On October 31, 2022, Jennifer Abruzzo, the NLRB’s General Counsel (GC), released a memorandum regarding employer use of electronic surveillance and automated management, and its potential interference with employees’ ability to confidentially engage in protected activity under Section 7 of the Act. Opining that “[a]n issue of particular concern to me 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,” the GC signaled an increased scrutiny of certain surveillance methods utilized by employers and further urged the Board to protect employees from intrusive electronic monitoring “and automated management practices that would have a tendency to interfere with Section 7 rights” by “zealously” enforcing existing law and by proactively applying settled labor-law principles in a “new way.”

In an effort to lay the foundation for this call for increased scrutiny, the GC cited numerous Board decisions that have previously found various employer surveillance activities violative of Section 8(a)(1) of the Act, including employer utilization of technology to discover or observe public displays of protected concerted activity, establishes new monitoring technologies in response to activity protected by Section 7, utilizes technologies already in place for the purpose of discovering that activity, including by reviewing security-camera footage or employees’ social-media accounts, or creates the impression that it is doing such things, and disciplining employees who protest workplace surveillance. Additionally, the GC cited to extant Board law (under Section 8(a)(3) of the Act) proscribing employer use of artificial intelligence to screen job applicants or issue discipline based on protected activity, or by failing to provide information regarding their use of data from tracking technologies.

Now, on the basis of the GC’s stand-alone conclusion that “employers so commonly retaliate against employees for exercising their Section 7 rights, the Board recognizes, with court approval, that a ‘right to privacy’ is ‘necessary to full and free exercise of the organizational rights guaranteed by the Act,’ and that ‘[c]lose, constant surveillance and management through electronic means threaten employees’ basic ability to exercise their [privacy] rights,’” the GC is pushing the Board to not only continue enforcing these precedents, but to also adopt a new framework to keep pace with technological advancements to ensure that employers not only have a legitimate interest in utilizing these technologies, but to also ensure any claimed legitimate employer interests are being properly balanced with employees’ rights to organize.

To that end, and noting “[i]t is the Board’s responsibility ‘to adapt the Act to changing patterns of industrial life,’” the GC outlined several key recommendations:

• Despite claiming to be “mindful that some employers may have legitimate business reasons for using some forms of electronic monitoring and automated management,” the GC will nonetheless urge the Board (in “appropriate cases”) to find that an employer’s use of surveillance practices that interferes with or prevents a reasonable employee from engaging in protected activity creates a rebuttable presumption that the employer has violated Section 8(a)(1), unless the employer can demonstrate that the practices at issue are narrowly tailored to address a legitimate business need. In such cases, even where the employer is able to demonstrate that its claimed business need for the surveillance practice outweighs employees’ Section 7 rights, the GC is urging the Board to require employers to disclose to employees the technologies it uses to monitor and manage them, the reasons for doing so, and how the information obtained is being used, unless the employer demonstrates that special circumstances require covert use of the technologies.

• The GC has further urged the Board to permit restrictions to employees’ statutorily protected communications only if “legitimate and substantial justifications” outweigh employee’s Section 7 rights in an investigation.

The GC concludes by reiterating the NLRB’s commitment to an interagency approach to prevent employers from potentially violating federal law using electronic surveillance and algorithmic management technologies and indicates that it will facilitate information sharing and coordinated enforcement of these issues, to include information sharing with the Federal Trade Commission, the Consumer Financial Protection Bureau, Department of Justice, Equal Employment Opportunity Commission, and the Department of Labor, among others (citing recent agreements the GC has signed with many of these agencies to facilitate information sharing and coordinated enforcement, as we outlined in a prior post).

Key Takeaways

While the advice of the GC’s Office is not binding upon the five-member Board, it does indicate a significant shift in prosecutorial priorities and guidance under the Biden Administration, as we previously discussed here (addressing the scope and likely impact of GC Memo 21-04, which identified the subject matters that the NLRB Regions must submit to the GC’s Division of Advice before any prosecutorial decision can be made). This memorandum, like several others before it, sends a clear message to employers that the NLRB will be aggressively seeking to not only protect employees’ Section 7 rights, but also seeking to expand these rights by shifting the burden to employers to establish legitimate and substantial justifications for the implementation and use of a variety of electronic surveillance and algorithmic management technologies that have been, up until now, largely routine and seemingly unconnected to Section 7 of the NLRA.

At the very least, this memorandum provides a helpful roadmap for unions and employees to lodge unfair labor practice charges against employers found to merely maintain any sort of electronic surveillance and/or algorithmic management technologies in the workplace, in addition to those employers who actually utilize these technologies to discipline or otherwise restrict employee activity (protected or otherwise). At its most extreme, this initiative (coupled with the GC’s call for expanded remedies for the commission of unfair labor practices, as we addressed here) may drastically curtail the viability of certain electronic surveillance and/or algorithmic management technologies in various workplaces.