Protecting Digital Personas: A New Frontier in Employment Contracts

The rapidly evolving artificial intelligence landscape is reshaping not only how we work but also how our identities are managed and protected in the workplace. During my recent conversation with Gartner’s Daryl Plummer, he discussed a striking prediction: Licensing and fair use clauses for AI representations of employee personas will be part of 70% of new employee contracts over the next three years.

Personas are more than digital doubles—they represent an employee’s unique cognitive patterns and decision-making processes, enabling organizations to retain a digital version of their workforce long after employees leave. To explore the legal and ethical implications of this phenomenon, I followed up with Kelly Dobbs Bunting, a labor and employment attorney at Greenberg Traurig LLP, who provided insights on how organizations might approach digital personas and the challenges they’ll face along the way.

Persona vs. Avatar

The difference between a persona and an avatar is subtle but profound. A persona captures the deeper layers of an individual—their cognitive processes, decision-making patterns, and unique problem-solving approaches. Think of a persona as the “how” and “why” behind someone’s actions. For example, an AI persona could replicate an executive’s strategic style and leadership priorities, allowing the persona to make decisions that align with the executive’s approach.

In contrast, an avatar is a surface-level representation, reflecting outward traits such as physical appearance, voice, or tone. Avatars mimic the external—what someone says or how they look—without replicating the cognitive essence of how they think or make decisions.

The implications of this distinction are massive. Personas bring extraordinary potential for an organization’s knowledge continuity. They also present far greater ethical and legal challenges because they replicate an individual’s intellectual and emotional identity, not just their physical or verbal characteristics.

Across industries, HR teams will play a vital role in explaining persona-related policies to employees and addressing their concerns.   

AI Personality Replication Is a Research Breakthrough

The technology to replicate personas is no longer speculative—it exists today. Recent research from Stanford University and Google DeepMind achieved 85% accuracy in replicating human decision-making patterns, simply through two-hour conversational interviews. This breakthrough challenges assumptions about how much data is needed to model human behavior and demonstrates the feasibility of creating AI systems that mirror complex cognitive patterns, not just perform tasks.

This advancement lays the groundwork for Gartner’s prediction. The ability to replicate personas makes perpetual fair-use clauses in employment contracts not only plausible but likely. It’s no longer a question of if, but how organizations will implement such practices.

And it’s already happening. In my conversation with Bunting, she shared an example of a client who is creating executive avatars by synthesizing recordings, presentations, and decision-making inputs. These AI-driven avatars allow companies to reuse executive insights for ongoing decision-making, raising immediate legal and ethical questions about ownership, consent, and compensation. This example still represents an avatar—but how far away is a persona?   

Bunting went on to explain that while employee handbooks often include broad acknowledgments of policies, they are typically not legally binding contracts for significant rights waivers. For agreements involving AI-generated personas, organizations would likely need separate, clearly defined contracts or terms of use that provide explicit notice and require voluntary acknowledgment from employees. She noted that these provisions could mirror the style of software agreements, where updates to terms and conditions are common practice, but they would need to meet higher standards of clarity and consent for legal enforceability. This approach reflects a growing trend of embedding complex agreements into onboarding processes, though courts are increasingly scrutinizing these practices.

The Legal Perspective: Contracts, Notice, and Rights

To ground this futuristic vision in today’s legal reality, Bunting explained that while the technology may be new, the legal principles behind it are rooted in long-standing practices. 

“The concept of work-for-hire clauses is already embedded in most executive contracts,” Bunting said. “However, we’re likely to see an expansion of these contracts to explicitly cover AI-generated personas.” 

This shift will likely be influenced by the evolving landscape of biometric privacy laws, state data privacy acts, and potentially even name, image, and likeness (NIL) laws, which collectively regulate how companies collect, store, and use sensitive employee data.

Illinois’ Biometric Information Privacy Act (BIPA) remains the most comprehensive biometric privacy law, requiring explicit consent for the collection of biometric data, such as facial scans or voiceprints. Other states have enacted similar laws, such as Texas’ Capture or Use of Biometric Identifier Act (CUBI), which outlines restrictions and consent requirements for biometric data, and Washington state’s biometric data privacy law, which prohibits the use of biometric identifiers for commercial purposes. Additionally, New York City enforces its Biometric Identifier Information Law, focused on biometric data used within city limits.

Beyond biometric privacy, a growing number of state-level data privacy laws could impact how organizations manage employee personas. The California Consumer Privacy Act (CCPA), amended by the California Privacy Rights Act (CPRA) in 2020, now explicitly includes provisions governing how employers collect and use employee data. Colorado, Connecticut, Delaware, Indiana, Montana, Oregon, Tennessee, and Virginia have enacted data privacy laws as well. While many of these laws primarily apply to consumer data rather than employment practices, the use of personas in the workplace could drive states to expand these regulations to cover employers.

NIL laws, originally designed to allow college athletes to profit from their personal brands, could also offer a pathway for regulating employee personas. Bunting suggested these laws might be extended to include protections for employees, granting them rights over their digital personas and ensuring fair compensation when organizations monetize their intellectual and emotional labor through AI systems. Such extensions would align with the broader push to define cognitive and digital identity rights in the workplace.

As organizations adopt technologies that involve employee-protected data or biometric identifiers, HR teams must work closely with legal departments to ensure compliance with these laws. Proactive engagement with emerging regulations will be critical for avoiding legal pitfalls and fostering employee trust. These legal frameworks, while still evolving, provide a road map for regulating the complexities of managing employee personas in the workplace.

Bunting outlined a phased approach that companies might take to address this shift:

1. Expanded Executive Contracts

At the executive level, contracts are likely to include detailed clauses specifying rights related to AI-generated personas and decision-making matrices.

These clauses may outline ownership, usage rights, and potential compensation for ongoing use after employment ends.

2. Terms of Use (TOU) for Employees

Employees contribute to training enterprise large language models (LLM) through their prompts. Based on Google and Stanford’s research, the idea that these prompts could eventually capture a persona is not far-fetched. Moreover, given the inherent difficulty of removing data from an LLM once it has been incorporated, avoiding the capture of persona data becomes logistically challenging, if not impossible.

It seems likely that for broader employee populations, organizations may introduce software-based TOU agreements during onboarding. These agreements, similar to those used for software licensing, would grant employers rights to employee data that train AI systems, possibly implicitly capturing persona-level cognitive and behavioral patterns.

3. Notice and Consent as Legal Necessities

Transparency will be essential to avoid legal disputes. Employees must be clearly informed about how their data and personas will be used. This aligns with laws such as Illinois’ BIPA, which requires explicit consent for collecting biometric data.

“Notice is key,” Bunting stressed. “Courts look for clear acknowledgment and voluntary consent. Companies will need to provide regular updates and opportunities for employees to understand these agreements.”

HR teams can collaborate with legal departments to ensure clarity and employee buy-in during onboarding, helping to align organizational policies with employee expectations and foster trust.

4. Employee Education and Negotiation

As this technology evolves, companies must educate employees on the implications of these contracts and provide negotiation pathways, especially for those who hold senior roles or have unique skills.

What’s critical is that these contracts won’t just apply to executives. Bunting expects that over time, midlevel managers and even entry-level employees will see similar provisions in their employment agreements. Companies are likely to normalize these practices, much like they have with intellectual property clauses.

We discussed how this rollout might unfold, starting with the C-suite and gradually cascading throughout the organization. Executive contracts could include expanded work-for-hire clauses that explicitly cover AI training and persona usage. For employees, organizations might embed these provisions in onboarding agreements or employee handbooks, likely under the radar of broader scrutiny.

Bunting also pointed out the risks of failing to provide transparency or fair compensation. 

“People sign contracts without fully understanding what they’re agreeing to,” she noted.

This creates a precarious situation where employees unknowingly relinquish rights to their digital selves.

Ultimately, the legal landscape continues to change, but it lags behind the technology. Laws such as BIPA or NIL statutes may provide early frameworks for regulating cognitive and persona data. However, as Bunting cautioned, “It’s going to take lawsuits and legislative action to define these boundaries. Companies that act pre-emptively with transparency and fairness will be better positioned to navigate this uncharted terrain.”

Risks, Benefits, and Employee Advocacy

The potential benefits of digital personas—efficiency, knowledge continuity, and productivity—are clear. For organizations, capturing and replicating an employee’s expertise offers operational advantages, especially in maintaining institutional knowledge. However, these advancements pose significant risks for employees, including privacy violations, ethical misuse, and loss of trust. As Bunting noted, disputes over digital ownership highlight the legal and ethical challenges that could arise with persona rights.

For employees, the ability of enterprise AI systems to capture decision-making patterns and personality traits through prompts raises concerns about ownership and compensation. Once data is integrated into enterprise AI, disentangling it becomes nearly impossible, leaving employees with little control over how their intellectual and emotional contributions are used. Without collective bargaining power, most white-collar workers face an uphill battle in asserting their rights. 

As Nita Farahany, author of The Battle for Your Brain, warns, the rise of technologies capable of replicating cognitive patterns poses profound risks to cognitive liberty—the fundamental right to think freely and protect one’s mental experiences from intrusion. Farahany emphasizes that as AI systems advance, we must establish ethical boundaries to prevent the misuse of these tools. HR leaders have a critical role in ensuring that employee contributions are protected not only from privacy violations but also from undue manipulation or exploitation. Doing so will foster trust and transparency within organizations.

HR leaders often serve as the first line of communication for employees’ concerns about persona-related clauses, making it essential for them to be prepared to address questions and provide clarity. 

Employees should pay careful attention to the digital rights sections of their contracts, particularly as state laws governing biometric data and broader privacy protections evolve. HR leaders must stay ahead of these developments and advocate for policies that align with both ethical standards and emerging regulations.

Bridging Legal Gaps with Organizational Action

For organizations, the current legal uncertainty presents both a risk and an opportunity: to establish themselves as proactive leaders in managing digital personas responsibly.

Organizations might take steps that not only mitigate risks but also foster trust and loyalty among employees. These actions would go beyond legal requirements to address the ethical and operational challenges posed by digital personas:

1. Transparent Persona Policies

Develop and communicate clear policies explaining the use of digital personas. This includes detailing what data will be used, how personas are created, and the specific purposes for their use. Also, provide regular updates to employees about changes in persona policies, ensuring an open feedback channel for questions and concerns.

2. Voluntary Persona Opt-In Programs

Rather than defaulting to persona use, allow employees to opt in to programs that involve persona creation. Offer clear incentives, such as additional compensation or control over how their personas are used.

3. Fair Compensation Models

Establish revenue-sharing agreements for employees whose personas are used beyond their employment. Develop transparent methodologies for valuing cognitive and decision-making contributions to AI systems.

4. Ethical Persona Use Guidelines

Create boundaries for how personas can be used. For example, limit persona use to tasks consistent with the original employee’s role. And prohibit the use of personas in scenarios that could misrepresent or harm the individual’s reputation or values.

5. Employee Persona Portability

Explore mechanisms for employees to retain partial ownership of their personas or transfer them between employers. This would align with emerging discussions around digital identity rights.

6. Internal Persona Oversight Committees

Establish cross-functional teams to review persona-related practices regularly. These teams should include representatives from HR, legal, technology, and employee advocacy groups to ensure balanced oversight.

Organizations must also recognize the dynamic and fragmented landscape of state privacy laws. As biometric and data privacy regulations expand, employers will need to anticipate and adapt to new requirements that may increasingly cover workplace technologies. Building transparent and adaptable policies will help HR leaders foster trust and maintain compliance.

A Call for Collaboration

As AI reshapes the workplace, the line between human and digital identity continues to blur. Plummer’s prediction and Bunting’s insights underscore that this shift is inevitable, though it will unfold unevenly across industries and organizations. Employees and employers alike will soon find themselves negotiating the boundaries of digital persona rights, ownership, and usage. Early adopters may set precedents, but widespread understanding and adoption will take time—and likely involve significant legal challenges.

HR leaders play a vital role as champions of trust and ethical implementation within their organizations, ensuring that employee concerns are heard, rights are protected, and policies are applied transparently and equitably.

What’s clear is that the conversation is just beginning, and the road ahead will be bumpy. Litigation will play a central role in defining the rules, while organizations, employees, and policymakers grapple with complex questions around ethics, autonomy, and fairness. Collaboration across these groups will be essential to ensure that digital personas ultimately serve both organizational success and individual rights, rather than becoming a source of conflict and mistrust.