The release of AI programs, like ChatGPT or DALL E, has sparked intense public debate about the use and limitations of AI. Despite this rather recent public development, in many companies, the use of AI is already well established. In the context of HR, common areas of application are seen in the search for candidates, the initial screening of job applications, the performance of initial job interviews, and even the assessment of a candidate’s likely fit with the existing team through a comparison of criteria of the applicant with respective criteria of current employees. Outside of the recruitment area, AI is used to plan day-to-day tasks of employees; for example, the preparation of shift plans, or the calculation of the best delivery route for the day. Given the current pace of development, it is easy to predict that additional and even more advanced technologies will be introduced soon. Respectively, the use of AI will become more and more important for companies to gain and maintain a competitive advantage. Against this background, it is ever more important for employers to know and understand legislative restrictions regarding the use of AI.

From a German law perspective, there are at least two aspects which need to be distinguished: The independent use of AI by employees at the workplace and the introduction of AI for the employees’ use by the employer. This post will provide a short overview of some relevant legal aspects of both scenarios under German law.

Independent use of AI by employees

Given the wide range of possible use cases of AI at the workplace, employees in all areas could be tempted to use AI to facilitate their day-to-day tasks without the explicit knowledge of their employer. Against this background, employers are well advised to set up guidelines and rules for the use of AI by employees at the workplace. Respective policies could either prohibit the use of publicly available AI programs for all work-related purposes. If employees are supposed to be allowed to use AI for work-related purposes, the policy should provide instructions on which AI programs can be used, the kinds of tasks the programs can be used for and most importantly the terms and conditions under which the programs should be used. In particular, the employees’ obligations when using AI for work-related purposes should include a tight review process by the employees, the protection of confidential information, but also the employees’ obligation to inform the responsible manager about the fact that a certain work product was produced, or a task was performed with the help of AI.

From a legal perspective, depending on the individual content of such policy, directing employees on the use of AI should generally be covered by the employer’s right of direction according to Sec. 106 Trade, Commerce, and Industry Regulation Act (Gewerbeordnung, GewO). This would have the result, that even if a works council is established, the direction on the use of AI could be issued and changed unilaterally by the employer, typically by way of a company policy. This allows for the necessary flexibility of the employer to be able to adapt to the changing environment and technical developments in the field of AI. As the (non-)applicability of a co-determination right of the works council could depend on details of the given directions, such policy should be reviewed by legal counsel prior to its implementation.

Introduction of AI by the employer

Given the potential to increase efficiency and therefore to reduce costs, in many cases it is the initiative of the employer to implement the use of AI into the operations of the company. If a works council exists at the affected establishment, the implementation of AI is very likely subject to the co-determination of the works council according to Sec. 87 Works Constitution Act (Betriebsverfassungsgesetz, BetrVG). This means that the introduction of the AI system is subject to the negotiation and conclusion of a works agreement. Depending on the level of concerns of the works council, such negotiations can be lengthy. To avoid protracted discussions, it is often helpful to provide the works council with sufficient information on the use and potential but also the risks of the intended AI system.

Apart from this long-established co-determination right, a recent change of the BetrVG has brought additional clarifications on the rights of the works council regarding AI. Specifically, the legislator has clarified that the works council is to be notified about and consulted with if the employer plans to introduce AI. This entitlement takes effect already at an early stage so that the works council can influence the decision-making process of the employer. Furthermore, Sec. 80 BetrVG now clarifies that the works council is entitled to call upon the advice of an expert when the works council is required to assess questions related to AI. While the expert needs to be selected consensually by the employer and the works council, the costs for the expert are born by the employer. As in many cases a well-informed works council facilitates negotiations for a works agreement, these additional costs are often well spent, particularly if the parties engage an expert who can explain the chances and risks of AI in a neutral and understandable way. Finally, the consent of the works council is required if AI is used for setting up guidelines for the selection of employees for recruitment, transfer, regrading, and dismissal.

Please reach out to us should you have any questions on the implementation of AI under German employment law. We are happy to assist.

For further and cross-practice information on AI in the Entertainment and Media sector, please refer to the Reed Smith Entertainment and Media Guide to Artificial Intelligence which can be found here.

The Labour party is considering a proposal to introduce a “right to disconnect” (a so-called right to switch off) if it wins the next general election. It follows an increasing trend since 2017, especially across Europe, of introducing restrictions on employers contacting workers outside normal working hours or protecting employees who choose not to engage with their bosses during such hours.

The rationale for the right to switch off

Recent studies have shown some support amongst workers for a right to disconnect in the UK, especially following the pandemic. COVID lockdowns resulted in many workers having greater access to digital tools (work phones, laptops, apps, etc.) which allowed them to work from home for extended periods for the first time. This flexibility, at least in part for most workers, looks set to stay. Whilst some workers welcome the flexibility, others cite concerns that the line between home life and their work life has become more blurred, and now that they are accessible to their employer outside normal working hours, there is a heightened expectation that they will engage with work outside these hours. Labour says that the right to switch off is needed to ensure that homes don’t turn into “24/7 offices”. The proposal forms part of Labour’s “New Deal for Working People” and is currently being considered by the party’s national policy forum this summer ahead of preparations for its next manifesto.

Labour is not the first party to consider this right. The right to disconnect is starting to receive greater recognition, particularly in Europe. For example, in December 2022, the Scottish government agreed to a right to for civil servants to disconnect from work outside normal working hours without being penalised or pressurised to routinely work outside these hours. Ireland’s Workplace Relations Commission has issued a Code of Practice on the Right to Disconnect. Countries such as France, Belgium and Italy have also implemented laws providing for some form of switch off right, in some cases with penalties imposed on companies which fail to comply.

What is the current position under English law?

Whilst some businesses are proactively implementing policies around disconnecting or not contacting workers outside working hours on an informal basis or as part of welfare and wellness programmes, there isn’t currently a formal legal right to disconnect from work in England and Wales.

The Working Time Regulations 1998 set limits on the number of hours per day/week that a worker can work, as well as provisions for adequate rest breaks and holiday entitlements. This includes a limit of an average of 48 hours per week as well as 11 hours’ uninterrupted rest per day and 24 hours’ uninterrupted rest per week. Employers can face fines, compensation payments and, in the most serious cases, criminal convictions for non-compliance where these limits aren’t met.

There are also regulatory requirements for employers to safeguard health and safety at work, including their workers’ mental health. In recent years (particularly post-pandemic), there has also been an increased expectation that employers will more proactively consider the impact of work on their workers’ mental health. In this context, it is widely accepted that having adequate and uninterrupted rest breaks is important.

However some, including the Labour party, have cited concerns that these protections don’t go far enough.

What could the right to switch off look like?

Labour hasn’t yet announced details about how it would implement this right and what it would look like in practice. We don’t yet know whether or not all employers will be affected (or only those of a certain size), whether or not the right will impose active obligations on affected employers, whether or not it will be enforced in practice – and if so how, or what (if any) remedies will be available to employees.

Labour says it is considering options and learning lessons from other jurisdictions where this right has been introduced. So how have other jurisdictions addressed this issue? Some examples include:

  • Restrictions on workers routinely being asked to perform work or being contacted outside normal working hours.
  • Right for employees to not use “digital tools” outside working hours and protection from dismissal or other detrimental treatment for those who do not respond outside working hours.
  • Requirement for employers to introduce a policy on the right to disconnect, including setting out their expectations for the use of digital tools in a way which safeguards rest breaks and holiday, opportunities for training and raising awareness about the right to disconnect and how properly switching off will be monitored.
  • Requirement for employers to actively engage with employees and/or unions on how the right to disconnect can be implemented in their sector/organisation.

Further details, including whether the right is likely to form part of the Labour party’s manifesto, are expected later this year.

Over the past several years, a growing number of businesses that utilize delivery drivers have begun installing dashcam and similar surveillance technologies in their vehicles. This is for a host of a reasons, including to protect employee and customer safety, ensure driver efficiency, and monitor vehicle location. In response, the National Labor Relations Board (NLRB or the Board) has issued a string of guidance addressing the interplay between workplace surveillance technology and worker rights under the National Labor Relations Act (NLRA or the Act).

By way of background, in an October 31, 2022 memorandum (the “Memorandum”), NLRB General Counsel Jennifer Abruzzo (the “General Counsel”) urged the Board to adopt strict standards with respect to workplace surveillance technologies. The Memorandum opines that employers’ rights “to oversee and manage [their] operations with new technologies [are] ‘not unlimited.” The General Counsel then proposed that the NLRB adopt an expansive, labor-friendly standard under which employers are found to have presumptively violated the Act when “surveillance and management practices, viewed as a whole, would tend to interfere with or prevent a reasonable employee from engaging in activity protected by the Act.”

Unfortunately, the Memorandum is light on clarity. A separate, more recent memorandum issued by the NLRB’s Division of Advice (DoA), however, provides insight into how the agency may analyze the use of dashboard cameras in company vehicles going forward.

To that end, in an April 3, 2023 memorandum, DoA directed an NLRB regional director to not bring a case against a company that was alleged to have interfered with workers’ rights under the Act by installing, in its delivery vehicles, dashboard cameras that captured video snippets of 10-20 seconds whenever the camera detected unsafe driving incidents. In finding that the employer’s installation of such cameras did not “tend to interfere with or prevent a reasonable employee from engaging in protected activity”, DoA considered several factors. First, DoA found that use of the cameras was narrowly tailored to a legitimate business need – namely, because the employer’s insurance broker had suggested it do so. Second, the employer disclosed the use of the cameras to employees, including its reasons for doing so and how it would store and use the information obtained. And third and finally, the DoA found probative the fact that employees had the ability to turn off the inward-facing cameras.

In light of the above, employers hoping to install dashboard cameras should: (1) determine the business reasons supporting the use of the technology and clearly articulate these reasons in a written policy; (2) disclose the use of the technology to employees, including the reasons for doing so and how data will be collected, stored, and used; and (3) document communications relating to the adoption, implementation, and disclosure of the technology.

Today, the U.S. Supreme Court published its opinion in the cases challenging University of Carolina (UNC) and Harvard’s race-conscious admissions practices. The decision came down as predicted: UNC and Harvard’s use of race as a factor in college and university admissions is unconstitutional.

In the coming months there will be many questions and this alert is meant to address some of the most pressing issues.

Read more Here

Earlier today the United States Supreme Court released a unanimous opinion in Groff v. DeJoy, Postmaster General, No. 22-174, clarifying the “undue burden” standard under applicable to religious accommodations under Title VII after nearly 50 years. Specifically, the Court held that Title VII requires an employer who denies a religious accommodation to show that the burden of granting an accommodation would result in “substantial increased costs in relation to the conduct of its particular business.” This raises the standard applicable from the previous, long established “more than a de minimis cost” standard. Going forward, employers must be aware of the heightened standard for defending against claims for religious discrimination involving failure to accommodate under Title VII.

In the case before the Court, Gerald Groff, a former employee of the United States Postal Service (USPS), sued under Title VII of the Civil Rights Act of 1964, alleging that the USPS failed to accommodate his religious observance. Groff had requested to be off on Sundays, his chosen Sabbath. Groff alleged that the USPS could have accommodated his Sunday Sabbath practice “without undue hardship on the conduct of USPS’ business.” The District Court granted summary judgement in favor of the USPS, and the Court of Appeals for the Third Circuit affirmed on appeal, finding that the USPS would have suffered an undue hardship because it would have been required to bear more than a de minimis cost to provide Groff’s religious accommodation. In reaching its decision, the Third Circuit relied on the prior Supreme Court opinion, Trans World Airlines Inc. v. Hardison, 432 U.S. 63. Groff appealed to the Supreme Court.

Under the facts before them, the Supreme Court chose to clarify the contours of Hardison, explaining that Hardison does not compel courts to read the “more than a de minimis cost” as the governing standard. The Court explained that although the Hardison Court stated that an employer who bears more than a de minimis costs suffers an undue hardship, the case cannot be reduced to that one phrase. To the contrary, the Court emphasized how the Hardison Court also described that an accommodation is not required when it entails “substantial . . . costs” or “expenditures.” In support of its opinion, the Court also referred to the statutory text of Title VII, explaining that the text suggests something more severe than a mere de minimis cost.

Lastly, the Groff opinion also clarifies other recurring issues under Title VII. First, the Court explained that Title VII requires an assessment of a possible accommodation’s effect “on the conduct of the employer’s business” and that impacts on coworkers are relevant to the extent that those impacts effect the conduct of the business. Second, for an employer to reasonably accommodate an employee’s religious practice under Title VII, it must do more than simply assess the reasonableness of a particular possible accommodation. An employer must consider other possible options.

Lastly, the Groff opinion also clarifies other recurring issues under Title VII. First, the Court explained that Title VII requires an assessment of a possible accommodation’s effect “on the conduct of the employer’s business” and that impacts on coworkers are relevant to the extent that those impacts effect the conduct of the business. Second, for an employer to reasonably accommodate an employee’s religious practice under Title VII, it must do more than simply asses the reasonableness of a particular possible accommodation. An employer must consider other possible options.

In sum, following Groff, if an employer’s denial of a religious accommodation is challenged, the employer must establish that the burden of granting the religious accommodation would result in substantial increased costs in relation to the conduct of its particular business.

As we previously detailed here, here, and here, over the past few years – but particularly in 2023 – non-compete agreements have come under intense scrutiny from US lawmakers and government regulators. That trend continued Tuesday, with New York State now on the brink of joining California, Oklahoma, and North Dakota as the fourth state to outright ban the use of workplace non-compete agreements.

Specifically, the New York State Assembly on Tuesday approved a bill that would bar an Empire State employer from seeking, requiring, demanding, or accepting a “non-compete agreement” from a “covered individual.” (The State Senate passed the bill earlier this month.) The bill broadly defines these key terms as follows:

  • “Non-compete agreement” means any agreement, or clause contained in any agreement, between an employer and a covered individual that prohibits or restricts such covered individual from obtaining employment, after the conclusion of employment with the employer included as a party to the agreement.
  • “Covered individual” means any other person who, whether or not employed under a contract of employment, performs work or services for another person on such terms and conditions that they are, in relation to that other person, in a position of economic dependence on, and under an obligation to perform duties for, that other person. (Notably, this broad definition appears to encompass both employees and also independent contractors.)

Simply put, if the bill becomes law – more on that below – virtually all post-employment non-compete agreements would be off-limits in New York.

That said, there are a few narrow exceptions to the bill. Namely, the bill would not apply to agreements, or provisions of agreements, (i) that prohibit disclosure of trade secrets or confidential or proprietary client information, (ii) that prohibit solicitation of the employer’s clients about whom the covered individual learned during employment, or (iii) with a covered individual that establishes a fixed term of service, in each case so long as the agreement does not otherwise restriction competition in violation of the bill.

The bill may be more noteworthy for the exceptions that it does not include, however. To that end, while the bill exempts certain client non-solicitation agreements (as noted above), it is silent as to the permissibility of employee non-solicit or no-poach agreements. Likely that issue will therefore need to be addressed by the courts. Additionally, the bill does not include a carveout permitting non-compete agreements in the context of the sale of a business. This is particularly noteworthy because even the US Federal Trade Commission’s (FTC) proposed rule barring non-compete agreements includes such an exception and, also, because New York courts have long treated sale-of-business non-compete agreements more favorably than traditional employer-employee non-competes.

For aggrieved “covered individuals,” the bill provides a private right of action with a two-year statute of limitations running from the latest-to-occur of the date on which (i) the prohibited non-compete agreement was signed, (ii) the covered individual learns of the prohibited non-compete agreement, (iii) the employment or contractual relationship is terminated, or (iv) the employer takes any step to enforce the non-compete agreement. The bill goes on to note that courts will have discretion to void any such non-compete agreement and to order all other appropriate relief, which may include enjoining conduct that violates the bill and awarding lost compensation and reasonable attorneys’ fees and costs. Additionally, the bill would require courts to automatically assess liquidated damages of up to $10,000 against any business found to be in violation.

In terms of next steps, the bill now heads to Governor Kathy Hochul’s desk for signature (and, if signed by the Governor, the bill will take effect 30 days thereafter). As the bill appears to be prospective only, it is unlikely that non-compete agreements entered into prior to the bill’s effective date – assuming it becomes law – would be impacted (as they would under the FTC’s proposed rule).

Reed Smith will continue to keep you apprised of developments regarding this bill.

In December 2021, the New York City Council passed a novel, first-of-its-kind law addressing the use of artificial intelligence – specifically, automated employment decision tools – by businesses to make employment decisions. The law, which has the potential to seismically change how employers approach employment decisions, essentially bars businesses from using automated employment decision tools when making such decisions unless several criteria are first satisfied, including that the tool at issue has undergone an independent bias audit. After multiple delays, city regulators will begin enforcing the law on July 5, 2023. In response to this recent enforcement and the impact it will have on many employers, Reed Smith’s Labor & Employment team has detailed some common FAQs related to the decision.

If you have further questions, contact a member of the Labor & Employment team or the Reed Smith Lawyer with whom you normally work.

Remote inspection of Form I-9 documents is about to become a thing of the past (at least for now). According to a recent Department of Homeland Security (“DHS”) announcement, employers will no longer be allowed to remotely inspect employees’ Form I-9 documents as of July 31, 2023, and employers who remotely inspected employees’ Form I-9 documents during the pandemic will need to re-inspect their physical documents in-person by August 30, 2023.

By way of background, federal law requires employers to complete Form I-9s to verify their employees’ employment eligibility. As part of this, employers are charged with inspecting documents like passports and driver’s licenses to confirm an employee’s identity and authorization to work in the United States. In the past, employers were required to conduct these inspections in-person with physical documents. However, in 2020, bending to the exigencies of the COVID-19 pandemic, the DHS temporarily allowed employers to inspect some employees’ documents remotely.

With the DHS rolling back its flexibilities this summer, employers will not only have to revert to traditional, in-person physical Form I-9 inspection protocols for new hires, but will also have to re-inspect the physical documents, in-person, of any employees whose documents were inspected remotely during the pandemic. Some employers may have employees who are still working remotely or live a considerable distance from the office, making an in-person inspection cumbersome. Fortunately, Form I-9 guidelines allow employers to designate any individual as an authorized representative to perform the in-person document inspection on their behalf, regardless of whether they are affiliated with the employer, although it may be advisable to choose a trusted agent rather than an employee’s friend or family member. The individual simply describes the documents they reviewed and signs a certification as the employer’s authorized representative. The representative does not need to be the same person who performed the remote inspection. It is important to note that an employer remains liable for any violations of the form or verification process when using an authorized representative.

This return to the status quo may itself be temporary, as the DHS published a Notice of Proposed Rulemaking last year which would allow it to authorize alternatives to physical examination, such as remote inspection. The DHS anticipates publishing a Final Rule to implement the proposal.

In light of this development, employers should review their Form I-9 document inspection practices. In particular, employers should ensure that they: (i) are ready for in-person inspection to recommence as of July 31, 2023, to the extent remote onboarding remains in place; (ii) implement processes for the in-person re-inspection of documents for current employees who onboarded remotely during the pandemic; and (iii) inspect the physical documents of those current employees by August 30, 2023.

In an opinion letter published this week, the U.S. Department of Labor’s Wage and Hour Division (“DOL”) clarified how employers should calculate an employee’s Family and Medical Leave Act (“FMLA”) leave entitlement when the leave is taken during a week that includes a holiday.

The FMLA regulations are clear that when an employee takes a full week of FMLA leave, the entire week counts as FMLA leave, regardless of whether or not a holiday falls during that week and whether the employee was scheduled and expected to work on that holiday. The DOL clarified that when an employee takes leave in increments of less than one week, however, the employer must calculate the leave as a proportion of the employee’s actual workweek and if a holiday falls within that week, it may change the calculation.

For example, if an employee normally works 40 hours in a workweek and takes 8 hours of FMLA in a week, then the employee would use 1/5 of a week of FMLA. When a paid holiday falls within the workweek, however, the denominator for purposes of calculating FMLA leave is based on whether the employee was scheduled and expected to work on the holiday. If the employee was scheduled and expected to work on the holiday, then the holiday is counted as a regular workday for purposes of the denominator (so for a regular Monday through Friday schedule, the denominator would be 5). In the example above, if the employee took one day of FMLA, then they would have used 1/5 of a week of FMLA. If a holiday falls in that workweek and the employee was not scheduled and expected to work on that holiday, then the holiday is not counted in the calculation, the denominator would be 4, and the employee would have used 1/4 of a week of FMLA.

The same calculation applies if an employee is on a reduced work schedule using FMLA or part of each workday. For example, if an employee took 4 hours of FMLA leave during each 8-hour workday, if a holiday were to fall during the workweek and the employee was not scheduled and expected to work that holiday, then the holiday should not be counted against the employee’s FMLA leave entitlement, and the employee would only be charged with 16 hours of FMLA. The DOL explained that its rationale for this distinction is that when an employee is taking less than a full workweek of leave, the employee’s FMLA leave entitlement should only be diminished by the amount of leave the employee actually takes.

Employers should review their FMLA leave calculation practices to ensure they follow the DOL’s guidance. If you have questions on this update, need assistance developing leave policies and procedures, or have other questions regarding your workforce, please contact Betty Graumlich at, Noah Oberlander at, or the Reed Smith lawyer with whom you normally work.

The General Counsel for the National Labor Relations Board (“NLRB”) issued a landmark memorandum yesterday broadly opining that most non-compete agreements violate Section 7 of the National Labor Relations Act (“NLRA”) and directing the NLRB’s various regions to make challenging overbroad non-compete agreements an enforcement priority. After the NLRB’s sweeping decision this February in McLaren Macomb holding non-disparagement and confidentiality provisions in severance agreements are unlawful, the General Counsel then issued a guidance memorandum in March on McLaren Macomb that also signaled it was exploring whether non-compete, non-solicitation, and no poaching clauses also infringed on Section 7. Notably, yesterday’s memo argues its expansion to non-compete restrictions is specifically based, in part, on the NLRB’s McLaren Macomb decision.

In yesterday’s memo, the agency’s General Counsel seeks to upend longstanding precedent by opining that non-compete restrictions are overbroad and generally tend to chill employee Section 7 rights, unless narrowly tailored to address special circumstances justifying the infringement on employee rights. Specifically, the General Counsel identified five areas where employee Section 7 rights may be chilled: (1) concertedly threatening to resign to demand better working conditions, (2) carrying out on that threat, (3) concertedly seeking or accepting employment with a local competitor to obtain better working conditions, (4) soliciting co-workers to go to work for a local competitor as part of a protected concerted activity, and (5) seeking employment, at least in part, to specifically engage in protected activity with other workers.

The General Counsel argues that while an employer may have a legitimate business interest in a non-compete restriction, those interests are likely not reasonable for low-wage or middle-wage workers who lack access to trade secrets or other protectable interests. Nonetheless, the General Counsel indicates that there are certain narrow circumstances where non-compete restrictions may still be acceptable, for example, where the restriction limits the employee from being an owner or manager in a competing business, or where tailored to special circumstances for that specific employee.

The General Counsel’s memo is the second major attack by the federal government this year on the use of non-compete agreements in the United States. In January, the U.S. Federal Trade Commission (“FTC”) made waves by proposing a new regulatory rule that would bar virtually all non-compete agreements in the United States.

It is important to bear in mind the memo does not have the force of law and the NLRB has not yet adopted the expansive position taken by the General Counsel. That said, the memo does signal a significant shift in the General Counsel’s enforcement priorities. Notably, the General Counsel indicates their office has urged and will continue to urge the NLRB to adopt this position. While any type of ruling from the NLRB would likely only cover “employees” as defined by the NLRA, which excludes certain supervisors and managers, independent contractors, public sector employees, and some workers in other discrete categories, defining which employees are covered is not always easy.

In light of these developments and the frequently changing legal landscape for restrictive covenants under both federal and state law, employers should re-evaluate their restrictive covenant agreements and practices. If you have any questions on this announcement, need assistance developing policies and procedures to adjust for such changes, or have other questions regarding your workforce, please contact Betty Graumlich at, Mark Goldstein at, Noah Oberlander at, or the Reed Smith lawyer with whom you normally work.