CFPB Responds to White House Inquiry Regarding Automated Worker Surveillance

Practical Law Legal Update w-039-9893 (Approx. 5 pages)

CFPB Responds to White House Inquiry Regarding Automated Worker Surveillance

by Practical Law Finance

FCRA’s Protections Regarding the Collection and Sale of Personal Data

The CFPB is concerned about data brokers, data aggregators, and platforms who use newer technologies and novel methods to collect and sell personal data and purport not to be covered by FCRA. As explained in the comment letter, FCRA protections extend to companies that assemble detailed dossiers about consumers and sell this information to those making employment decisions. The CFPB warns that:

Workers are increasingly subject to the collection of information about them through automated workplace surveillance.
Workers cannot prevent this information from being sold to data brokers and therefore eventually being relied upon by financial institutions, insurers, and other employers.
The use of worker surveillance information across all aspects of people's lives may have profound implications for many life decisions extending well beyond the workplace, from renting a home to buying a car.

The CFPB recently launched an inquiry into data brokers and their business practices and is considering whether or not Regulation V, which implements FCRA, requires any amendments (see Legal Updates, CFPB Seeks Information on Data Brokers and Related Business Practices and CFPB Publishes Spring 2023 Regulatory Agenda).

FCRA’s Protections Regarding Hiring and Ongoing Employment.

The CFPB is concerned about companies that offer increasingly invasive worker surveillance products designed to augment employers' decisions about everything from hiring to promotions, reassignment, and retention. The comment letter summarizes FCRA's scope and requirements concerning consumer reporting agencies (CRAs), consumer reports, and the use of information for employment purposes. According to the CFPB, FCRA applies both to information used for the purpose of evaluating a consumer for employment initially and to information used for ongoing employment purposes such as reassignment or retention.

The comment letter lists FCRA's protections for workers, including:

A right of access "to all information in any form which would be relayed to a prospective employer … in making a judgment as to the worthiness of the individual's application".
The right to know what is in their consumer report and dispute incomplete or inaccurate information.
The requirement that CRAs correct or delete inaccurate, incomplete, or unverifiable information, and not report outdated negative information.
Requirements about the use or furnishing of consumer reports for employment purposes, including that companies using a consumer report for employment purposes notify the consumer before taking any adverse action based on the report.

Complaints About CRAs that Provide Information to Employers

The comment letter notes the increasing number of consumer complaints received about companies that provide information to prospective employers, including:

Difficulties in having inaccurate information removed from or corrected on reports.
Inaccurate infraction history (such as misclassified traffic or criminal offenses) appearing on reports.

The CFPB notes that despite regulatory enforcement actions and private litigation, there is pervasive noncompliance among companies that provide information to employers.

Additional Concerns

The comment letter raises additional CFPB concerns, including:

Whether entities offering evolving technologies to employers, including increasingly invasive worker surveillance tools, are complying with applicable law.
The proliferation of the gathering and use of information resulting from worker surveillance technologies, including as a consequence of employers adjusting work schedules and revising workplace norms in the wake of the COVID-19 pandemic.
The fact that automated technologies may produce incomplete or inaccurate information or exacerbate biases.
The growth of new companies mediating and augmenting employers' monitoring of workers through every stage (from recruitment, initial evaluation, and onboarding to productivity monitoring, periodic assessment, and separation) promises to change the nature of employer-worker relations across industries.
As the information gathered grows more invasive, and its use more intertwined with workers' everyday experiences, the risk increases of even more significant harm from inaccurate information (as well as from difficulties in having inaccuracies removed or corrected) having an increasingly detrimental effect on worker's experiences and ability to earn a living.

CFPB Responds to White House Inquiry Regarding Automated Worker Surveillance | Practical Law