Workforce Bulletin

Since the dawn of digitalization, the collection and retention of personal and other business confidential data by employers has implicated security and privacy challenges—by amassing a treasure trove of data for bad actors (or unwitting/unauthorized employees) and drawing a roadmap for those seeking to breach the system. Adding artificial intelligence (AI) into the mix creates further areas of concern. A recent survey undertaken by the Society of Human Resource Management of more than 2000 human resources professionals indicates that AI is being utilized by the majority of ...

As the implementation and integration of artificial intelligence and machine learning tools (AI) continue to affect nearly every industry, concerns over AI’s potentially discriminatory effects in the use of these tools continue to grow. The need for ethical, trustworthy, explainable, and transparent AI systems is gaining momentum and recognition among state and local regulatory agencies—and the insurance industry has not escaped their notice.

On January 17, 2024, the New York State Department of Financial Services (“NYSDFS”) took a further step towards imposing ...

Almost a decade ago, in September 2014, California was the first state in the nation to enact legislation prohibiting non-disparagement clauses that aimed to prevent consumers from writing negative reviews of a business. Popularly referred to as the “Yelp Bill,” AB 2365 was codified at California Civil Code Section 1670.8, which prohibits businesses from threatening or otherwise requiring consumers, in a contract or proposed contract for sale or lease of consumer goods, to waive their right to make any statement—positive or negative—regarding the business or ...

While recent public attention has largely focused on generative artificial intelligence (AI), the use of AI for recruitment and promotion screening in the employment context is already widespread.  It can help HR-professionals make sense of data as the job posting and application process is increasingly conducted online. According to a survey conducted by the Society for Human Resource Management (SHRM),[1] nearly one in four organizations use automation and/or AI to support HR-related activities, such as recruitment, hiring, and promotion decisions, and that number is posed ...

On August 9, 2023, the U.S. Equal Employment Opportunity Commission (“EEOC”) and iTutorGroup, Inc. and related companies (collectively, “iTutorGroup”) filed a joint notice of settlement  and a request for approval and execution of a consent decree, effectively settling claims that the EEOC brought last year against iTutorGroup regarding its application software.  The EEOC claimed in its lawsuit that iTutorGroup violated the Age Discrimination in Employment Act (“ADEA”) by programming its application software to automatically reject hundreds of female applicants age 55 or older and male applicants age 60 or older.

After releasing an initial two-page “fact sheet,” Congress publicly posted the bill text of the No Robot Bosses Act (the “Proposed Act”), detailing proposed federal guardrails for use of automated decision-making systems in the employment context. Robert Casey (D-PA), Brian Schatz (D-HI), John Fetterman (D-PA), and Bernie Sanders (I-VT) currently cosponsor the Proposed Act.

On July 20, 2023, U.S. Senators Bob Casey (D-PA) and Brian Schatz (D-HI) introduced the “No Robot Bosses Act.”  Other than bringing to mind a catchy title for a dystopic science fiction novel, the bill aims to regulate the use of “automated decision systems” throughout the employment life cycle and, as such, appears broader in scope than the New York City’s Local Law 144 of 2021, about which we have previously written, and which New York City recently began enforcing. Although the text of the proposed federal legislation has not yet been widely circulated, a two-page fact sheet released by the sponsoring Senators outlines the bill’s pertinent provisions regarding an employer’s use of automated decision systems affecting employees and would:

California businesses, including employers, that have not already complied with their statutory data privacy obligations under the California Consumer Privacy Act (CCPA) as amended by the California Privacy Rights Act (CPRA), including as to employee and job applicant personal information, should be taking all necessary steps to do so. See No More Exceptions: What to Do When the California Privacy Exemptions for Employee, Applicant and B2B Data Expire on January 1, 2023. As background, a covered business is one that “does business” in California, and either has annual gross revenues of $25 million, annually buys sells or shares personal information of 100,00 consumers or households, or derives 50 percent or more of its annual revenues from selling or sharing consumers’ personal information. It also applies, in certain circumstances, to entities that control or are controlled by a covered business or joint ventures. Covered businesses may be exempt from obligations under certain enumerated entity-level or information-level carve-outs.

Since late October 2021, when the Equal Employment Opportunity Commission (EEOC) launched its Initiative on Artificial Intelligence (AI) and Algorithmic Fairness, the agency has taken several steps to ensure AI and other emerging tools used in hiring and other employment decisions comply with federal civil rights laws that the agency enforces, including Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA). Among other things, the EEOC has hosted disability-focused listening and educational sessions, published technical assistance regarding the ADA and the use of AI and other technologies, and held a public hearing to examine the use of automated systems in employment decisions.

A recent WSJ article about a private equity firm using AI to source investment opportunities by Laura Cooper presages a larger challenge facing employees and employers: AI tools do “the work of ‘several dozen humans’” “with greater accuracy and at lower cost.”  In the competitive and employee-dense financial services sector, AI tools can provide a competitive advantage.

Ms. Cooper cites San Francisco based Pilot Growth Equity Partners, one of many of a growing number of equity investment firms to utilize AI. Pilot Growth that has developed “NavPod’ a cloud based ...