March 16, 2020

Legal Implications of Wearables in the Construction Industry

Jessica Courtway

Technological advances over the past two decades have drastically altered nearly every aspect of day-to-day life.  Unsurprisingly, sophisticated technologies like wearables have made their way into the construction industry.  This type of new technology promises to shape the construction industry’s efficiency and safety standards as they are currently known.

In an industry as competitive as construction, keeping up to date on the latest technological offerings can be critically important.  Equally important, however, is understanding the risks and liabilities associated with each new development.  The purpose of this article is to provide an overview of the risks and challenges associated and presented by the rising use of wearables in the construction industry.

Wearables Defined

While there is no universally agreed-upon definition of wearable technology, the key elements of wearables are that they:  (1) are carried or worn on—or even embedded in—the person of the user; and (2) track and store data about the user.  The ways in which wearables measure and monitor the user and their environment are potentially infinite, but the most common sensors employed in wearables include GPS, accelerometers and gyroscopes, electrodes, thermometers, and proximity sensors.  The data from these sensors can in turn be used to measure things such as location, movement, heart rate, and weather.  Many wearables allow the user to interface with them directly, commonly through a touchscreen, speech, or haptic feedback.  Some wearables, however, are purely tracking devices, and the data they gather can only be viewed and analyzed using other devices.

Over 60 million Americans over the age of 18—nearly a quarter of the adult population—are expected to use wearables regularly in 2020.  As the number of people using wearables grows, so too does the sophistication of the wearables themselves.  Wearables are taking hold in the workplace as well, with nearly 70 percent of employers with more than 50 employees offering wellness programs, many of which include wearables as a component.

As wearables are put to increasingly sophisticated uses, commercial applications—ones in which wearables are employed as specialized tools in the company’s core business—are on the rise.  The construction industry is ripe for commercial application of wearables.  Many of the issues that eat up the time and attention of managers in the construction industry—such as safety, personnel management, and compliance—are areas where wearables can shine.  Commonly utilized wearables include the wearable vest with tracking capabilities, fatigue-monitoring hard hats, boots connected to the cloud, and smartwatches designed to measure efficiency and improve safety.  These technologies can detect and warn of safety hazards in dangerous environments, track the whereabouts of personnel at hectic construction sites, and provide reliable, high-quality data that can prove regulatory compliance (and identify areas for improvement). 

Legal Implications

There is also a potential legal upside to wearables.  For example, in an employment-discrimination lawsuit, data gathered for the purpose of tracking and improving productivity could be used to prove that an employee’s firing was indeed justified and not a mere pretext. Similarly, a defendant in a workplace-injury lawsuit could use data from a wearable to tell a different story about an accident than the one contained in the plaintiff’s complaint.

While legal advantages provided by wearables are easy to imagine, so are the potential pitfalls.  For example, what if a worker is injured after relying on a device that failed to detect a hazard?  Or what if an employee misuses the new technology and increases his own risk of injury?  There are many legal issues raised by wearable technology that companies in the construction industry may need to be mindful of.  

Liability for Safety Hazard Detection

The intended effect is that wearables will prevent safety incidents. However, even if the number of accidents decreases overall, what if a wearable—especially one that a worker has come to rely on—fails to detect a safety hazard in a particular instance and an employee is hurt? Will the manufacturer of the wearable device be liable for a failure to detect?  Will the employer be liable?

For these questions, courts typically look to traditional negligence and products liability law to inform on this issue.  For example, does a company impose a duty upon itself to keep safety-critical wearables in good working order when it supplies workers with such devices, even if the law would not impose such a duty independently?  What if the contractor provided the wearable as part of a mandatory uniform that workers were required to purchase? 

Another interesting question in this regard concerns the effect of an employee who receives a warning but fails to act on it.  The Society for Human Resource Management (“SHRM”) has emphasized the importance of uniform policies in order to reduce the potential for liability that may arise from employees who ignore safety warnings.  

Privacy & Data Concerns

In addition to issues related to safety hazard detection, wearables present legal issues related to data and privacy.  Data from wearables could provide actionable insights that can be used to improve productivity, increase efficiency and make changes to the way companies do business to increase their bottom lines.  However, there may be consequences for failing to keep such a large volume of data secure.  As such, the type and amount of data collected by wearables means companies that control said data may expose themselves to liability.

Wearables, especially in the employment context, also create consent issues. Employees, particularly union workers, might not readily accept the company’s mandatory implementation of wearable technology.  However, an employer whose collective bargaining agreement states an intention to continually upgrade and increase its use of technology may be permitted to require union employees to utilize new technologies.  In addition, notifying employees in advance of the implementation of new technologies may vitiate any subsequent violation of privacy claims.  For example, one court has held that because employees belonged to a “closely regulated industry” and had knowledge that a new technology system was collecting data on their on-the-job activities, they had a reason to expect intrusions into their privacy at work. 

Wage & Hour Concerns

A basic use construction companies could have for wearable technology is tracking whether or not employees are working.  This information would be useful in a wage and hour dispute: there would be objective data to either verify or dispute the claims of the company and/or the employee.

However, it is possible that the mere fact that an employee is wearing a wearable could make them “on the clock” for the purposes of wage and hour laws like the Fair Labor Standards Act (“FLSA”).  This is especially true given the consent issues mentioned above, which might render any waiver useless.  The U.S. Department of Labor has described the standard for when employees are “on the clock” under the FLSA as follows:  “In general, ‘hours worked’ includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal activity of the work day to the end of the last principal work activity of the workday.  Also included is any additional time the employee is allowed (i.e., suffered or permitted) to work.”  Counting wearing a wearable as “work” under this standard is a stretch.  However, in states with more employee-friendly wage and hour laws, such as California, mandatory wearable policies may pose a problem.

Conclusion

With the rise of technologies like wearables come unique challenges, potential liabilities, and compliance implications.  Keeping current with the new and emerging technologies is critically important to construction companies to ensure they are on the forefront of innovations of safety and efficiency. 

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Jessica Courtway

Greensfelder, St. Louis, MO, Division 9 (Subcontractors & Suppliers)