Employers have long used electronic management tools to track and improve employee performance, including GPS on company vehicles, employee badges for access or timekeeping, and monitoring software on work computers. The prevalence of remote work during the COVID-19 pandemic prompted an increase in the availability—and usage—of electronic management technology, which has drawn increased scrutiny from regulators.

On Oct. 31, 2022, the National Labor Relations Board (NLRB) General Counsel, Jennifer Abruzzo, in Memorandum GC 23-02, announced her plans to "vigorously enforce" existing law and implore the five-member Board to apply existing principles in new ways, particularly against employers who use artificial intelligence to assist with monitoring or decision-making regarding hiring, discipline, or performance management. Abruzzo's stated concern is that employers' use of "intrusive or abusive electronic monitoring and automated management practices" could reasonably be expected to interfere with employees' right to engage in activities protected under Section 7 of the National Labor Relations Act (NLRA).

Plan to Increase Enforcement of Existing NLRB Law

The first part of the General Counsel's plan is to zealously enforce existing NLRB precedent that protects employees from certain types of surveillance and technologies employed by management. Abruzzo asserts that the NLRB has long held that "an employer's mere observation of open, public union activity on or near its property does not constitute unlawful surveillance." Hoschton Garment Co., 279 NLRB 565 (1986). Accordingly, Abruzzo plans to rely on certain cases that have identified certain employer practices that already constitute unlawful surveillance. For example:

  • An employer may violate 8(a)(1) of the NLRA by instituting new monitoring technologies in response to activity protected by Section 7, or by utilizing technology already in place for purposes of discovering Section 7 activity, such as reviewing security camera footage or employees' social media accounts.
  • Employers relying on artificial intelligence to screen job applicants or issue discipline may also violate Section 8(a)(3) of the NLRA if the underlying algorithm makes determinations based on employees' protected activities.
  • Employers violate Section 8(a)(1) of the NLRA if they discipline employees who concertedly protest workplace surveillance or the pace of work set by algorithmic management. Employers also violate Section 8(a)(3) by discriminatorily applying production quotas or efficiency standards to remove union supporters.
  • Employers also violate Section 8(a)(5) of the NLRA if they fail to bargain with the union that serves as the employees' bargaining representative over the implementation of tracking technologies or fails to provide the union with information about the employer's use of technology or the data the technology aggregates.

Plan for New Burden-Shifting Framework

Abruzzo also plans to push the Board to adopt a new framework to protect employees' Section 7 rights. Under Abruzzo's proposed framework, employers would bear the burden of justifying their use of seemingly routine management technology. As such, an employer would "presumptively violate Section 8(a)(1) of the Act where its surveillance and management practice, viewed as a whole, would tend to interfere with or prevent a reasonable employee from engaging in protected activity."

If the employer overcomes the presumption and establishes that the practices at issue are narrowly tailored to address a legitimate business need, i.e., that its need cannot be met through means less damaging to employee rights, Abruzzo will urge the Board to balance the respective interests of the employer and the employees to determine whether the Act permits the employer's practices.

If the employer's business need outweighs employees' Section 7 rights and justifies the use of these technologies, absent a demonstration of special circumstances that require covert use of technology, employers would be required to disclose its use of technology to employees, along with its reason for employing such technology, as well as its anticipated use of the information it obtains from said technology.

Abruzzo notes that the framework she favors is consistent with the approach she has urged the Board to apply when evaluating an employer's facially neutral work rule to determine whether that rule could interfere with the subject employees' exercise of their Section 7 rights. Importantly, and consistent with the General Counsel's ongoing effort to impose extraordinary special remedies against employers, Abruzzo plans to push the Board to order additional remedies to address employers' use of such technology.

What Practices May Trigger Liability?

Employers should pay close attention to the following practices that might carry particular risk, based on Abruzzo's memo:

  • Tracking employees' movements using GPS, wearable devices, security cameras, and radio-frequency identification badges.
  • Monitoring employees' work on computers using keyloggers and software that takes screenshots, webcam photos, or audio recordings.
  • Tracking employees' whereabouts and communications using employer-issued phones or wearable devices, or apps installed on its employees' devices, including employees' personal cell phones or computers.
  • Recording employees' conversations.
  • Conducting pre-employment personality tests or reviewing applicants' social media accounts.
  • Using software with algorithms to review or select applicants for hire or employees for promotion or discipline.

The General Counsel urges Regional Directors to send her any cases involving "intrusive or abusive electronic surveillance and algorithmic management" so she might identify potential test cases to support her push for increased enforcement. See also, New York City's new law requiring audits of employer's automated decision-making systems.

Implications for Employers

The Board has not yet adopted the General Counsel's proposed standard for assessing the legality of an employer's technological tools. However, employers should anticipate an increase in unfair labor practice charges related to their use of technology. Employers should, therefore, be prepared to establish the legitimate business need for various electronic tools and carefully consider the implications of using seemingly routine technology to monitor their workforces. Those reviews should include evaluations of any algorithmic decision-making tools used to screen or hire employees, or to make decisions regarding promotions, pay, or discipline, to ensure they do not inadvertently take protected activity into account.

Employers with questions or concerns should reach out to one of our labor and/or artificial intelligence attorneys for assistance.