Electronic Monitoring and Algorithmic Management: Permissible Labor Practice or Unlawful Oversight?

In General Counsel Memorandum 23-02, National Labor Relations Board General Counsel Jennifer Abruzzo announced a new and unprecedented prosecutorial initiative aimed at employers that utilize technology to monitor and manage employees in the workplace.

General Counsel (GC) Abruzzo’s ostensible concern is “the potential for omnipresent surveillance and other algorithmic-management tools to interfere with the exercise of Section 7 rights by significantly impairing or negating employees’ ability to engage in protected activity and keep that activity confidential from their employer, if they so choose.” [1]

Summary

While the October 31, 2022, memo does not specifically state what types of data-centric monitoring and management may be of concern to GC Abruzzo, she does mention a variety of technologies that employers use to track employee productivity and work, including wearable devices, security cameras, radio-frequency identification badges, GPS tracking devices and cameras, keyloggers, software that takes screenshots, and webcam photos.

As the GC concedes, the use of technologies to manage and monitor employee production at employer facilities or home has increased greatly. However, GC Abruzzo believes that many adaptations of these technologies violate Section 8(a)(1) of the National Labor Relations Act (NLRA) where an employer institutes new monitoring technologies or utilizes technologies already in place “for the purpose of discovering that [Section 7] activity, including by reviewing security-camera footage or employees’ social media accounts; or creates the impression that it is doing such things.” [2]

The memo also indicates that Section 8(a)(3) of the NLRA may be violated if employers rely on artificial intelligence to screen applicants or issue discipline if the underlying algorithm triggers decisions based on employees’ protected activity. Notably, the memo states that a third-party software provider may also be liable in this type of case. [3]

Additionally, the memo points out that employers may violate Section 8(a)(3) by “applying production quotas or efficiency standards to rid themselves of union supporters.” [4] Finally, the memo reminds employers that the failure to provide unions with information about, and the opportunity to bargain over, the implementation of tracking technologies and their use of data violates Section 8(a)(5). [5]

Call to Action

In the memo, GC Abruzzo urges the National Labor Relations Board to “adopt a new framework for protecting employees from intrusive or abusive forms of electronic monitoring and automated management that interfere with Section 7 activity.” [6] Here, the GC proposes sweeping legal presumptions.

While GC Abruzzo mentions that she is “mindful that some employers may have legitimate business reasons for using some form of electronic monitoring and automated management,” [7] she notes that the Board’s job is to balance that arguably legitimate need with the Section 7 rights of employees:

• First, where the employer’s surveillance and management practices, viewed as a whole, “would tend to interfere with or prevent a reasonable employee from engaging in activity protected by the Act”—even during what is supposed to be working time—then that employer must demonstrate a business justification and that its use of technology is “narrowly tailored” to that justification. [8]
• Second, with sufficient justification to use the tools or practices, the employer also must disclose to employees any such covert (i.e., not immediately obvious) technologies to employees—regardless of the existence of a union and union information request—unless the employer carries the burden of showing special circumstances for the nondisclosure. [9] Therefore, unless an employer demonstrates that special circumstances require the use of covert technologies, the GC will urge the Board to require that the employer “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.” [10]

Next Steps

Given the vague and uncertain nature of this memo, employers reasonably may view a coordinated response now as premature—especially given the numerous other GC initiatives that have impacted businesses since 2021. However, in the short term, employers should consider a “stress test” exercise whereby they consider a potential NLRB investigation and corresponding requests for information on the scope of electronic monitoring and related systems in the workplace, and any written policies or protocols describing those systems.

Based on that exercise, employers can then identify opportunities to (1) reinforce and codify the legitimate business justification(s) for those systems; and (2) consider new or supplemental disclosures to employees about those systems without compromising their effectiveness for the workforce.