Can an IT person put a keylogger on a company computer without the employers permission?

Who has legal authority within a company to log keystrokes? What are the legal requirements for such an action? I live in CA if it makes a difference.

Just to clarify: my wife works for a company where the boss is fine with her emails but IT is threatening to keylog her computer. She doesn't do anything wrong but is afraid that personal info will get out that she would rather keep quiet. The IT guy is getting upset because his "helper" is troubleshooting and fixing more problems than he is.

An IT person cannot log keystrokes for any employee without the knowledge and consent of management.

If an IT person installs a keystoke spyware without management persmission, the IT person gets fired.

If Management approves the keystroke spyware, then the IT person can install the logger on the employee's pc without the employee's knowledge or consent

My sense is they can do what they want... it's their computer. Just like they can look at the phone bills each month.

The employer holds all the cards. IT must have permission unless there is a written policy.

Yes. Employees have no expectation of privacy on a company computer and the employer has every right to monitor usage to ensure that their computers are not used contrary to policy.

EDITED AFTER DETAILS ADDED ***Email's have been determined to be legally admissible memo's, so even inter-company emails that you would have phrased differently if you knew anyone could read it still gives no fair reason to object to a key logger.

Yes, as you have described it I.T. may install a key logger, some internet activity regardless of at work or at home can result in law enforcement arriving with a warrant to arrest persons and seize the computers.
The emails your wife is concerned with, should be thought of as written text placed on a bulliten board in a public place.

get a blackberry

You're hired by the company and provided your PC and you suppose to work during the scheduled hours. Your company has the rights to monitor you. It likes you hire somebody coming to work inside your house and he or she won't let you monitor (or watch). Unless you can prove it is a discrimination, you can't sue your company. By the way, the door is always open. You can always walk out and find another job at a better company.
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Ask your wife to email the IT, copy her boss and the IT boss, ask them why they installed key logger software on her machine but not on others. They need to provide her an answer and she will work with them to resolve the issue. If not, she can complain to the HR. The IT is the same as your wife, they work for the same company and for the same big boss. They cannot treat your wife like that if they're not instructed so.

Unless there are privacy rules in the employment contract, there are no legal requirements and the company can monitor what they want.

Why not? Its a company computer....hopefully
used for company business.........