Technology has revolutionized the workplace and has bolstered business operations and efficiency. Employers are increasingly using automated management systems and other electronic means to ensure that their workplaces are productive and thrive in a competitive environment. The rise of remote work during the COVID-19 pandemic has made these technologies more attractive to employers seeking to maintain business operations and manage an often-remote workforce. The National Labor Relations Board’s general counsel (GC) believes, however, that employers’ use of such technologies may violate the National Labor Relations Act (NLRA).

In her October 31, 2022 General Counsel Memorandum 23-02, GC Jennifer Abruzzo announced that she will urge the Board to adopt a new framework that seeks to hold employers accountable for use of what she calls “omnipresent surveillance and other algorithmic-management tools” if they tend to impair the exercise of Section 7 rights under the National Labor Relations Act.  Section 7 provides that employees have “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection.” According to GC Abruzzo employers using these technologies may be found to violate the NLRA; even employers using these tools lawfully would be required to disclose their use and purpose.

In her most recent memorandum, the GC expresses concern that  electronic management technologies may impair employees’ ability to engage in protected activity and keep it confidential from their employers:

Close, constant surveillance and management through electronic means threaten employees’ basic ability to exercise their rights. In the workplace, electronic surveillance and the breakneck pace of work set by automated systems may severely limit or completely prevent employees from engaging in protected conversations about unionization or terms and conditions of employment that are a necessary precursor to group action.

What is “surveillance and management through electronic means” according to the GC? While not defined, the GC refers to GPS tracking devices, cameras, wearable devices, radio-frequency identification badges, keyloggers and other monitoring software, phones or other devices with tracking capability, and artificial intelligence and algorithm-based decision-making tools, such as applicant personality tests.

To make the case for increased scrutiny of management technologies, the GC cites several uses of technology that constitute unlawful surveillance or retaliation under current law, such as photographing employees engaged in picketing or hand billing, reviewing security camera footage or employees’ social media accounts to discover union activity, instituting new monitoring technologies in response to union activity, creating the impression of surveillance, or utilizing artificial intelligence to screen out union supporters or to impose discipline based on protected activity.  The memo also highlights that multiple federal agencies are targeting employers for their use of monitoring technologies, including the Federal Trade Commission, the Consumer Financial Protection Bureau , the Department of Justice, the Equal Employment Opportunity Commission, and the Department of Labor, almost all of which have interagency agreements with the Board to facilitate information sharing and to coordinate enforcement against employers. 

Under the GC’s proposed legal framework for evaluating the use of electronic management technologies, 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 an employer 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 employees’ rights – the GC 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.  Finally, if the employer’s business need outweighs employees’ Section 7 rights and justifies the use of these technologies, unless the employer demonstrates that special circumstances require covert use, the GC’s proposal would require the employer to disclose to employees the technologies it uses to monitor and manage them, its reasons for doing so, and how it is using the information it obtains.

The GC adds that the foregoing standard is consistent with the approach she has urged the Board to adopt in cases where an employer maintains facially neutral work rules that could interfere with the exercise of Section 7 rights, which is to balance the effect of the rule on a reasonable employee who is in a position of economic vulnerability under the totality of the circumstances with the employer’s legitimate business interests, under a similar burden-shifting framework.¹ The breadth and tone of the memo indicate the GC believes that many electronic management systems currently do interfere with employees’ section 7 rights, and we predict that if the Board adopts this standard, the burden increasingly will be on employers to justify the use of these technologies, just as the burden increasingly will be on employers to their handbooks if the Board agrees with the GC’s work rules standard.  The GC also noted that she may seek other remedies besides disclosure, such as limiting access to information and permitting employees to respond to discipline based on electronically obtained information,² which is consistent with her ongoing effort to impose extraordinary remedies against employers.

Employers should understand that the GC’s proposed standard for evaluating the legality of electronic management tools is exactly that – a proposal, which is not the law unless and until the Board endorses it.  That said, the memo suggests that the GC will seek to bring complaints against employers using these tools, so as to “tee up” a case for Board consideration. Employers, therefore, should be vigilant to comply with extant law regarding unlawful surveillance and retaliation, and be prepared to explain the business reasons for its electronic management tools. Furthermore, employers should consider any applicable privacy laws and electronic monitoring disclosure laws in the jurisdiction, as well as the host of other federal regulatory requirements that may be implicated.

Littler Workplace Policy Institute (WPI) will keep readers apprised of significant developments.