New England Biz Law Update
The Consumer Financial Protection Bureau (CFPB) and the National Labor Relations Board (NLRB) have entered into an information sharing agreement to better protect American workers from issues of worker surveillance, data collection, and “employer-driven debt.”
While the two agencies have different missions – the CFPB is tasked with protecting consumers, and the NLRB is charged with protecting labor rights – the agreement is designed to address areas of overlap. Specifically, the collaboration will help address issue such as:
- Employer surveillance and selling personal data: Employers may be using GPS, artificial intelligence, and other surveillance tools to monitor employees outside of work. That information could be used to monitor for union organizing or job-hopping intent. Such data may be sold to other businesses, without the employee’s knowledge or consent.
- Employer-driven debt: This can involve company mandates for an employee to purchase equipment or undergo training that the employee doesn’t need or that could be purchased more affordably in a competitive market.
The agencies will now be able to collaborate by sharing information, cross-training staff, and partnering on investigative efforts.
Gig economy
In announcing the agreement, a statement from the CFPB referred to “practices that harm workers in the ‘gig economy.’” (Gig workers were not mentioned in the NLRB release.)
This passing reference to gig workers — who are typically classified as independent contractors and therefore responsible for their own equipment and training — has put some labor analysts on alert. The Biden administration has already made it clear that it believes gig workers should be afforded protections and allowed to unionize.
Training repayment
Again, in announcing the agreement, CFPB Director Rohit Chopra said the information sharing agreement would support CFPB’s efforts “to end debt traps that stop workers from leaving one job for another.”
While neither announcement mentions training repayment agreements specifically, these arrangements may come under greater scrutiny. Training repayment agreements require the employee to repay the cost of employer-provided training if they leave employment prior to some specified period.
In a CFPB blog post appearing days after the announcement, the agency discussed such repayment agreements under the heading of “employer-driven debt.”
One example included a retailer who required employees to repay between $500 to $5,500 if their employment was voluntarily or involuntarily terminated within two years of completing a training program.
In another, fully licensed nurses were required to complete a company-run training program and would owe $10,000 if they failed to work fulltime following the training.
A March 2022 report from the U.S. Department of the Treasury, “The State of Labor Market Competition,” had also indicated that training repayment agreements are considered restrictive employment agreements. The report compared repayment agreements to non-compete agreements, which the Federal Trade Commission has already proposed banning.
Takeaways for employers
Employers should continue following this issue for further regulatory clarity on employer-driven debt and surveillance.
Overall, be aware that federal agencies are collaborating and targeting issues of worker mobility, workers’ ability to act collectively, and worker misclassification.
Consider the following next steps:
- Monitoring and privacy: Ensure you’re complying with all applicable laws around employee privacy, electronic monitoring and data collection.
- Worker classification: Conduct an audit to determine your risk for worker misclassification.
- Training mandates: Reevaluate any training and equipment mandates, and repayment agreements, to ensure that they are not overly onerous to employees, unnecessary, or unfair when compared to a competitive market. Employers may also wish to strategize around alternate training and recruitment practices should such agreements be curtailed in the future.
