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Season 2, Episode 6: Hot Topics in Employment Law
From Lawyer to Employer: A Shipman Podcast
Join host Dan Schwartz as he chats with guests Gabe Jiran and Sarah Niemiroski about the newest issues to populate the employment law arena - including the use of AI and DEI initiatives.
Daniel Schwartz: Welcome back to From Lawyer to Employer, a podcast about employment law. I'm your host, Dan Schwartz, partner in employment law at Shipman and Goodwin. On today's podcast, we tackle the subject of some of the newest issues to populate the employment law arena. Recently, my colleague Gabe Jiran, along with Sheridan King and Sarah Niemiroski gave a webinar on topics as diverse as generative AI to DEI initiatives as part of the Shipman and Goodwin Fall Employment Webinar Series. If Gabe sounds familiar, it's because he hosted the first series of this podcast. So, who better to join me along with Sarah to discuss some of the highlights from the program and answer some questions that were discussed back then.
So welcome back, Gabe, and actually, welcome back, Sarah, as well, because you were on an earlier episode too. I feel like we have two returning champions on Jeopardy here. Let's start on AI because I think it's the hottest topic. Everyone seems to want to know more about it. So Sarah, I know you covered a little bit of this in our webinar, but let's set the table for the discussion. What kinds of AI are we seeing being used in the workplace?
Sarah Niemiroski: If we take a step back, AI has been around us for decades at this point. AI in Google searches, AI in Siri, but now the hot topic is generative AI. So that is artificial intelligence that will create new documents based on existing data that's fed into it and monitored by people.
In the employment context, you'll see artificial intelligence being used to create job descriptions. You'll see it being used to screen resumes as well as to track worker productivity.
Daniel Schwartz: So, Gabe, it sounds great, right? This should all be positive, the use of technology to streamline processes and make us more efficient. But is there any overall concern that we should be having regarding such use?
Gabe Jiran: Yeah, the biggest thing that we're seeing right now is disparate impact analysis and whether for example, as Sarah mentioned, screening applicants through an AI program is going to result in a disparate impact on certain groups.
So, there's an example out of Amazon who was using AI back in 2018 to screen applicants and they found from the statistics that they were choosing more male applicants than female applicants. They dug a little bit deeper and they found that one of the reasons why was that they were excluding applicants who went to all female colleges because that didn't fit the model of other employees that they had hired and who had been successful in the company.
So they had to go back and modify that, and kudos to them for looking at the statistics to make sure that there wasn't a disparate impact, but that's a pretty easy example--but you can imagine how complicated that can get as to what parameters are put into the program, how the applicants are screened, and whether there are questions or parameters in that program that are going to result in certain applicants of certain groups not being chosen.
Daniel Schwartz: Yeah, that's a great point and I think we're still in the early phases--it feels like--on this and seeing the way this will play out. Sarah, you had mentioned a lot of buzz around generative AI, and I know I've played around with ChatGPT, too. I suspect there are some employers that are already using it for everything from offer letters to contracts. Any concerns that employers should have at the outset about just relying on ChatGPT for its resources?
Sarah Niemiroski: It's a new novel tool and we look at it and on first glance what it's producing is good content that humans could make, but you really need to be careful when using something produced by artificial intelligence because it's oftentimes not fully accurate. You look at the case that came out of, I believe it was the Southern District of New York, where an attorney took the history of a case, put it into ChatGPT and submitted a brief based on what they gave it. And ChatGPT created fake case sites that the court came, looked at and ended up sanctioning the attorney. So it's gone far, but we're not quite there to being able to rely on AI for creating work product.
Daniel Schwartz: Yeah, I was thinking of an example I was discussing recently about offer letters. Connecticut has a rule on what should be in offer letters, but ChatGPT may not be aware of that. So when you ask for, hey, give me an offer letter, ChatGPT may not be aware that there are state specific requirements of what should be in offer letters.
We might get there. We're still in the early phases about it, the 3.5, which is the public version of it, a little older, but ChatGPT 4, which is the paid version is really showing signs of progress there. So we'll have to wait and see on that game. It seems like with technology, the law is always trying to catch up.
Are there any legal developments that we're starting to see in this area that employers should be aware of?
Gabe Jiran: Yeah, most notably the EEOC has issued some guidance on the use of AI and how that would apply to existing laws. I think that that guidance is great, except for, I think the downside to it is it's trying to fit the square peg into the round hole.
It's taking the existing laws--for example, the Americans with Disabilities Act--and trying to apply that to the use of AI. It's not a perfect fit and so I expect we're going to see some additional legislation out there that is more specific to the application of some of these employment laws to the use of AI, for example, New York City has something currently, in fact, there's some other states that are making some movements, either they've passed some laws, or that there is proposed legislation on it, and I think one of the biggest things that we're seeing out of any of those is the monitoring of the use of AI and an analysis or audit of the results to make sure--specifically in the disparate impact analysis--that there's not a disparate impact. So stay tuned on that. I think we're going to see more of that, but that's what's going on out there right now.
Daniel Schwartz: Yeah, definitely something to keep an eye on and I'll be interested to see the developments in this area, which has really gotten a lot of public attention and now employers, I think, are really focused on how to incorporate that into their practice. Obviously, you had a lot of other topics I know that you covered in the webinar. What else did you flag for employers as being an issue to be aware of?
Gabe Jiran: One is we talked quite a bit about diversity, equity, and inclusion programs. So the Supreme Court recently had a decision about affirmative action in the college context. And now that's starting filtering down to DEI initiatives. There've been a number of lawsuits that have been filed against companies and law firms for their initiatives in looking at with great scrutiny as to how race or ethnicity or other factors are being used in the hiring process or the recruitment process.
I think the overall message that we're seeing out of all of this is that you can increase your scope of recruitment. You can go out and seek diverse candidates. But ultimately, when it comes down to the decision-making process, you should not be using any sort of diverse status in that. It shouldn't be a plus factor. It shouldn't be a determining factor. But, I caution this, and diversity is something near and dear to my heart. There's nothing wrong with going out and seeking more candidates and having a bigger pool. And that's something that I think all employers should be doing. But when it comes to the decision-making process, you can't be making decisions based on illegal means, which the Supreme Court has included as race and ethnicity.
Daniel Schwartz: Yeah, I think takes me back to discussions about increasing recruiting by going to, for example, historically black colleges. And doing some specific recruiting there to make sure that you are creating that diverse applicant pool more and more explicitly. Is there anything else we're seeing in that area?
Sarah Niemiroski: Gabe touched on most of it. A lot of these cases that are percolating in the federal courts existed prior to the Students for Fair Admissions case, but now the Supreme Court case is being used to bolster existing complaints and being used to file new ones.
Daniel Schwartz: I know that you guys, again, covered a lot, but there was a topic we were discussing that we didn't have time for in the webinar, which I find fascinating as well. It'll have a limited application to employers generally, but student athletes seems to be one of these issues that is now percolating. Are they employees? How are they classified? Gabe, what are we seeing in this area?
Gabe Jiran: Yeah, so there's been a checkered history here where it's been flip flopped as to whether they're considered employees and whether they can unionize specifically -- so there's been a couple decisions that have gone both ways.
And what we're seeing now is that there's actually legislation that's been proposed that is trending towards not treating them as employees. And the reason being is that, and this is a little bit surprising to me because it's being championed by a group of Democrats who traditionally would be on the employee side of things and trying to expand the rights of employees. But what they found, and I think this is pretty astute of them as they're saying if you consider them as employees, then are they subject to termination - like a normal employee. So does that mean a scholarship athlete can be terminated from their scholarship or terminated from the school? And so this legislation, which is still in its sort of infancy, is addressing it from that perspective, that it actually may be more protective for the students to not consider them employees.
So that's going to be very interesting to see how that plays out because to date, the legislation has not really addressed this. It's more applying existing legislation to the situation and say if they're getting a scholarship, does that really pay? And therefore, does that employee status and everything else applyto them? This seems to be hitting the nail more squarely on the head to say, look, we're going to actually have legislation that says one way or the other.
Sarah Niemiroski: And if that legislation passes, that would really kneecap a number of legal challenges that are being raised both before the National Labor Relations Board and in, traditional federal court context. Before the NLRB, there are a few cases percolating where students are seeking to unionize as employees. For example, Dartmouth College's men's basketball team has recently filed a charge saying that they're being prevented from unionizing. Similarly, there's another charge out against PAC 8, I believe, stating, that they should be able to unionize as employees/student athletes.
Similarly in the Third Circuit, you have a case, I believe, it's Johnson versus the NCAA, where student athletes are seeking to be recognized as employees under the Fair Labor Standards Act, which would enable them to receive pay for their work. We're not really sure what that would look like, but the Eastern District of Pennsylvania, the underlying court, said that their claim under the FLSA, it held water and denied a motion to dismiss, which is why the case is now before the Third Circuit and we're awaiting a decision.
So, if this legislation comes through and definitively says that student athletes cannot be considered employees, It's likely that these legal challenges will disappear.
Daniel Schwartz: Yeah, I think the big caveat with all of this is Congress right now seems to be in a bit of a stalemate. We really haven't seen, I think, from an employment law perspective, any significant new federal legislation in many years because of the gridlock in D.C. You think about in years past, it's not that long ago that we had the ADA amendments act which revised the Americans with Disabilities Act. It's hard to think of that type of legislation getting passed nowadays with the lack of consensus there and the unwillingness to put bipartisan bills before the legislature.
It's all one-sided at this point. So, it will be interesting to see where we head over the next few election cycles. Anything else that came up at the webinars or any other developments for employers to be aware of?
Gabe Jiran: We were fortunate that we were able to cover most of the questions that came out of the webinar, but one interesting question that we answered and probably could have been discussed a little bit more was, we were talking about the application of the National Labor Relations Act, and I know that you guys had discussed this Staircycle case that deals with what policies are acceptable or not, and one of the questions that we had posed to the audience was how would that apply to a police department?
And it raised this question of the state labor law applies to public sector entities, whereas the federal labor law applies to private sector entities. And the two don't always align, but they generally will follow each other. It's just a bit of a lag. And I think that is, we could probably do a whole seminar on that, just saying, okay, so the federal law says this, and then the state law either currently says this or came around to say this eventually.
And I think that for anybody who's listening, who's a public sector employer you listen to the stuff that we talk about on the federal level, and you may be saying, oh no, what do we do about that? And it's just wait, eventually it's probably going to come around on the state level. But the way that this has been going at the federal level with the National Labor Relations Board is that it literally depends on who the ruling party is for the presidency and it changes. Every four years or eight years or whatever it is. And if you're a public employer, you can watch what's going on and expect that the state would follow it. But the question is, what will they follow? It depends on when it is and if an election is good.
Daniel Schwartz: I guess it keeps all of us in business and all of us on our toes. Because the law is constantly evolving here. And it's one reason I was saying to, to someone else the other night, one reason I love employment laws, you really can't make this up every time.
I think we've seen it all and something new pops up. And this discussion today, it's hard to imagine having that same discussion 15-20 years ago, when we were really talking more about the rise of social media and can people post on there and we don't really see much of a discussion as much anymore on that and we're moving to these other issues like generative AI.
So, I think that's probably a great place to stop for today. I should mention to the listeners that you're welcome to listen to the full webinar that Sarah, Sheridan and Gabe gave, which is available on the Shipman and Goodwin website. Hope we can put a link to it in the show notes. Gabe, Sarah, thank you both for joining me to our listeners.
We've got a few more podcasts up our sleeves, so watch your podcast feed for those. Thanks again for joining us. And we look forward to having you join us again on from lawyer to employer.
Sarah Niemiroski: If we take a step back, AI has been around us for decades at this point. AI in Google searches, AI in Siri, but now the hot topic is generative AI. So that is artificial intelligence that will create new documents based on existing data that's fed into it and monitored by people.
In the employment context, you'll see artificial intelligence being used to create job descriptions. You'll see it being used to screen resumes as well as to track worker productivity.
Daniel Schwartz: So, Gabe, it sounds great, right? This should all be positive, the use of technology to streamline processes and make us more efficient. But is there any overall concern that we should be having regarding such use?
Gabe Jiran: Yeah, the biggest thing that we're seeing right now is disparate impact analysis and whether for example, as Sarah mentioned, screening applicants through an AI program is going to result in a disparate impact on certain groups.
So, there's an example out of Amazon who was using AI back in 2018 to screen applicants and they found from the statistics that they were choosing more male applicants than female applicants. They dug a little bit deeper and they found that one of the reasons why was that they were excluding applicants who went to all female colleges because that didn't fit the model of other employees that they had hired and who had been successful in the company.
So they had to go back and modify that, and kudos to them for looking at the statistics to make sure that there wasn't a disparate impact, but that's a pretty easy example--but you can imagine how complicated that can get as to what parameters are put into the program, how the applicants are screened, and whether there are questions or parameters in that program that are going to result in certain applicants of certain groups not being chosen.
Daniel Schwartz: Yeah, that's a great point and I think we're still in the early phases--it feels like--on this and seeing the way this will play out. Sarah, you had mentioned a lot of buzz around generative AI, and I know I've played around with ChatGPT, too. I suspect there are some employers that are already using it for everything from offer letters to contracts. Any concerns that employers should have at the outset about just relying on ChatGPT for its resources?
Sarah Niemiroski: It's a new novel tool and we look at it and on first glance what it's producing is good content that humans could make, but you really need to be careful when using something produced by artificial intelligence because it's oftentimes not fully accurate. You look at the case that came out of, I believe it was the Southern District of New York, where an attorney took the history of a case, put it into ChatGPT and submitted a brief based on what they gave it. And ChatGPT created fake case sites that the court came, looked at and ended up sanctioning the attorney. So it's gone far, but we're not quite there to being able to rely on AI for creating work product.
Daniel Schwartz: Yeah, I was thinking of an example I was discussing recently about offer letters. Connecticut has a rule on what should be in offer letters, but ChatGPT may not be aware of that. So when you ask for, hey, give me an offer letter, ChatGPT may not be aware that there are state specific requirements of what should be in offer letters.
We might get there. We're still in the early phases about it, the 3.5, which is the public version of it, a little older, but ChatGPT 4, which is the paid version is really showing signs of progress there. So we'll have to wait and see on that game. It seems like with technology, the law is always trying to catch up.
Are there any legal developments that we're starting to see in this area that employers should be aware of?
Gabe Jiran: Yeah, most notably the EEOC has issued some guidance on the use of AI and how that would apply to existing laws. I think that that guidance is great, except for, I think the downside to it is it's trying to fit the square peg into the round hole.
It's taking the existing laws--for example, the Americans with Disabilities Act--and trying to apply that to the use of AI. It's not a perfect fit and so I expect we're going to see some additional legislation out there that is more specific to the application of some of these employment laws to the use of AI, for example, New York City has something currently, in fact, there's some other states that are making some movements, either they've passed some laws, or that there is proposed legislation on it, and I think one of the biggest things that we're seeing out of any of those is the monitoring of the use of AI and an analysis or audit of the results to make sure--specifically in the disparate impact analysis--that there's not a disparate impact. So stay tuned on that. I think we're going to see more of that, but that's what's going on out there right now.
Daniel Schwartz: Yeah, definitely something to keep an eye on and I'll be interested to see the developments in this area, which has really gotten a lot of public attention and now employers, I think, are really focused on how to incorporate that into their practice. Obviously, you had a lot of other topics I know that you covered in the webinar. What else did you flag for employers as being an issue to be aware of?
Gabe Jiran: One is we talked quite a bit about diversity, equity, and inclusion programs. So the Supreme Court recently had a decision about affirmative action in the college context. And now that's starting filtering down to DEI initiatives. There've been a number of lawsuits that have been filed against companies and law firms for their initiatives in looking at with great scrutiny as to how race or ethnicity or other factors are being used in the hiring process or the recruitment process.
I think the overall message that we're seeing out of all of this is that you can increase your scope of recruitment. You can go out and seek diverse candidates. But ultimately, when it comes down to the decision-making process, you should not be using any sort of diverse status in that. It shouldn't be a plus factor. It shouldn't be a determining factor. But, I caution this, and diversity is something near and dear to my heart. There's nothing wrong with going out and seeking more candidates and having a bigger pool. And that's something that I think all employers should be doing. But when it comes to the decision-making process, you can't be making decisions based on illegal means, which the Supreme Court has included as race and ethnicity.
Daniel Schwartz: Yeah, I think takes me back to discussions about increasing recruiting by going to, for example, historically black colleges. And doing some specific recruiting there to make sure that you are creating that diverse applicant pool more and more explicitly. Is there anything else we're seeing in that area?
Sarah Niemiroski: Gabe touched on most of it. A lot of these cases that are percolating in the federal courts existed prior to the Students for Fair Admissions case, but now the Supreme Court case is being used to bolster existing complaints and being used to file new ones.
Daniel Schwartz: I know that you guys, again, covered a lot, but there was a topic we were discussing that we didn't have time for in the webinar, which I find fascinating as well. It'll have a limited application to employers generally, but student athletes seems to be one of these issues that is now percolating. Are they employees? How are they classified? Gabe, what are we seeing in this area?
Gabe Jiran: Yeah, so there's been a checkered history here where it's been flip flopped as to whether they're considered employees and whether they can unionize specifically -- so there's been a couple decisions that have gone both ways.
And what we're seeing now is that there's actually legislation that's been proposed that is trending towards not treating them as employees. And the reason being is that, and this is a little bit surprising to me because it's being championed by a group of Democrats who traditionally would be on the employee side of things and trying to expand the rights of employees. But what they found, and I think this is pretty astute of them as they're saying if you consider them as employees, then are they subject to termination - like a normal employee. So does that mean a scholarship athlete can be terminated from their scholarship or terminated from the school? And so this legislation, which is still in its sort of infancy, is addressing it from that perspective, that it actually may be more protective for the students to not consider them employees.
So that's going to be very interesting to see how that plays out because to date, the legislation has not really addressed this. It's more applying existing legislation to the situation and say if they're getting a scholarship, does that really pay? And therefore, does that employee status and everything else applyto them? This seems to be hitting the nail more squarely on the head to say, look, we're going to actually have legislation that says one way or the other.
Sarah Niemiroski: And if that legislation passes, that would really kneecap a number of legal challenges that are being raised both before the National Labor Relations Board and in, traditional federal court context. Before the NLRB, there are a few cases percolating where students are seeking to unionize as employees. For example, Dartmouth College's men's basketball team has recently filed a charge saying that they're being prevented from unionizing. Similarly, there's another charge out against PAC 8, I believe, stating, that they should be able to unionize as employees/student athletes.
Similarly in the Third Circuit, you have a case, I believe, it's Johnson versus the NCAA, where student athletes are seeking to be recognized as employees under the Fair Labor Standards Act, which would enable them to receive pay for their work. We're not really sure what that would look like, but the Eastern District of Pennsylvania, the underlying court, said that their claim under the FLSA, it held water and denied a motion to dismiss, which is why the case is now before the Third Circuit and we're awaiting a decision.
So, if this legislation comes through and definitively says that student athletes cannot be considered employees, It's likely that these legal challenges will disappear.
Daniel Schwartz: Yeah, I think the big caveat with all of this is Congress right now seems to be in a bit of a stalemate. We really haven't seen, I think, from an employment law perspective, any significant new federal legislation in many years because of the gridlock in D.C. You think about in years past, it's not that long ago that we had the ADA amendments act which revised the Americans with Disabilities Act. It's hard to think of that type of legislation getting passed nowadays with the lack of consensus there and the unwillingness to put bipartisan bills before the legislature.
It's all one-sided at this point. So, it will be interesting to see where we head over the next few election cycles. Anything else that came up at the webinars or any other developments for employers to be aware of?
Gabe Jiran: We were fortunate that we were able to cover most of the questions that came out of the webinar, but one interesting question that we answered and probably could have been discussed a little bit more was, we were talking about the application of the National Labor Relations Act, and I know that you guys had discussed this Staircycle case that deals with what policies are acceptable or not, and one of the questions that we had posed to the audience was how would that apply to a police department?
And it raised this question of the state labor law applies to public sector entities, whereas the federal labor law applies to private sector entities. And the two don't always align, but they generally will follow each other. It's just a bit of a lag. And I think that is, we could probably do a whole seminar on that, just saying, okay, so the federal law says this, and then the state law either currently says this or came around to say this eventually.
And I think that for anybody who's listening, who's a public sector employer you listen to the stuff that we talk about on the federal level, and you may be saying, oh no, what do we do about that? And it's just wait, eventually it's probably going to come around on the state level. But the way that this has been going at the federal level with the National Labor Relations Board is that it literally depends on who the ruling party is for the presidency and it changes. Every four years or eight years or whatever it is. And if you're a public employer, you can watch what's going on and expect that the state would follow it. But the question is, what will they follow? It depends on when it is and if an election is good.
Daniel Schwartz: I guess it keeps all of us in business and all of us on our toes. Because the law is constantly evolving here. And it's one reason I was saying to, to someone else the other night, one reason I love employment laws, you really can't make this up every time.
I think we've seen it all and something new pops up. And this discussion today, it's hard to imagine having that same discussion 15-20 years ago, when we were really talking more about the rise of social media and can people post on there and we don't really see much of a discussion as much anymore on that and we're moving to these other issues like generative AI.
So, I think that's probably a great place to stop for today. I should mention to the listeners that you're welcome to listen to the full webinar that Sarah, Sheridan and Gabe gave, which is available on the Shipman and Goodwin website. Hope we can put a link to it in the show notes. Gabe, Sarah, thank you both for joining me to our listeners.
We've got a few more podcasts up our sleeves, so watch your podcast feed for those. Thanks again for joining us. And we look forward to having you join us again on from lawyer to employer.