Workforce Bulletin

On July 12, 2024, in a keenly awaited decision, the U.S. District Court for the Northern District of California determined that Workday, Inc. (“Workday”), a provider of AI-infused human resources (HR) software, can be held liable under Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), and the Americans with Disabilities Act (ADA) (collectively the “Anti-Discrimination Laws”) as an agent of the corporate clients that hire Workday to screen and source candidates for employment by utilizing its AI-infused decision-making tools.  In noting that “[d]rawing an artificial distinction between software decisionmakers and human decisionmakers would potentially gut anti-discrimination laws in the modern era,” the court underscored the EEOC’s admonition, which we discussed in our previous post, that employers delegating their hiring protocols to AI must do so cognizant of the potential discriminatory impacts of such use.  See Opinion at 10.  Thus, the court allowed plaintiff Derek Mobley’s disparate impact claim to proceed, finding that Mobley’s allegations supported a plausible inference that Workday’s screening algorithms automatically rejected his applications based on protected characteristics rather than his qualifications.

Prior Proceedings

Mobley filed his initial complaint as a putative class action on February 21, 2023, alleging claims against Workday as an “employment agency” for disparate impact and intentional discrimination under the Anti-Discrimination Laws.  His complaint centered on his allegation that he applied for “at least 80-100 positions that upon information and belief use Workday, Inc. as a screening tool for talent acquisition and/or hiring” and “has been denied employment each and every time.”  Complaint at 10.

Is the developer of an AI resume-screening tool an “employment agency” or “agent” subject to liability under Title VII of the Civil Rights Act for its customers’ allegedly discriminatory employment decisions? According to the United States Equal Employment Opportunity Commission (“EEOC”), the answer is yes. On April 9, 2024, the EEOC filed a motion for leave to file a brief as amicus curiae, together with a brief, in Mobley v. Workday, Inc., Case No. 3:23-cv-00770-RFL, to support plaintiff Derek Mobley’s (“Mobley”) motion to dismiss.

The EEOC’s action is ...