What Worries Will Wearables Give Employers?

July 31, 2015Articles Law360

Reprinted with permission from Law360. (c) 2015 Portfolio Media. Further duplication without permission is prohibited. All rights reserved.

With an estimated 10 million Apple Watches having been sold, wearable tech promises to become ubiquitous. However, in the workplace, wearable tech raises a number of concerns.

The most glaring concern with wearable tech is the potential risk to the confidentiality of companies’ proprietary business information and trade secrets. Employers should continue to be concerned about the easy availability of discrete, high resolution cameras in smartphones and other devices. Companies’ confidentiality and nondisclosure policies need to be sufficiently broad to ensure that employees are prohibited from photographing and sharing (in social media, email or any other external forum) confidential information and documents, including trade secrets, without authorization from the company. Companies with particularly sensitive trade secrets and on-site laboratories or manufacturing facilities (e.g., pharmaceutical companies, tech companies, etc.) should consider a workplace ban on cellphones and similar devices for employees and visitors.

While flash drives are nothing new, there are flash drive rings and other jewelry on the market that are discrete and can evade detection. Employers should be mindful of the ability of employees — in particular those who are resigning to work for a competitor — to download documents to a flash drive and remove them from the company. Again, employers need to address this issue in their policies and in any employment agreements. Employers should require resigning or terminated employees to surrender any and all company documents, including all electronic documents, and to sign a verification that all documents have been returned. The company’s information technology professionals also should be monitoring whether there is a spike in employees downloading documents or forwarding documents to personal or other outside email addresses.

With some sources projecting the sales of smartglasses to exceed the sales of smartphones within 10 years, millions of employees soon will be capable of clandestinely videotaping their work environments. In addition to the confidentiality concerns addressed above, employers need to ensure that their nonharassment policies prohibit employees from using this technology to harass their co-workers, including by videotaping them in otherwise private areas of the workplace. Although one can imagine a situation in which videotaping would be useful and permissible (e.g., videotaping medical procedures in a hospital setting or experiments in a laboratory setting), most employers would benefit from a blanket prohibition on videotaping without the authorization of a supervisor.

Audio recording is also a major concern in the workplace. There are wearable recording devices on the market that permit their user to save a 60-second segment of conversation after it occurs with a tap of the wrist. Anecdotally, there has been an increase in employees recording their discussions with their supervisors surreptitiously to be used in a future complaint or lawsuit. While there may be some legitimate uses for audiotaping in the workplace, most employers would benefit from policies that prohibit their employees from audiotaping their supervisors and co-workers without authorization.

Another key development in the area of wearable tech is the increasing use of implantable radio-frequency identification chips. Its proponents cite the fact that the chips give their users ready access to doors and photocopiers and other services with the wave of a hand. There have been reports of employers offering RFID chip implants to their employees in security-sensitive positions. The key distinction in those scenarios is that employees who are “chipped” do so voluntarily. Companies that are considering offering RFID chip implants to their employees need to be aware that several states, such as California, North Dakota, Oklahoma and Wisconsin, prohibit the mandatory implantation of an RFID microchip by employers and others. These laws subject the offenders to criminal charges or fines. Depending upon the venue in which the chipping takes place, employers that require their employees to be chipped also could face charges of assault or battery, or invasion of privacy claims, from their employees. In addition, if employers were able to compile any data about their employees’ health or genetic makeup using the RFID chip, it would compound the privacy and other legal concerns.

Fitness trackers also raise privacy concerns. Fitness trackers, perhaps the most popular wearable tech today, including devices such as Fitbit, Nike+ FuelBand and Jawbone, are capable of monitoring their wearers’ sleep patterns and activity. Wireless blood glucose and other health-related monitoring wearable devices also are on the horizon. Many companies issue fitness trackers to their employees in connection with corporate wellness programs. While there is not an issue, per se, with providing the devices to employees for their personal use, employers should not attempt to access or capture any data from their employees’ fitness trackers for purposes of any employment-related decisions. If an employer were to do so, they may be facing potential privacy issues and increased compliance requirements under the Health Insurance Portability and Accountability Act and the Genetic Information Nondiscrimination Act, as well as any state law on the issue.

Aside from the confidentiality and privacy pitfalls that wearable tech can create, wearable tech may force companies to improve the technology that they are using to ensure compliance with wage and hour and other laws. One can imagine a scenario in which an employee tracks his or her time worked on a wearable device and it conflicts with the employer’s official time record. Employers need to ensure that they track the hours worked by their nonexempt (and those are designated as exempt but arguably nonexempt) employees using reliable and accurate timekeeping technology whenever possible. Any tracking of employees’ work time needs to include records of any time worked at home, including on the company’s computer systems.

In another scenario, with the advent of wearable air quality trackers, employees are able to monitor the air quality in their workplaces and may become aware of an issue before the company is able to address it. Companies need to ensure that they are in compliance with all air quality standards issued by the U.S. Occupational Safety and Health Administration, and have technology at least comparable to what their employees may be wearing to ensure full compliance.

Although wearable tech has obvious advantages for employers that want employees to be accessible and responsive, it creates serious pitfalls for confidentiality and workplace conduct. Companies need to re-evaluate their employment policies and practices now to ensure that they are protected from the more intrusive features of wearable tech.