You my friend are an idiot. Snooping? Find me a web server that doesn't contain logs, particularly for services that require authentication and don't specifically state they don't keep logs.
I think he was referring to this:
I caught him cheating on his wife based on computer forensics I did for her and some network traffic tapped on their network at her behest.
Although without further explaining the situation surrounding these "computer forensics I did for her" and "some network traffic tapped at her behest", it's hard to tell. If she's the customer and pays the bills for the network services you provide her, it's probably OK. Not sure if the users need to be warned that their traffic can be analysed though, as I'm not a legal expert. But I wouldn't be surprised to find that there's a legal obligation of notification, similar to legislation surrounding security cameras.