What employers can learn from Kaiser Permanente’s AI labor deal

Artificial intelligence is helping healthcare companies streamline the daily grind, from automating paperwork to improving medical imaging and diagnostics. These changes, however, will inevitably cause disruption for human workers. How can the humans who are already doing the work have a say in how the technology is selected and used?

That was the crux of labor AI contract negotiations that took place in 2025 between healthcare giant Kaiser Permanente and the Alliance of Health Care Unions, which represents 62,000 nurses, technicians, and other healthcare workers. The result was the first comprehensive agreement by a major U.S. healthcare employer and its unions to incorporate worker input into every stage of decision-making around how AI will be developed and used, from identifying problems to designing tools and training employees.

Lessons from the negotiation process are summarized in a new report from MIT Sloan School of Management professors Thomas Kochan and Erin Kelly, and Arrow Minster, PhD ’24, an assistant professor at San Francisco State University. “Negotiating to Work in Partnership on AI: The 2025 Agreement Between Kaiser Permanente and the Alliance of Health Care Unions” documents the ways in which the two parties were able to come to an agreement. 

The deal has implications for other employers introducing AI into the workplace, the researchers explain, as unions across sectors seek agreements on AI. In hospitality, for example, UNITE HERE has signed contracts with major hotel and casino operators, and in entertainment, the Screen Actors Guild-American Federation of Television and Radio Artists and the Writers Guild of America hammered out agreements with the Alliance of Motion Picture and Television Producers. 

“Judging from the attention the labor movement is now giving to these [AI] issues, this list is likely to continue to grow in the years ahead,” the researchers write. 

AI’s role as a pivotal issue

In 2024, as Kaiser Permanente and the Alliance of Health Care Unions started preparing for the regularly scheduled contract renewal process, AI began to emerge as a major point of focus. By the time formal negotiations opened in May 2025, AI had already been mutually recognized as a priority that should be discussed collaboratively rather than adversarially.

Here’s how negotiators reached a compromise. 

Both parties met for discussion before the actual negotiations began. About 300 Alliance leaders and 80 KP leaders showed up for a joint pre-bargaining conference in February 2025 so that each side could hear the other’s expectations. Employees said they feared for their jobs; many wanted a say in what came next regarding AI. Both parties leaned on interest-based bargaining to find common ground before getting to the harder challenges, such as trying to define what early involvement from workers would really mean.

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They paired top-down oversight with bottom-up strategies. Rather than attempting to control all AI decisions through a single executive committee, KP and union leadership developed a two-party model combining top-down and bottom-up strategies.

• The newly created AI Task Force will oversee systemwide initiatives, guide training and communications, and evaluate whether the agreement is working on a national level. The group comprises 10 senior leadership members (five from labor and five from KP) who have direct decision-making authority over technology investments.
• Meanwhile, KP’s network of more than 3,500 unit-based teams (comprising front-line groups of workers, managers, and doctors) will be on the lookout for areas where AI can help. Innovation training will be provided so that these teams can identify issues where AI can enhance workflow or the patient experience on the front lines. 
• KP will also upgrade its internal project-tracking system to keep insights visible across the organization.

Front-line union reps created trust. Preexisting relationships between union reps and front-line workers were valuable in cultivating trust and moving contract negotiations forward. 

• Union reps offered ongoing reassurance about AI governance and strategy to front-line workers. KP and union management explicitly recognized this as pivotal to getting buy-in on new tools.
• Union reps agreed to train a cadre of peer advisers — coworkers who would first learn how to use the AI tools and then help colleagues adapt. This process came directly from KP’s rollout of electronic medical records two decades earlier, where union members who were trained on the new systems became go-to resources for others struggling with the transition. 
• Union reps also brought worker stories into the bargaining room, repeatedly sharing concrete examples of past technology rollouts that had ignored front-line needs. They requested comprehensive inventories of existing AI tools and asked for documentation on how AI was being used in hiring, performance monitoring, and other HR functions. 

Communication made the difference

Ultimately, success in contract negotiations over AI’s role in the workplace came down to good communication. Union reps were able to create trust through existing relationships with workers, as were peer advisers who learned the AI tools and then shared their knowledge. 

In addition, it helped to have 300 union leaders and 80 KP leaders discussing their expectations before official negotiations even began. 

While it’s common for companies to select or build AI technology first and roll it out to employees later, KP and the Alliance of Health Care Unions were able to find success by doing the opposite: starting with communication, then implementing the technology. 

“The parties engaged in genuine dialogue and learning, gained a deep understanding of each other’s perspectives, and demonstrated mutual respect,” the authors write. “This could not have been achieved through traditional position-based negotiations.”

Erin Kelly is the Sloan Distinguished Professor of Work and Organization Studies at the MIT Sloan School of Management, where she is co-director of the MIT Institute for Work and Employment Research.

Thomas Kochan is the George Maverick Bunker Professor of Management, Emeritus at MIT Sloan and IWER. He is a co-author of the book “Healing Together: The Labor-Management Partnership at Kaiser Permanente” (Cornell University Press, 2009).

Arrow Minster is an assistant professor of management at the Lam Family College of Business at San Francisco State University.