Like many financial services firms, Wedbush Securities monitors the daily emails, instant messages and social networking activity of its 1,000-plus employees, says Mattias Tornyi, the company's Director of IT. They use an email monitoring software to flag certain types of messages and keywords within messages, he says. Every day, they end up reading 5% to 10% of the messages employees send.

That's fairly extensive, but many firms are, at the very least, monitoring some of employees' Internet, phone and email use, especially larger companies and those in sensitive or heavily regulated industries. The market for email monitoring software has grown more than 25% each year since 2008 and is projected to reach $1.23 billion in 2013, according to IT market research firm Gartner; more than one in three large U.S. companies employ actual people to read or analyze employee email, according to a 2010 study by email monitoring firm Proofpoint. Plus, a survey by the American Management Association and The ePolicy Institute found that almost half of the small, medium and large companies surveyed monitored phone use, and two out of three monitored web use. Instant-message and text-message monitoring are also increasing, says Stephen Marsh, chief executive of email archiving firm Smarsh.

Not only do employers watch what you're doing, but many act on what they find. One in five large U.S. companies fired an employee for violating email policies in the past year, the Proofpoint survey found. What was a fireable offense? Most email investigations pertain to issues of employees leaking sensitive, confidential or embarrassing information, or theft – not racy messages sent to a girlfriend from an office email account or the occasional online shopping binge from the corporate desktop.