EEOC AI guidance

State and city legislatures are not the only bodies paying attention to AI. The U.S. Equal Employment Opportunity Commission (EEOC), for instance, recently announced its intention to increase oversight and scrutiny of AI tools used to screen and hire workers.

In January 2023, the EEOC published in the Federal Register a draft Strategic Enforcement Plan (SEP) outlining its priorities in the coming years. One priority is regulating the use of AI and machine learning systems in employment decisions. The EEOC points out that employers are increasingly using automated systems to target job advertisements, recruit applicants and make or assist in hiring decisions. Such screening tools, the EEOC warns, could intentionally or inadvertently exclude or adversely impact protected groups.

Following up on this priority, on May 18, 2023, the EEOC released a new technical assistance document titled “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964.” It explains the meaning of relevant terms, offers general background on Title VII and provides answers to questions employers may have.

Based on the above, the EEOC is clearly signaling that employers are responsible for ensuring their AI tools do not discriminate based on protected characteristics. Employers should therefore understand how their algorithms function to ensure they are not violating discrimination laws or regulations. This is particularly important because there is little precedent for enforcement actions in this space, making it difficult to know what practices are acceptable.

How should U.S. businesses respond?

So, how can U.S. employers best address the assimilation of AI into the workplace and, in particular, the hiring process?

While there is no one-size-fits-all approach, the most prudent plan of attack with respect to hiring is typically a holistic one. This means that, while AI can serve as an important tool for businesses, it should not necessarily be the only tool when making hiring decisions.

That said, AI tools have been shown to be effective in identifying key talent and, therefore, when coupled with the potential diversity, equity and inclusion (DEI) benefits, can be an extremely important part of growing a 21st-century business. Indeed, the goal of using AI in the employment screening and hiring process is to ensure that businesses select the best person for the job, regardless of any protected class, conscious or unconscious biases or the like. In this way, automated employment selection technology should absolutely help organizational DEI efforts.

Employers can also supplement existing privacy and personnel policies, practices and procedures as long as they realize that AI poses novel questions and concerns that require highly adaptive and forward-thinking decisions from the organization. In addition, U.S. businesses will want to monitor legislative and regulatory developments on this front, as we are increasingly seeing lawmakers and government administrators scrutinize the use of AI.

We anticipate that AI will affect areas of the workplace that might not have been anticipated – for instance, the collective bargaining process. While the National Labor Relations Act requires employers to negotiate with unions over certain terms and conditions of employment, such as wages, scheduling and grievance procedures, there is scant precedent for when the implementation of AI falls under that mandatory umbrella of bargaining.

The National Labor Relations Board (NLRB) and federal courts evaluating NLRB determinations have generally held that employers possess the managerial prerogative to implement technological changes in their businesses without negotiating with unions, although such analyzes are necessarily fact-intensive. U.S. employers should expect the NLRB and the courts to address the perhaps-analogous issue of AI in the near term.

In short, AI presents employers with a delicate dance where they risk falling behind competitors who used AI to their advantage and stepping into potential liability landmines inherent with intangible and novel technology. Employers should continue to monitor the AI space and exercise caution when it comes to their own use of such tools in the workplace.