NLRB General Counsel Targets Employers’ Use of Electronic Monitoring and Algorithmic Management Technologies

National Labor Relations Board (“NLRB”) General Counsel (“GC”) Jennifer Abruzzo announced that she will crack down on employers’ increasing use of automated technologies and electronic management systems. In General Counsel Memorandum 23-02, the GC stated her belief that employers’ use of these technologies can violate the National Labor Relations Act. Accordingly, the GC urges the five-member Board to utilize existing doctrine to address such violations, and adopt a new framework to protect employees “from intrusive or abusive forms of electronic monitoring and automated management that interfere with” employees’ rights under the NLRA. This memo portends significant implications for both unionized and non-union employers who rely upon such technologies to increase efficiencies and support operations.

Use of Artificial Intelligence in Employment Decision-Making. Many employers rely on artificial intelligence (“AI”) to screen applicants. The GC indicated that an employer’s reliance on applicant-screening technologies could violate Section 8(a)(3) of the NLRA if the underlying algorithm makes decisions based on employees’ protected activities. For example, if the algorithm devalues applicants who use the word “union” on a resume or job application, bypassing these applicants on the basis of previous union membership would likely violate the NLRA. Not only would an employer be liable for this unfair labor practice, the GC added that the third-party provider of the algorithmic tool may also be liable on the theory that the third party is acting as the employer’s agent in making the alleged unlawful decision.

Additionally, employers are increasingly using interviewing technologies to evaluate applicants or existing employees who may be seeking a new position within the company. Similarly, the GC notes that employers may violate Section 8(a)(1) if they coercively question employees or applicants regarding their propensity to seek union representation.

Application of Existing Board Law to Employer Use of New Technologies. The GC first intends to rely upon existing Board law in analyzing whether employer use of electronic management tools violate the NLRA. She notes that an employer’s implementation of new monitoring technologies would violate Section 8(a)(1) of the Act if instituted in response to employee activity protected by the NLRA. Similarly, an employer’s use of existing technologies for the purpose of discovering employee protected activity would also violate the Act. Finally, an employer may violate the NLRA if they dismantle the technology to preclude employees from engaging in protected activity, or otherwise isolate union supporters or discontented employees.

GC “Urges” Board to Adopt New Framework. The GC plans to soon take the issue to the Board and advocate that it establish a framework for addressing employers’ use of these technologies.

First, the GC will ask the Board to presume that certain “management practice[s]” – whether it be pursuant to a written policy or unwritten practice – violate the NLRA. Specifically, where an employer’s surveillance or management practices, viewed as a whole, “would tend to interfere with or prevent a reasonable employee from engaging in activity protected by the [NLRA],” these actions will violate Section 8(a)(1) of the Act. The GC provides examples of surveillance and management practices that the Board should presume are unlawful, including security cameras, dash-cam systems, and other tracking devices. This category also includes many technologies utilized by employers with remote workforces, including keylogging technology and software that takes screenshots, webcam photos, or audio recordings during the workday.

The burden would then fall on the employer to establish that its practice is “narrowly tailored to address a legitimate business need.” More specifically, the GC will ask the Board to require that the employer’s “need cannot be met through means less damaging to employee rights.” In other words, even if the employer establishes that the surveillance or management practices is supported by a business need, an employer will not meet the GC’s proposed burden if the Board deems there is any alternative means to accomplish the same goal that is less restrictive.

But even if an employer can establish there is no less restrictive means to meet its legitimate business need, the inquiry does not end there. The GC will ask the Board to then balance the employer’s interests against those of the employee to determine if the surveillance or management practice is lawful. Thus, the Board could still find that the employer’s practice violates the NLRA even if supported by a legitimate business need with no less restrictive alternative because, on balance, the Board finds that the employee’s interests trump the employer’s interests.

An employer can reasonably wonder whether it could win such a “balancing test.” But even if it did, the GC will ask the Board to require the employer to disclose to employees (1) the technologies it uses to monitor and manage them, (2) its reasons for doing so, and (3) how it is using the information it obtains. An employer will be excused from such disclosures only if it can demonstrate “special circumstances,” which is not defined by the GC in her memo.

Employer Takeaways. This memo does not constitute a change in the law. Rather, it sets forth the GC’s view of the law, its application to employer use of emerging technologies in employment decision-making, and announces the standard(s) the GC will urge the Board to adopt in a future case. But change is likely coming. Employers should prepare to offer business justification for its electronic management tools, even for rules and practices that are otherwise neutral regarding employee conduct protected by the NLRA. Employers should also review existing surveillance and electronic monitoring practices to ensure they are narrowly tailored to a legitimate business need. Finally, employers considering instituting new electronic management tools should consult with legal counsel to reduce its legal exposure if – or, more likely, when – the Board adopts all or substantial elements of the GC’s proposed standard.

As always, we will continue to update you when developments arise on this important issue.