The Use of A.I. in the Workplace – Privacy & Confidentiality Concerns (Part 1)

While AI has been a revolutionary development that can streamline and improve many workplace tasks, it also comes with legal hurdles that need to be carefully navigated. Meagan Bainbridge and Lukas Clary review some of the potential intellectual property and privacy concerns that can come about when employees use AI for work purposes in this episode of California Employment News.

Watch this episode on the Weintraub YouTube channel here.

Find part two of this two-part series here.

Show Notes:

Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub Tobin. My name is Lukas Clary. I’m a shareholder in the firm’s Labor and Employment Group. I am joined today by my partner, Meagan Bainbridge, who is also a partner in the Labor and Employment Group, for the first episode of our two-part series regarding artificial intelligence in the workplace. While AI has been a revolutionary development that can streamline and improve many workplace tasks, it also comes with some legal hurdles that need to be carefully navigated. Today, we’re going to focus on a couple of those potential intellectual property and privacy concerns that can come about when employees use AI for work purposes. Meagan, before we dive too far into that, I think it would help to start with just a brief overview of the various ways employers can use AI.

Yeah, that would be helpful. And we should actually first explore what is actually considered AI. Congress defined AI to mean a machine-based system that can, for a given set of human defined objectives, make predictions, recommendations, or decisions influence real or virtual environments. That’s just a lot of words to essentially mean in the employment context. Using AI has typically meant that a developer relies partly on the computer’s own analysis of data to determine what criteria to use when making decisions. One of the ways employers have begun to utilize AI the most is with recruiting and hiring decisions. For instance, there are virtual assistants or chat bots that ask job candidates about their qualifications and reject those who do not meet predefined requirements. There’s video interviewing software that can evaluate candidates based on facial expressions and speech patterns. And there’s testing software that provides job fit scores for applicants or employees regarding their personalities, aptitudes, cognitive skills, or perceived cultural fit based on their performance on a game or a more traditional test. There’s also computer software and apps to use AI with to help performance management, aid employers with learning and developing development, tracking efficiency, determining pay scales, and monitoring employee satisfaction.

In many ways, AI can make employers’ lives easier, as there are automated methods that can take place of work previously done by humans. But with the good often comes the not so good. Lukas, can you tell us a little bit about some of the concerns employers should have using AI in the workplace as it relates to privacy and intellectual property issues?

Right. Well, I think both privacy and intellectual property concerns start from similar places. So the first issue we have to think about is what information are employees putting into the AI platforms they are using? So AI relies on access to a vast amount of information for it to function properly, and employees may be uploading information to these platforms that will aid them in carrying out certain tasks. So, for example, employees might provide the platform with voluminous material and ask AI to summarize that material. Or employees might provide some type of source code or confidential code or some other confidential material and ask AI to do things like use that information, repair something, or improve the product. From an intellectual property perspective, the concern is that AI models will often store and use information that is uploaded to them to improve its own functionality. So once you put the information in there, once employees put the information in there, it is there for others to access as well. So if you are uploading confidential or trade secret information, you risk allowing others access to that and also losing the right to call it a protected trade secret at all.

Similarly, from a privacy perspective, there could be information uploaded that contains personal Identifiers and other sensitive information about others, whether it’s employees or consumers. If others gain access to this information, it could increase the risk for things like identity fraud and cyberbullying. So this is something that has to be closely and carefully monitored. Another concern is that you could risk violating employee privacy through use of AI technology to monitor things like keystrokes or facial recognition technology to observe time in front of a computer monitor. If employees are not made aware that this is going on a quarter, government agency could potentially view that as an unlawful privacy intrusion. Finally, on the other end of the spectrum, there are intellectual property concerns associated with using the information that AI churns out. We have already seen some lawsuits against AI companies by artists and others who claim that AI used their copyright or patented information without authorization. These types of claims could potentially extend to businesses who use the same information, including for today’s purposes. When employees use such information within the scope of their responsibilities, and that liability then extends to the employer. So these are the types of privacy and confidentiality concerns that can arise through the use of AI in the workplace.

That does not mean that we should necessarily avoid AI or forbid employees from using them. I still believe the benefits of AI in the workplace still vastly outweigh the risks, so it’s a good product to have available. We just need to make sure employers take these risks into account while implementing AI. So, Meagan, with that said, are there some practical tips and best practices you would recommend to employers who are navigating these issues?

Yeah, well, first, employers should develop policies around the use of AI by employees. Notes will cover the antidiscrimination, which we’ll talk about on the next episode. Privacy and intellectual property concerns we are discussing in this series. Policies should clearly prohibit the use of AI without authorization and notice as to what AI the employee is using. This policy should include recording points for suspected violations and that sort of thing. Employers should also work with their It departments to determine how any AI is being used and treated as confidential information and trade secrets, and to also monitor and control who in the company has access to data and how it is being used.

Thanks Meagan. Great tips, really helpful. So that’s going to do it for today. Please join us again for the second part of this series, where we will focus on potential issues that could arise regarding discrimination laws when AI is used in the workplace. In the meantime, you can also continue to find California employment news on our blog at and wherever you listen to your favorite podcasts. Thanks, and we’ll see you next time.