruled that the city violated the Stored Communications Act, although this issue is not under consideration by the U.S. Supreme Court.

Although the Fourth Amendment applies to public employers, the court's decision in this case also will be significant for private employers, observers say.

“There's a good chance that courts, looking at private employer policies, will look to the Supreme Court for guidance just because it's the first case in 20-something years addressing this type of monitoring,” said Elizabeth Pierce Kuhn, an associate with law firm Ford & Harrison L.L.P. in Tampa, Fla.

Katharine H. Parker, a partner with Proskauer Rose L.L.P. in New York, agreed that the ruling could affect public and private employers.

“To the extent the opinion does address the written policy, that can impact private and public employers, because many private companies have the same kinds of policy that the public employer had in this situation,” she said. “And the extent to which the court addresses how the policy might impact expectations of privacy...it could impact how employers draft their policies regarding computer use,” Ms. Parker said.

Farrah Pepper, of counsel with law firm Gibson, Dunn & Crutcher L.L.P. in New York, said, “An opinion that holds that employees in the governmental context should be bound by the official policies of the organization, notwithstanding...informal policies that might exist, if extended to the private realm, could mean that the impetus for private companies to develop and enforce robust electronic communication and privacy policies would be stronger than ever.”

Daniel I. Prywes, a partner at law firm Bryan Cave L.L.P. in Washington, noted that while the “traditional rule is that private employers can monitor employee communications through employer-provided networks and equipment, provided that the employers have given notice of such monitoring to employees beforehand,” there also “have been quite a few courts that have been niggling away at that general rule, and carving exceptions for this.”

Based on oral arguments, many observers said they expect the Supreme Court to overturn the 9th Circuit's ruling. Regardless of the high court's ultimate decision, the case highlights the importance of having consistent, up-to-date policies, observers say.

It “basically tells employers that they need to be careful how they draft their policies and how they follow their policies,” said Boris Segalis, an associate with law firm Hunton & Williams L.L.P. in New York.

Observers also noted that Ontario, Calif., did not explicitly cover pagers in its e-mail policy. Furthermore, while an official policy forbade the private use of city equipment, an unwritten policy permitted its use.

“They got stuck in litigation because their policy wasn't really comprehensive, because it didn't change with the technology,” said Tiffany L. Schmidt, a partner with law firm Abrams & Schmidt L.L.C. in Arden Hills, Minn.

If the city had been consistent in following its policy, “they wouldn't have had such a problem here,” said Charles H. Kennedy, a partner with law firm Wilkinson Barker Knauer L.L.P. In Washington.

But by permitting police department employees to pay if they exceeded the messaging limits, “they sort of indicated they saw some part of the use of the device or the system might be considered private.” Management was “sending mixed signals,” Mr. Kennedy said.

“Employers would be wise to revisit their electronic communications policies” before the Supreme Court issues its decision, said Devjani Mishra, a partner with law firm Seyfarth Shaw L.L.P. in New York.

In addition, “employees really would be well-advised to segregate their personal from their public electronic devices,” said Ms. Mishra. “The bottom line is, in 2010 it's pretty easy to get a free e-mail account,” she said. “There's really no reason employees should be using the work-supplied e-mail account or pagers” for personal use.