Can Your Employees Use ChatGPT at Work?
Legal Risks Every Business Must Know
As artificial intelligence tools like ChatGPT become commonplace in the workplace, businesses are racing to take advantage of new efficiencies. But with that convenience comes risk; especially if employees are using AI tools without formal guidance, oversight, or legal protections in place.
At Buechner Haffer Meyers & Koenig, we help business owners, HR professionals, and leadership teams protect their operations and intellectual property by updating employee handbooks and internal policies for the AI age. Here’s what every company needs to understand before employees start using tools like ChatGPT for work.
The Legal Risks of Using ChatGPT at Work
Whether you run a startup, a growing LLC, or a well-established LLP, letting employees use AI tools unchecked could open your business to serious liabilities.
Loss of Intellectual Property (IP)
When employees input proprietary code, product ideas, or internal documents into ChatGPT or other AI tools, there’s a risk those materials leave the confines of your business. Even if OpenAI (the company behind ChatGPT) states it does not use Pro user data to train its models, the lack of a binding legal agreement can still put your IP in a grey area.
Risk: Trade secrets or confidential processes could be exposed or reused without your control.
Violations of Privacy and Confidentiality
If employees share customer information, financial data, or employee records with ChatGPT, especially in regulated industries, your business could run afoul of:
- GDPR
- HIPAA
- PCI-DSS
- State privacy laws
- Non-disclosure agreements with clients or partners
Risk: You may be liable for data breaches, contractual violations, or regulatory noncompliance.
Inaccurate or Misleading Content
AI tools are powerful, but not perfect. ChatGPT may generate content that sounds accurate but is legally or factually incorrect; this is collequially known as “AI hallucinations.”
Risk: Misuse of AI-generated content in policy, legal analysis, or public communications could lead to reputational damage or poor business decisions.
Shadow IT and Lack of Oversight
When employees use AI tools outside of approved systems (especially free accounts or browser extensions), it creates what’s known as “shadow IT.”
Risk: IT and legal teams lose visibility into what’s being shared, stored, or used—creating a blind spot in your risk management strategy.
What Can Your Business Do?
Here’s what we recommend to protect your company’s interests while allowing responsible AI use:
Review and Update Your Employee Handbook
Make sure your handbook includes clear policies for:
- When and how employees may use AI tools
- Types of data that are never permitted in AI inputs
- The requirement to verify and fact-check AI-generated content
- Disciplinary measures for inappropriate use
Create an AI Acceptable Use Policy
This document should spell out what’s allowed and what isn’t—just like your existing internet or device usage policies.
Train Employees
Educate your team on:
- The limits of AI
- Confidentiality concerns
- Real-world risks from misusing generative tools
Audit and Monitor
Review how third-party contractors, vendors, or even your own teams are using AI. Avoid blind spots and establish review systems.
How BHMK Can Help
At BHMK, we advise businesses of all sizes on:
- Drafting and implementing AI use policies
- Updating employee handbooks to reflect current legal and technological risks
- Conducting internal audits of workplace technology
- Creating policies for third-party and vendor use of AI
- Negotiating enterprise AI contracts with enforceable IP protections
If your employees are using AI, and you don’t have a policy in place, you may already be at risk.
Contact Us Today
Want to protect your business from AI-related risk? Let’s discuss your policies, processes, and protections. Our business employee attorneys are ready to help you update your employee handbook and prepare for the evolving workplace.
Schedule a consultation or call (513) 579-1500.
