Judge allows AI lawsuit against Workday to proceed
A court partially allows a lawsuit against Workday to advance, raising questions about AI's role in hiring. The case may set precedent for applying discrimination laws to AI tools.
A federal judge in California has partially allowed an AI lawsuit against Workday to move forward, a case that might set a precedent for holding software vendors accountable for the potential discriminatory effects of their algorithms.
The lawsuit, brought by Derek Mobley, alleges that Workday's algorithms are biased, leading to his repeated job rejections based on race, age and disability. Mobley identifies himself in the lawsuit as African American and over the age of 40 with anxiety and depression.
While U.S. District Court Judge Rita Lin dismissed some of Mobley's discrimination claims against Workday, she allowed crucial claims in this AI lawsuit to proceed, signaling a mixed outcome that both sides have spun in their favor. The court was ruling on Workday's motion to dismiss.
Workday expressed satisfaction with the court's decision to dismiss several claims. "We're pleased that the majority of claims in this case were dismissed, and we're confident that the remaining allegations will be easily refuted as we move to the next phase where we'll have an opportunity to directly challenge their accuracy," a company spokesperson said.
On the other hand, Lee Winston, Mobley's Birmingham, Ala.-based attorney, highlighted the significance of the court allowing key claims to move forward. "The court's ruling means that discrimination laws apply to AI products used in the hiring selection process," he said. "Workday is not entitled to immunity for their AI creations. The existing discrimination laws apply, and the case fortunately gets to advance to the next stage."
This case has received the attention of the U.S. Equal Employment Opportunity Commission, which filed a brief in April urging the court not to dismiss Mobley's claims.
AI's role on par with employers
In her decision, Lin wrote that software vendors that design and administer algorithmic hiring tools are potentially playing a crucial role in the hiring process, on par with employers themselves in some respects.
Drawing an artificial distinction between software decision makers and human decision makers would potentially gut anti-discrimination laws in the modern era.
Rita LinU.S. District Court judge
"Drawing an artificial distinction between software decision makers and human decision makers would potentially gut anti-discrimination laws in the modern era," Lin wrote. She argued that "Workday's role in the hiring process is no less significant because it allegedly happens through artificial intelligence rather than a live human being who is sitting in an office going through resumes manually to decide which to reject."
However, the court found insufficient evidence to support Mobley's claims that Workday intentionally used its hiring tools to discriminate against him, stating that, "Mobley has not adequately alleged that Workday intended its screening tools to be discriminatory."
The court allowed Mobley's disparate impact claims to proceed. Disparate impact refers to practices that may have a disproportionate negative effect on a protected group. Mobley alleged that he was rejected at the job screening stage from more than 100 positions, even though he was allegedly qualified for the jobs. Citing the sheer number of rejections and the timing of those decisions, Lin wrote that they "support a plausible inference that Workday's screening algorithms were automatically rejecting Mobley's applications based on a factor other than his qualifications, such as a protected trait."
To illustrate the point, the judge cited allegations in the complaint that Mobley received rejection emails outside of business hours. "On one occasion, Mobley received a rejection at 1:50 a.m., less than one hour after he had submitted his application."
The court dismissed Mobley's claims that Workday acted as an employment agency under federal anti-discrimination laws. An employment agency is a business that helps employers find job candidates. The judge noted that Workday's role did not fit this definition.
However, the court allowed Mobley's claims that Workday acted as an agent of its client employers to proceed. The judge found that Mobley sufficiently alleged that Workday's customers delegated traditional hiring functions to Workday, allowing the claim to move forward.
Patrick Thibodeau is an editor at large for TechTarget Editorial who covers HCM and ERP technologies. He's worked for more than two decades as an enterprise IT reporter.
