If these communications occurred from within Paypal's coporate network or using Paypal equipment they could have been gathered using employee spying systems that they might have in place.
The law isn't the employee's friend here...employees have no reasonable expectation of privacy on company devices.
EDIT: BlackBerry Enterprise Service is what I was thinking of. There's a least one tool that you can use with BES, Retain by GWAVA, that will track and store your employee's text message.