The National Labor Relations Board (NLRB) continues to take actions that impact employers.
NLRB Appoints Its First Chief Artificial Intelligence Officer: What Employers Need to Know
On August 29, 2024, the NLRB appointed David K. Gaston its first Chief Artificial Intelligence Officer (CAIO). This new role, mandated by President Biden’s 2023 executive order, positions the NLRB to play a critical part in ensuring compliance with federal AI regulations, including privacy, safety, and the protection of employee rights.
As CAIO, Gaston will oversee the NLRB’s use of AI technologies, ensuring that employers' automated decision-making systems align with federal guidelines. This appointment has major implications for employers, particularly those using AI in hiring, performance evaluations, or disciplinary actions.
AI tools that disproportionately affect workers engaged in union organizing or collective bargaining could come under scrutiny, mainly if these systems are found to have a chilling effect on employees’ rights under Section 7 of the NLRA.
Non-Solicitation Agreements Under Fire: A Growing Trend of Regulation
The NLRB’s increasing scrutiny of non-solicitation agreements is another area of concern for employers. These agreements, commonly used to prevent employees from recruiting colleagues to competing businesses, are now being viewed through the lens of NLRA protections.
The shift began with NLRB General Counsel Jennifer Abruzzo’s 2023 Memorandum (GC Memo 23-08), which challenged the legality of non-compete agreements under the NLRA. The memo argued that non-competes often violate workers’ rights to organize, seek better working conditions, or engage in collective bargaining activities. While the GC Memo primarily addressed non-compete clauses, it set the stage for the NLRB’s increasing focus on non-solicitation agreements.
The J.O. Mory, Inc. decision further clarified the NLRB’s stance, with an administrative law judge (ALJ) ruling that certain non-solicitation and non-compete provisions were overly broad and could "chill" protected employee activities. Although this case is still under appeal, it illustrates the NLRB’s growing intolerance for restrictive covenants that interfere with Section 7 rights.
Interagency Collaboration: The Impact of the DOJ, DOL, FTC, and NLRB’s MOU on Employers
On August 28, 2024, the NLRB, DOJ, Department of Labor (DOL), and Federal Trade Commission (FTC) signed a historic Memorandum of Understanding (MOU) aimed at strengthening worker protections by ensuring better coordination during merger reviews. This agreement enables sharing of labor-related data, technical assistance, and training between agencies. For employers involved in mergers or acquisitions, the MOU signals a more rigorous approach to evaluating the potential impacts of mergers on workers and labor markets.
Specifically, this MOU allows the DOJ’s Antitrust Division and FTC to access critical labor data provided by the NLRB and DOL, ensuring that the effect of mergers on wages, job conditions, and labor competition is a crucial focus during antitrust reviews. In the past, merger reviews have primarily focused on competition in product markets, but this MOU also shifts attention to competition in labor markets.
The Bottom Line for Employers
The NLRB’s recent actions indicate a continuing intent toward greater regulation of employer practices. Employers must stay vigilant and proactive in adapting their policies to comply with these new standards.
Key steps employers should take:
Audit AI tools for compliance with NLRB standards.
Reevaluate non-solicitation and non-compete agreements to ensure they don’t infringe on employee Section 7 rights.
Prepare for detailed merger reviews by focusing on the potential impact on labor markets.
By anticipating and addressing these developments, employers can minimize legal risks and ensure compliance with evolving labor regulations.
