NLRB General Counsel Encourages Increased Scrutiny of Electronic Employee Monitoring

On October 31, 2022, the General Counsel for the National Labor Relations Board (NLRB), Jennifer Abruzzo, issued a memorandum instructing regional offices to closely scrutinize employer use of certain electronic monitoring, data collection and automated management technologies. This memorandum further evidences the NLRB’s commitment to effectuating a strong national labor policy which includes protecting employees’ organizational rights and encouraging collective bargaining as described in our November 2020 client alert. Abruzzo reiterated these policy objectives in her February 2022 memorandum issued in support of the Biden administration’s Task Force on Worker Organizing and Empowerment’s February 2022 labor report.

In this memorandum, Abruzzo explains that the use of “intrusive or abusive electronic monitoring and automated management practices” may interfere with employees’ ability to engage in protected activity. Abruzzo describes new technologies such as movement tracking devices, keyloggers and tracking software, as well as improvements to existing technologies such as camera and audio recording, GPS tracking, artificial intelligence, and algorithm-based decision-making software. According to Abruzzo, these advancements in technology present a risk of unlawful employer conduct including the following: 

• Surveilling employees or creating the impression of surveillance through tracking, monitoring, and recording software or devices.
• Implementing new technologies in response to protected activity or using existing technologies to discover the existence or extent of protected activity.
• Disciplining employees who concertedly protest the use of such technologies.
• Using algorithmic management to establish production quotas and efficiency standards, and then discriminatorily applying those standards to union supporters.
• Collecting employee data to determine the propensity to seek representation or otherwise engage in concerted activity.
• Tracking or monitoring employee activity and movement to prevent certain communications or isolate union supporters.
• Failing to bargain over or provide information about the implementation of new technologies.

In addition to instructing the regional offices to vigorously prosecute such unlawful activity, Abruzzo also hints at other potential pitfalls for employers. First, Abruzzo notes that employers who spend money on surveillance technologies connected to organizational activities may be obligated to report such expenditures to the Department of Labor (DOL) on an LM-10 form and suggests future settlement agreements should require the employer to do so.

Next, Abruzzo recommends derivative liability for employers that use third-party software to screen job applicants or discipline employees where the underlying algorithm recommends action based on the applicants’ or employees’ protected activity.

Finally, Abruzzo recommends the NLRB adopt a new legal framework for analyzing new and improved workplace technologies used by employers to monitor employee activity. Under this proposed framework, any employer surveillance and management practice that, when viewed as a whole, “would tend to interfere with or prevent a reasonable employee from engaging in activity protected by the Act” would be presumed unlawful unless the employer presents a legitimate business need that cannot be achieved through a more narrowly tailored means. The legitimate business needs analysis is a strict standard and would make it increasingly difficult for employers to implement new workplace technologies where the technology can monitor support for mutual activity, such as union organizing. Even where the employer satisfies this strict standard, Abruzzo recommends that an employer be required to disclose its use of these technologies.

Interestingly, Abruzzo’s proposed framework is reminiscent of the framework recently adopted by the NLRB to scrutinize employer dress codes and policies. This suggests that the GC’s office, and potentially the Board, are looking to expand the areas where employer conduct is “presumptively” unlawful and shift the burden to employers to articulate a legitimate business need.

Driven by the Office of the General Counsel, NLRB regional offices continue to aggressively prosecute allegations of unlawfulness, thus many technologies which have legitimate and lawful purposes may now face increased scrutiny. Employers should evaluate their existing technologies to determine whether the use of such technologies would run afoul of this memorandum. Moreover, employers should consult with labor counsel prior to implementing any new technologies that monitor or track employee activity. If you have any questions about potential implications of this memorandum on your business or other employment-related questions, please contact an attorney on the Faegre Drinker labor and employment team.