Employer Use of Electronic Monitoring and Surveillance

By David J. Pryzbylski and Colleen E. Naumovich

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There are countless workplace technologies available to companies now that enable the tracking of employees for various purposes. For example, many employers have GPS devices on company vehicles to track how efficiently deliveries are being made. But does the use of such technology violate labor law? Based on a new memo from the National Labor Relations Board’s (NLRB or Board) general counsel, the answer soon could be “yes” in many cases.

According to an NLRB press release issued in October 2022, “The General Counsel will urge the [NLRB] to adopt a new framework for protecting employees from employers’ abuse of technology by holding that an employer has presumptively violated the Act where an 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.” The press release goes on to say, “if the employer’s business need outweighs employees’ Section 7 rights, unless the employer demonstrates that special circumstances require covert use of the technologies, she will urge the Board to 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 memo states that employer use of such technologies in many instances could have a tendency to chill protected activity by workers, such as discussions about the possibility of forming a union. The general counsel seems to want to restrict the use of these types of devices completely unless an employer can show that their desired results cannot be achieved in the absence of their use. And when a company can justify its use, it must then disclose it to the employees.

What would need to be included in the disclosure? Per the memo, the employer would need to specify 1) the technology(ies) it is using to track or monitor the workers (e.g., smartwatches, truck GPS devices, etc.), 2) the basis/rationale as to why the monitoring is needed (e.g., enhancing production), and 3) the purpose for which the data derived from the devices is used (e.g., tracking progress to production targets).

Existing Board law already restricts employers’ ability to use surveillance technologies in certain circumstances. For example, employers cannot use surveillance devices to monitor employees engaging in protected activity, such as photographing employees picketing or hand billing. In that context, the Board weighs the employer’s justification for surveillance against the tendency of that conduct to interfere with the employee’s right to engage in protected activity. Absent convincing justification, however, the Board likely will hold that such conduct violates the National Labor Relations Act (NLRA) because it tends to intimidate employees.

The October 2022 memo goes a step further, though, by encouraging the Board to adopt an even broader framework that applies to the use of electronic management and monitoring tools. For instance, the memo takes aim at the use of algorithmic production metrics, such as warehouse quotas, suggesting they cause employees to work at “breakneck speed” and prevent employees from being able to engage in “protected conversations about unionization or terms and conditions of employment that are a necessary precursor to group action.”

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This proposed framework could affect manufacturers significantly, including employers in the flooring industry. For example, employers that use tracking devices on forklifts or other warehouse equipment would be subject to these new requirements should it become law. Similarly, it would apply to security cameras monitoring employees, tracking devices worn by individual employees, and potentially even production quotas monitored by electronic devices. These devices often are used for legitimate business reasons, such as loss prevention and monitoring employee productivity. Should this new framework be adopted into law, employers need to be prepared to justify their reasoning, especially if the use of these monitoring devices is otherwise unknown to employees. In that circumstance, the memo suggests that employers would have to demonstrate “special circumstances” that require the covert use of technologies.

As of now, this memo only signals what the current general counsel would like to be the law in this context. To effectuate such a change, the NLRB would need to issue a ruling in a case adopting this proposed standard or engage the administrative rulemaking process. To the extent this becomes the law, employers should consider instituting a policy to make these disclosures in writing and include sufficient detail to meet the standard articulated by the NLRB general counsel. A policy like this would need to be updated from time to time as new technologies are adopted in the workplace. Notably, this proposed law would apply to all employers, not just unionized ones, as the NLRA applies to all employers, regardless of whether their workforce is unionized or not.

Although this proposed framework is not yet the law, employers that currently use (or are contemplating using) technology that monitors employees may soon be up against a heightened standard that may render such devices unlawful in the absence of special circumstances. All employers should watch this because if the proposed framework is adopted, it likely will drastically limit how and when these types of technologies can be used in the workplace.

David J. Pryzbylski is a partner at Barnes & Thornburg, where he focuses on traditional labor relations and employment law. He can be reached at david.pryzbylski@btlaw.com. Colleen E. Naumovich is an associate in the labor and employment law department. She can be reached at colleen.naumovich@btlaw.com.

NOTE: This article should not be considered legal advice. In all cases, groups should consult their legal counsel.

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