Manage Smarter 289 — Protecting Your Company from AI Risks: Legal Advice from Seth Kugler

HOSTED BY C. LEE SMITH AND AUDREY STRONG
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Seth Kugler, attorney at Grellas Shaw, explains how business leaders can manage AI risk, comply with new AI regulations, and create effective ethical AI policies. Learn about data privacy, anti-​discrimination laws, and best practices for updating your employee handbook. Kugler shares actionable legal strategies to help managers and HR teams protect their company’s reputation and ensure AI compliance.

Seth represents a diverse range of clients across the United States and internationally, handling matters in federal courts nationwide and state courts in California and New York. He is known for his practical, forward-​thinking approach to legal challenges, helping organizations develop responsible AI policies, mitigate liability, and protect their reputations in an era of rapid technological change.

In this podcast for sales managers and executive leadership, Audrey Strong, C. Lee Smith and Seth Kugler help you to answer:

If AI-​generated content harms your reputation, investigate the sources of the misinformation and seek corrections or removal from the originating websites, as direct legal action against AI companies is still a developing area. Seth Kugler suggests that consulting an AI-​savvy attorney is wise, given the rapidly changing landscape of AI and defamation law.

Why is it essential for companies to have an ethical AI policy in place?

Having an ethical AI policy is crucial because companies are increasingly facing lawsuits over the use of AI in employment decisions, especially when AI tools may unintentionally violate anti-​discrimination laws. Seth Kugler emphasizes that without a clear and compliant AI policy, businesses expose themselves to significant legal and reputational risks.

How should companies update their employee handbooks to address AI usage and data security?

Companies should explicitly outline which AI tools are permitted, specify prohibited uses, and detail best practices for prompting and verifying AI outputs to safeguard sensitive data and ensure responsible AI usage. Seth Kugler advised that clear policies and enforcement mechanisms are necessary to prevent unauthorized AI use and potential data breaches.

Conducting thorough anti-​bias testing before deploying AI tools is the best way to protect your company from discrimination claims and comply with evolving state and federal AI laws. Seth Kugler highlighted that proactive testing and documentation can serve as a strong defense if legal challenges arise.

How can business leaders address and repair reputational damage caused by false or outdated AI-​generated information online?

If AI-​generated content harms your reputation, investigate the sources of the misinformation and seek corrections or removal from the originating websites, as direct legal action against AI companies is still a developing area. Seth Kugler suggested that consulting an AI-​savvy attorney is wise, given the rapidly changing landscape of AI and defamation law.

"Shadow AI is a real risk: Employees often use unauthorized AI tools, risking data breaches and policy violations. Make sure your AI policy is clear and enforced."

Seth Kugler

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The contents of this podcast are not a substitute for professional legal advice and are solely the opinions of the guest. Consult with your own counsel on any specific legal matters you may have.

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