Radio Frequency Identification (RFID), Global Positioning Systems (GPS), and Event Data Recorders (EDR) are all on the verge of becoming part of daily life -- outside the workplace. Wal-Mart, and other major corporations, including Proctor & Gamble, IBM, and United Parcel Service, are working towards the eventual replacement of the omnipresent barcode by RFID, a computer chip that transmits a unique radio signal identifier. Wireless companies are installing GPS technology, microwave transmitters that permit satellites to develop a record of location, date and time, in new cell phones. And, EDRs, better known as the black boxes sought after every air crash, are being installed in many late model cars and trucks to help reconstruct accidents.

While these technologies were developed and first implemented for purposes unrelated to work, employers are discovering work-related uses for each of them. Most dramatically, the Attorney General of Mexico recently announced that he and more than 100 of his employees had an RFID chip, which is the size of a grain of rice, injected under the skin so that they could be tracked if kidnapped by one of Mexico’s drug cartels.

Employers, particularly those with large fleets of vehicles, are finding more mundane uses for GPS. The technology permits businesses to track not just employee location, but also rates of speed and the amount of time that a vehicle is at rest. Police departments have used the information generated by this technology to discipline police officers dawdling at lunch when they were supposed to be on patrol. Other employers have used location information to reduce insurance rates, workers’ compensation costs and overtime payments.

Employers who consider implementing location-based technology must balance the technology’s potential benefits against employees’ visceral sense that their privacy is being invaded. Nurses at a northern California hospital recently protested when they learned that infrared technology installed to allow patients to locate their nurse at all times also permitted the nurses’ supervisor to track their movements throughout their shift. The nurses complained that they felt like prisoners ordered to wear tracking bracelets. Most segments of the trucking industry are aligned against a plan by the Federal Motor Carrier Safety Administration to mandate black boxes in more than 4 million freight-hauling trucks to monitor the amount of time truckers spend behind the wheel. One industry representative recoiled at the idea of a “babysitter” under his hood, telling him when to go to sleep.

Despite employee complaints and the potential for abuse, location tracking by private employers is almost completely unregulated. For example, California’s law prohibiting the installation of location tracking equipment on motor vehicles, one of the few state laws addressing the topic, does not apply when a vehicle’s owner, renter, or lessor places the device on its own vehicle. In light of this legislative vacuum, some unions have made the employers’ use of location-based technologies a subject of collective bargaining. As a result, some collective bargaining agreements now bar the employer from using location information for disciplinary purposes.

With few restrictions on the workplace use of location-based technology in place, employers have a substantial degree of freedom when using the technology. Nonetheless, effective implementation of location-based technology requires employers to take into account, and address in a policy, their employees’ legitimate concerns over the technology’s potential misuse and intrusiveness. Some of the steps employers can take to prevent employee backlash, include the following:

• Only track employees where there is a legitimate business reason for doing so, such as to manage a fleet of vehicles efficiently or to allocate service personnel to meet the varying needs of a specific geographic region.
  
• Communicate the business reasons for the tracking to the employees who will be monitored, explain the self-imposed restrictions on monitoring intended to limit its intrusiveness, and discuss the potential hidden benefits of the technology to employees. Hidden benefits might include the ability to exculpate employees wrongly accused of speeding or to confirm service visits where a customer cannot, thereby ensuring that the employee receives credit for completed work.
  
  
• Restrict location tracking to work hours. Monitoring employees when off-duty is unnecessary and could be the source of lawsuits in jurisdictions that restrict an employer’s ability to take adverse action against employees based upon their non-work conduct.
  
  
• If employee-provided equipment, such as cell phones, will be used to track location, the employer should obtain written consent before doing so.
  
  
• If a third-party service provider will store the location and other information generated by the monitoring, the service contract should prohibit any use or disclosure of that information without the employer’s consent or other than for the employer’s purposes. The employer does not want the service provider to use the data to market its own products to the employer’s workforce or to sell the information to others who will do the marketing.

While, at least for now, employers generally are free to implement location-based tracking as they see fit, the environment could swiftly change as legislators, unions and the plaintiff’s bar respond to abuse. Rather than being the target of the first lawsuit challenging location tracking in the workplace, employers should respect the privacy concerns of their workforce when seeking to reap the benefits of a technology whose full benefits for employers remains unexplored.