Examining the Application of Anti-Discrimination Laws to the Use of AI Technology

By: Ellen M. Taylor, SLOAN SAKAI YEUNG & WONG LLP

THIS ARTICLE ADDRESSES THE BROAD SCOPE OF artificial intelligence (AI) laws in the United States that focus on mitigating risk. 

AI-driven employment screening software is often marketed as a way to improve efficiency and eliminate or reduce bias by replacing the human element with automation. However, if it is not carefully designed, implemented, and monitored, this type of software can result in significant legal exposure for employers and vendors.

In Mobley v. Workday, a putative class action filed in the United States District Court for the Northern District of California, an employment applicant alleges that Workday, a human resources management platform, uses algorithmic and AI-driven job candidate-screening tools that resulted in unlawful discrimination against him and other job applicants on the basis of race, age, and disability. Through this lawsuit, the plaintiff is seeking to represent not only himself, but numerous groups of individuals allegedly harmed by biases embedded into Workday’s candidate-screening tools. The class certification hearing in this action is scheduled for January 27, 2026. The conditional class certification hearing, which will occur before the final class certification hearing in this case, is scheduled to take place on April 8, 2025.

Although the plaintiff in this case has not named the employers that he applied to through Workday as defendants, the outcome of this case may impact employers who utilize AI-driven candidate-screening tools. If this case ultimately proceeds to trial and results in a finding that Workday is liable for violating anti-discrimination laws because its software adversely impacted individuals in protected classes, it is likely that some employers who use algorithmic candidate-screening tools will soon face class actions involving similar claims.

Plaintiff’s Allegations

On February 21, 2023, Derek Mobley filed a putative class action complaint against Workday, a vendor that provides human resource management services, including algorithm-based applicant screening services, to thousands of companies, including numerous Fortune 500 firms. Mobley’s initial complaint was dismissed with leave to amend, and he filed an Amended Complaint against Workday on February 20, 2024.

In his First Amended Class Action Complaint (FAC), Mobley alleged that Workday violated Title VII of the Civil Rights Act of 1964, Section 1981 of Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act (ADA), and California’s Fair Employment and Housing Act
(FEHA), because its artificial intelligence-driven algorithm screened out applications on the basis of race, age, and disability. 

According to the FAC, Workday provides “algorithmic decision-making tools” that “determine whether an employer should accept or reject an application for employment.” Mobley alleged that Workday’s tools “offer recommendations that reflect whatever biases employers happen to exhibit” and therefore “[cater] to the prejudicial preferences of the client-employer.”

Mobley claimed he applied for more than one hundred jobs through Workday, but all of his applications were rejected because the algorithm Workday was using to screen applicants dismissed his application on the basis that he is African-American, over the age of 40, and has a disability.

For more details on Mobley's allegations, LexisNexis customers may review the full article in Bender's California Labor & Employment Bulletin, 2024-11 Bender’s California Labor & Employment 01 (2024). Not yet a subscriber? View this bulletin in the LexisNexis Bookstore.

Workday’s Motion to Dismiss the FAC

On March 12, 2024, Workday filed a Motion to Dismiss the FAC, arguing, among other things, that as a software vendor, it is not a covered entity under Title VII, the ADEA, or the ADA and that an employer’s agent cannot be held liable under the anti-discrimination statutes at issue for functions that the agent performs on the employer’s behalf.

The EEOC’s Amicus Brief

On April 9, 2024, the Equal Employment Opportunity Commission (EEOC) submitted an Amicus Brief in opposition to the motion to dismiss. The EEOC’s Amicus Brief argued that Mobley had alleged facts sufficient to support a reasonable inference that Workday is a covered entity under Title VII, the ADA, and the ADEA under the longstanding legal theories that Workday was an employment agency, an indirect employer, and/or an agent of its client-employers.

For details of the EEOC's Amicus Brief, and the court's order related to Workday's Motion to Dismiss, read the full article in article included in Bender’s California Labor & Employment Bulletin, 2024-11 Bender’s California Labor & Employment 01 (2024). Not yet a subscriber? Sample this bulletin by going to the LexisNexis Bookstore. 

Takeaway

The widespread use of robust, AI-driven job candidate-screening tools is still a relatively new development, and the legal framework regulating employers’ use of AI in the workplace is still evolving. However, the court’s rationale in this Order highlights the exposure employers may face if they utilize AI-driven screening software that has a disparate impact on members of protected classes under law.

Ellen M. Taylor is Senior Counsel at Sloan Sakai Yeung & Wong LLP, where she represents employers in labor, employment, and government law matters. She can be reached at etaylor@sloansakai.com.

Subscribers may read the full article, which was initially included in Bender’s California Labor & Employment Bulletin, 2024-11 Bender’s California Labor & Employment 01 (2024). Not yet a subscriber? Sample this bulletin by going to the LexisNexis Bookstore.

Related Content

Sources

See First Amended Class Action Complaint (FAC), Mobley v. Workday, Inc., No. 23-cv-00770-RFL (N.D. Cal. Feb. 20, 2024) at ¶¶ 49, 131, 140, 149, 154, 160, 170. 
FAC, supra note 1, at ¶ 8.
Case Schedule, Mobley, No. 23-cv-00770-RFL (Sept. 4, 2024).
Mobley v. Workday, Inc., 2024 U.S. Dist. LEXIS 11573 (N.D. Cal. Jan. 19, 2024) at *4. 
2024 U.S. Dist. LEXIS 11573, at *3.
FAC, supra note 1.
42 U.S.C.S. § 2000e et seq.
42 U.S.C.S. § 1981.
29 U.S.C.S. § 621 et seq.
42 U.S.C.S. § 12101 et seq.
Cal. Gov’t Code § 12900 et. seq. 
FAC, supra note 1, at ¶¶ 49, 131, 140, 149, 154, 160, 170.
FAC, supra note 1, at ¶ 28.
FAC, supra note 1, at ¶¶ 38-39.
FAC, supra note 1, at ¶¶ 131, 140, 149, 154, 160, 170. 
FAC, supra note 1, at ¶¶ 131, 140, 149, 154, 160, 170.
FAC, supra note 1, at ¶ 89.
FAC, supra note 1, at ¶ 88.
FAC, supra note 1, at ¶¶ 24-25.
FAC, supra note 1, at ¶¶ 51-53.
FAC, supra note 1, at ¶ 55.
FAC, supra note 1, at ¶ 55.
FAC, supra note 1, at ¶¶ 56-57, 75.
FAC, supra note 1, at ¶¶ 76, 77, 85.
FAC, supra note 1, at ¶ 85.
FAC, supra note 1, at ¶¶ 131, 140, 149, 154, 160, 170.
Mobley v. Workday, Inc., 2024 U.S. Dist. LEXIS 126336 (N.D. Cal. July 12, 2024) at *7.
2024 U.S. Dist. LEXIS 126336, at *5-6.
2024 U.S. Dist. LEXIS 126336, at *9. 
Brief of the Equal Employment Opportunity Commission as Amicus Curiae, Mobley, No. 23-cv-00770-RFL (N.D. Cal. April 9, 2024).
EEOC Amicus Brief, supra note 30, at 8. 
2024 U.S. Dist. LEXIS 126336, at *32-33.
2024 U.S. Dist. LEXIS 126336, at *10-12.
2024 U.S. Dist. LEXIS 126336, at *19-22.
2024 U.S. Dist. LEXIS 126336, at *11.
2024 U.S. Dist. LEXIS 126336, at *19.
Id.
2024 U.S. Dist. LEXIS 126336, at *25.
2024 U.S. Dist. LEXIS 126336, at *28.
2024 U.S. Dist. LEXIS 126336, at *31. 
2024 U.S. Dist. LEXIS 126336, at *16.
2024 U.S. Dist. LEXIS 126336, at *14 (citing Moyo v. Gomez, 40 F.3d 982 (9th Cir. 1994)).
2024 U.S. Dist. LEXIS 126336, at *16.
2024 U.S. Dist. LEXIS 126336, at *17.
2024 U.S. Dist. LEXIS 126336, at *18 (quoting City of L.A. Dep’t of Water & Power v. Manhart, 435 U.S. 702, 718 n.33 (1978)).