Nationwide at center of e-mail privacy ruling.

In a ruling certain to be felt beyond the boundaries of the insurance industry, a federal court has upheld Nationwide Mutual Insurance Co.'s firing of an employee based on the contents of an e-mail it examined.

Upholding a lower court's decision, the 3rd U.S. Circuit Court of Appeals has found that a company's reading of an employee's e-mails that are stored in the company's own computer system doesn't violate a federal privacy law. At issue was whether Nationwide had the right under the federal Electronic Communications Privacy Act to go through the e-mail of Richard Fraser, at the time an agent for Nationwide, without his consent.

The appellate panel, sitting in Philadelphia, ruled that Nationwide did in fact have that right. The ECPA prohibits "intercepts" of electronic communications, including e-mail. But Nationwide didn't intercept the material, the court said; it gained access to it after Fraser wrote and sent it.

"Nationwide argues that it did not 'intercept' Fraser's e-mail within the meaning (of the ECPA) because an 'intercept' can only occur contemporaneously with transmission, and it did not access Fraser's e-mail at the initial time of transmission," the three-judge panel wrote in its Dec. 10, 2003, ruling.

Further, the court wrote, the e-mail was stored on Nationwide's system, which it administered.

Fraser filed a lawsuit in U.S. District Court, alleging that Nationwide violated federal wiretapping laws when it read his e-mail. Nationwide requested and won a summary judgment, which is a decision based on the facts of a case, without a jury. It was Fraser's appeal of that decision that was before the appellate court on Dec. 10.