Many individuals are familiar with online video games, such as FIFA, Minecraft, Fortnite, and Last of Us that permit players to play and communicate with others online while seated at their Xbox or PlayStation consoles.

Augmented Realty (AR) games, such as Pokémon-GO, superimpose a digital setting into the players’ own real environment, thereby incorporating virtual components into the real world and increasing the level of physical activity.

With the advent of virtual reality (VR) games, increasing numbers of players can now interact online to play games in a digital environment called a “metaverse.” VR headsets allow the players to immerse themselves in the digital environment, divorced from the tangible, natural world. AR and VR technology is rapidly developing beyond the gaming applications to internal and external business applications.

Will AR and VR experiences become mainstream, transforming the way individuals engage in not only recreational activities but also workplace environments?

Spoiler alert: it has already begun.

It’s been reported that corporations are utilizing virtual worlds for recruitment purposes, internal team meetings, and conferences. Imagine attending a conference and meeting colleagues in virtual exotic places, such as the digital French Polynesia or Swiss Alps. You will attend, of course, as your avatar, while you are physically located in your home wearing your VR headset.

Perhaps, for an even more immersive experience, you don a haptic vest and gloves, allowing you to “feel” the experience in the virtual world. Whether or not you are ready to embrace virtual reality in this broader sense, companies like Meta Platforms, Inc. (Meta), Microsoft, Apple, and Google are innovating virtuality into reality and creating immersive digital environments.

As Technology Expands the Workplace, Employer Risks Expand

Before you go too far down a virtual rabbit hole, let’s discuss the reality of interacting with others in a virtual world.

In reality, employers and employees navigate numerous human resource issues arising from behavior that is unlawful and exposes employers to significant monetary damages, low morale, and loss of productivity. Although the #Metoo movement revealed the pervasiveness and severity of sexual harassment in and out of the workplace, sexual harassment persists in the traditional workplace. Existing technology has created more spaces in which workplace sexual harassment can occur.

Workplace cyberbullying conducted through online bulletin boards, text messaging, and social media has been the impetus of sexual harassment claims resulting in employer liability for class-based hostile work environments. Evidence of sexual harassment in online employer forums also has been used as evidence probative of sexual harassment in the employer’s workplace.

As technology has expanded the boundaries of the employment relationship beyond the traditional physical workplace, employer liability for unlawful conduct related to the workplace has also expanded.

There is zero probability that a virtual world would be immune from the employment discrimination risks that exist in traditional workplaces, since individuals act and speak via personal avatars in virtual worlds. Indeed, the same bullying, harassment, and unlawful discriminatory speech that exists in reality is mirrored in online activities, as reported by the Center for Countering Digital Hate, and as experienced by a beta-tester for Meta who reportedly was groped by a gang of male avatars and subjected to sexually harassing comments in the metaverse. The beta-tester described the experience as shocking and offensive, causing her to suffer anxiety. The statement describing the experience is not a surprising revelation, since the object of virtual reality is to provide an experience that parallels reality.

A Hypothetical Example of Sexual Harassment in the Metaverse

Consider a scenario in which an employer uses a virtual platform for training purposes. One employee’s avatar (harasser) persistently makes offensive and harassing or derogatory statements to a female colleague’s avatar in an employer forum, or even touches the female colleague’s avatar in a way that is offensive and sexual in nature.

The harasser continues the harassment outside of the virtual workplace by sending the employee unwelcomed offensive emails and text messages. The conduct in the virtual workplace was witnessed by other employees, including supervisors. The female employee reports the conduct to her supervisor. The conduct continues, the female employee is not informed of any actions taken to address the conduct, and she sues the employer.

Can the employer be held liable for sexual harassment?

Yes. To avoid liability, the employer must take several actions, beginning with the supervisor who is obliged to report the complaint to the appropriate Human Resources Department and support the investigation of the complaint. The conduct is offensive, sexual in nature, and has spilled into other electronic communication platforms. Consequently, the conduct appears to constitute legally actionable sexual harassment.

At a minimum, the ancillary electronic communication, if determined to occur outside of the workplace, is probative of the sexual harassment that occurred in the virtual workplace. To the extent the employer fails to use reasonable care to investigate the complaint and promptly correct the harassment, the employer will be deprived of the defense that it conducted a prompt investigation and took appropriate disciplinary action.

Employment Laws are Adaptable to Behavior in Digital Workplaces

As employment laws have adapted to confront online harassment and cyberbullying, they will also adapt to address employment issues in virtual workplaces. Some will assert that sexual assault cannot occur in a virtual environment because an individual’s physical body has not been touched, and the individual has the option of leaving the metaverse or initiating a safety protocol that shields them from aggression and harassment.

The environment may be fictional, but the conduct is not.

Notably, the absence of actual touching is immaterial to a claim of sexual harassment. Being subjected to verbal derision and offensive comments based on a protected characteristic such as sex in an employment context is unlawful. It should be incumbent on developers to provide safety features that protect players from offensive, unwelcome behavior. Such safeguards, though, would not insulate employers from liability. Employers must discipline bad actors who disrupt virtual workplaces and violate company policies and employment laws, just as in the physical workplace.

This nascent stage of the metaverse presents an opportunity for employers and their legal counsel to consider the optimum opportunities the metaverse presents in the context of employment and the workplace.

Is the metaverse a good substitute for in-person team-building exercises or for facilitating corporate culture? Under what circumstances should the metaverse be the preferred forum for conferences?

Or, is the best use of the metaverse in the employment context one that is more limited, such as to facilitate simulations for job specific purposes related to planning the design of physical structures or environments, to test processes and seek solutions for operational challenges, or to facilitate training on techniques and procedures that improve outcomes?

Identifying the optimal use of the metaverse in the employment context may be the first step in preventing a new forum for familiar unlawful behaviors.

Conclusion: Employees Must Be Secure in Every Environment

Doubtless, the introduction of AR and VR applications into the work environment present an immense opportunity to innovate and improve products and services.

To the extent these applications place employees in virtual worlds, employers have the responsibility to ensure their employees are secure and not subject to unlawful harassment, as well as the responsibility to appropriately address incidents when they arise.

Employers may also do well to consider providing training to their employees on the topic of virtual workplace conduct before utilizing AR or VR applications for work purposes, and updating their handbooks and policies to incorporate language related to the use of AR and VR applications.

This article was originally published on the State Bar of Wisconsin’s Labor & Employment Law Section Blog. Visit the State Bar sections or the Labor & Employment Law Section webpages to learn more about the benefits of section membership.