As detailed in part one and part two of our multipart series, artificial intelligence (AI) and generative artificial intelligence (GAI) have had a sweeping impact on the U.S. workplace. However, as we will detail in this third and final installment, there are potentially material risks and pitfalls associated with using AI and GAI to assist with various aspects of the employment relationship. We will discuss several of these below.

Challenges in implementing AI in the workplace

Despite the many benefits of implementing AI and GAI in the workplace, misuse of AI by employees can result in the inadvertent disclosure of confidential information or intellectual property and exposure based upon inaccurate results.

As an initial matter, the use of AI tools can result in sensitive information or intellectual property being compromised. If not adequately safeguarded, confidential information and intellectual property can be unintentionally provided to AI and GAI software, which could result in the storage, access, and use of such information and property by unauthorized third parties. To avoid such inadvertent disclosure, it is critical that employers implement robust policies and protocols on prompts and information provided to AI tools when used for HR purposes.

In addition, if AI and GAI algorithms are not properly checked for accuracy, they may yield incorrect results that could cause an employer to plagiarize or make material misrepresentations, defamatory statements, or other mistakes based upon the inaccurate results. An illustrative example of the consequences of not fact-checking AI results can be found in a recent case in New York federal court. In that case, an attorney submitted a brief written by ChatGPT, which included citations to non-existent court cases that were fabricated by the GAI. The attorney was subsequently sanctioned for this.

Other potential pitfalls relating to the use of AI and GAI include AI potentially causing a disparate impact on a particular protected class – for instance, in terms of screening job candidates or selecting individuals for termination during a reduction in force. It is imperative, therefore, to conduct periodic audits to ensure that any AI or GAI used by a business is not inadvertently causing bias to seep into the workplace.

Yet another possible pitfall involves AI or GAI misinterpreting or misreading data or information, which can lead to inaccurate business reports and other misrepresentations by a business. This is a particular concern if employees become too comfortable relying on AI or GAI, without double checking the generated output or information.

Takeaways and final thoughts

As we have covered in this three-part series, the application of AI in the workplace is reshaping how employers conduct routine HR functions. While the use of AI and GAI offers many efficiencies, it also poses potential legal and ethical pitfalls. To best protect from potential exposure or misuse of AI-based tools, employers should take the following steps when using AI and GAI in the workplace:

  • Prepare and implement clear and comprehensive policies on the responsible use of AI within the organization. Such policies should address, among other things, mandatory fact-checking, data privacy, disparate impact, intellectual property protection, and ethical standards, as well as provide employees with guidelines on how to interact with AI tools.
  • Assess the current and prospective use of AI in the specific workplace, including how AI is currently integrated and identifying areas where AI can be effectively utilized in the future.
  • Ensure there is a degree of human oversight in the processes aided by AI and GAI, to avoid – among other things – unintended biases and the misuse or inadvertent disclosure of sensitive information.
  • Review the use of AI by third-party contractors and vendors to ensure that they are following applicable law, have appropriate security measures in place, and have protocols in place for such use that align with the employer’s own practices.
  • Conduct periodic audits of any AI and GAI tools to eliminate any potential biases.
  • Keep abreast of the latest legislation and caselaw pertaining to AI, as the legal framework is constantly evolving.

In this three-part series, we have covered a host of issues implicated by the ever-evolving use of AI and GAI in the US workplace. If you have any questions on this front, please contact one of the authors.