The 9th Circuit held the search did not violate the 4th Amendment because the employee had no reasonable expectation of privacy in his work computer. The most significant fact in the Court's view was that the employer had a policy permitting random monitoring and searching of the computer.
The Court of Appeals in part relied on a California court's decision, TBG Ins. Services Corp. v. Superior Court (Zieminski) (2002) 96 Cal.App.4th 443 , 117 Cal.Rptr.2d 155. In that case, the California Court of Appeal held that an employee had no expectation of privacy in a company-owned computer that the employee used at his home for work and personal mixed use:
As can be seen, Zieminski knew that TBG would monitor the files and messages stored on the computers he used at the office and at home. He had the opportunity to consent to TBG's policy or not, and had the opportunity to limit his use of his home computer to purely business matters. To state the obvious, no one compelled Zieminski or his wife or children to use the home computer for personal matters, and no one prevented him from purchasing his own computer for his personal use. With all the information he needed to make an intelligent decision, Zieminski agreed to the Company's policy and chose to use his computer for personal matters. By any reasonable standard, Zieminski fully and voluntarily relinquished his privacy rights in the information he stored on his home computer, and he will not now be heard to say that he nevertheless had a reasonable expectation of privacy.The 4th Amendment applies only to the government. But California's constitutional right to privacy can be asserted against private employers. Therefore, employers that do not have electronic monitoring policies risk claims that email / internet monitoring is an invasion of California workers' privacy. It seems to me that a company employing California workers would be vulnerable to such a claim even if the corporation is located out of state.
DGV