Jul 28, 2017

Three Square Market, a mid-size technology company headquartered in River Falls, Wisconsin, made national and international news this week when it was announced that, starting August 1, employees can agree to be “microchipped.” You may have had the same reaction many of us did when you first read that sentence: “a microchip? Like the one my dog has?” But the microchip the employees at Three Square Market are signing up for is light years ahead of the ones we use to keep track of our pets – and a lot more controversial too.

The microchips are roughly the size of a grain of rice and will be implanted under the employee’s skin between their thumb and index finger. Employees who wish to participate in the microchipping program must sign an agreement with the employer, which likely includes waivers of employer liability as well as assurances from the employer regarding privacy and data security. Once the microchip is implanted, the employee can execute any task at work requiring RFID technology with simply a swipe of their hand – from simple tasks like entering the front door of the building to paying for food during their lunch break.

So far, at least 50 of the firm’s 80 employees have volunteered for the program.

Regardless of how functional and innovative this technology might be, microchipping employees leads to some very big questions that could have major ramifications for the employer: What are the privacy concerns? Could the microchip be hacked? Could the microchip and, more importantly, the person in whom it has been inserted be tracked? Are there possible health risks to the employee? Without definitive answers to these questions, something that may sound like an innovation could wind up costing the employer a substantial amount of time and money.

The other major issue in this situation is whether an employer who is inclined to go down the microchip road can actually make them mandatory. As of now, there are no laws in Iowa directly addressing this issue, so the answer to this question would be speculative at best. For now, the smartest approach, and the one taken by Three Square Market, is to offer the microchips to employees and have those interested in participating agree to do so via contract.


[1] The specific language of the agreement/waiver/release that must be executed between the employer and employee is not known at this time, as it is an internal corporate document.  However, from a legal standpoint, I find it highly unlikely that Three Square Market’s corporate counsel has not created a document or series of documents that addresses liability issues and privacy concerns that are inherent in this scenario.

Other states, like Arizona, are “right to fire or hire” states. In Arizona, if an employee comes in and submits an application, the employer may require certain things of all employees and, if they say no, there is nothing that would require the employer to hire them. As long as the employer is not hiring/firing based on protected class status (i.e., race, sex, age, religion, disability, etc.), there is no clearly-defined boundaries on what an employer in a state like Arizona could require. So, it is possible that an employer in Arizona could make microchipping mandatory as a term or condition of employment so long as the state legislature does not step in and prohibit such policies.

In the near future, as this technology progresses and employers become more innovative, there will likely be more companies trying to get ahead by utilizing microchip technology with their employees. But as sure as I am that this technology will become more widespread, I am also sure that state legislatures will be studying the issue and preparing to respond. State legislatures across the country will study this issue and will pass laws or amend existing ones to prohibit employers from microchipping employees or at least significantly limiting their ability to do so.

If you have any questions or concerns regarding this new trend or the legal ramifications associated with this issue, please contact Greg T. Usher, attorney at Lynch Dallas, P.C. at gusher@lynchdallas.com or 319-365-9101.


Category: Employment Law

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