Watching the Watchmen
As increasing workplace surveillance creates more corporate controversies, the ICCR’s Nadira Narine calls on investors to put workers’ rights at the top of the engagement agenda.
Excessive workplace surveillance resulted in a €32 million fine for Amazon at the start of this year, after French regulators ruled the use of scanners to monitor “every detail of employees’ quality and productivity” as illegal.
The French Data Protection Agency (CNIL) found that Amazon’s warehouse staff was subject to such intrusive surveillance that they were forced to justify “every break or interruption”.
But workplace surveillance extends beyond warehouse staff and has been on the rise since the Covid-19 pandemic drove millions of employees into remote-working.
Between 2020 and 2022, the number of large employers using tools to track their workers doubled to reach 60% – a figure that is expected to rise to 70% by 2025.
The level of sophistication in the latest technology extends far beyond simply recording how often an individual taps their keyboard or the frequency at which they leave their desk.
The latest AI technology can analyse workers’ facial expressions to assess their interactions with clients, while other firms have used heat-mapping tools to assess where workers might be likely to unionise.
Employers cite meeting health and safety obligations, as well as improving productivity and fulfilling regulatory requirements, as legitimate justifications for workplace monitoring. Yet, there is growing concern that excessive surveillance is harming workers’ wellbeing, increasing staff turnover and leading to counter-productive work behaviours.
The Institute of Public Policy Research says there is now “a real risk of a shift in power away from workers facilitated by the ever-increasing adoption of these new [workplace surveillance] technologies”, calling for greater transparency in how employers are monitoring their workforces.
This view is shared by Nadira Narine, Senior Programme Director at the Interfaith Center on Corporate Responsibility (ICCR) – an ESG-focused coalition of over 300 global institutional investors representing more than US$4 trillion in managed assets.
“We are concerned about workers’ rights violations when technology is deployed to intrusively monitor employees,” said Narine. “This is particularly true in low-wage sectors where the majority of employees are of colour, women or from vulnerable populations.”
These types of employees often have no idea they are being monitored, or are unwilling to say anything about what is happening to them in the workplace, she explained.
Pioneering resolutions
Narine is part of the ICCR’s Advancing Worker Justice programme, which has authored a report on the impact of workplace surveillance that will be published later this year.
In the meantime, the ICCR is using the 2024 proxy-voting season to publicise inappropriate workplace monitoring.
In its 2024 proxy voting guide, the number of shareholder resolutions addressing human and worker rights filed by members of the ICCR collation reached 75 – outnumbering all other focus areas, including climate change.
Of those 75 resolutions, six demanded companies provide an AI transparency report to clarify how they use the technology not only to monitor their employees, but also customers.
The six companies facing AI transparency resolutions this year are Apple, Comcast, Disney, Netflix, United Health and Warner Brothers.
The ICCR says that by addressing the ethical considerations of AI in a transparent manner, companies can build trust among their stakeholders and contribute positively to society. Employees and other stakeholders need to have a voice in how AI technology is incorporated into business operations, it argues.
“This isn’t just about AI – it’s about the entire spectrum of digital technology,” Narine said. “Employers need to understand what they are using and why they are using it. Too often, we see companies put technology and systems in place, but not knowing what [those] can do. They also don’t communicate with staff or shareholders about their use of digital surveillance.”
Narine is especially concerned about the use of AI in companies’ recruitment process – as has been proven to be the case at Amazon – as the technology can be racially biased and is sometimes used to screen out minority applicants.
Recent research revealed that nearly one-fifth (19%) of companies with more than a thousand employees were using AI as part of their recruitment or talent acquisition. In its Responsible AI in Recruitment Guide, the UK government warned that “these technologies pose novel risks, including perpetuating existing biases, digital exclusion, and discriminatory job advertising and targeting”.
“Firms are using this type of technology to hire their workforce, but we know any technology has bias embedded within it,” said Narine. “As a result of these hiring tools, discrimination is coming through. Black and Brown workers are not reaching the next level for an interview because they’re being screened out, and that’s an issue that needs to be redressed.”
Gaining traction
If this year’s result at Netflix’s AGM is anything to go by, resolutions on these issues are gaining traction.
More than two-fifths (43%) of Netflix shareholders demanded the streaming giant produce an AI transparency report. While the resolution did not secure a majority vote, it does indicate widespread concern among investors.
Yet, while the growing prevalence of resolutions demanding AI transparency is a positive development, Narine warns that such reports are largely ineffective unless they are subject to investor scrutiny.
“A lot of investors, especially big investors, rely on what the companies say they are doing,” she said. “They’re not doing their homework and talking to workers and labour unions directly to understand whether their policies match the action on the ground.”
If company policies did match procedures, there would probably be fewer corporate controversies, Narine ventured – citing the example of Dollar General, which this July was forced to make multi-million dollar investments in safety improvements across its stores in the US.
Following an investigation by the US Occupational Safety and Health Administration (OSHA)based on a third-party assessment of safety practices across its business, Dollar General agreed to pay US$12 million in penalties and implement corporate-wide changes that “make the safety of its employees a priority”.
This brought the total amount of fines imposed on Dollar General by the OSHA to date to US$21 million. The investigation followed a multi-year effort from employees, shareholders and workers’ rights organisation Step Up Louisiana – which had long highlighted safety failings – to engage the company on the issue.
“It is all well and good saying you have safety policies, but these need to be verified,” Narine added. “ICCR members filed a shareholder resolution in 2023 demanding an independent third-party audit to look at how Dollar General’s policies and practices were impacting worker safety. It received 68% of the vote.”
The third-party auditor has since performed unannounced compliance audits, compelling Dollar General to create a Safety Operations Center to detect store hazards and support safety performance. The company has also put in place an anonymous hotline for employees and the public to report safety concerns.
“This is a win for worker rights,” said Narine. “Shareholder engagement pushed Dollar General to conduct the audit, and now they are meeting the safety demands that directly square with what workers have been asking for for years.”
However, the significant suffering of Dollar General staff in light of the time taken by the company to implement changes, and its considerable financial losses should stand as a lesson to other businesses that failure to take workers’ rights seriously is a costly and damaging path.
“No matter what the issue – whether it is AI transparency, access to collective bargaining, fair pay – if companies take the time listen to their workers, then a lot of the pain can be avoided,” Narine added.
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