A California federal court is allowing a plaintiff job-applicant’s class action employment discrimination lawsuit to go forward against an AI-based vendor after more than 100 employers that use the vendor’s screening tools rejected him.
The AI vendor is Workday. The judge’s decision positions Workday as potentially responsible for employment decisions made by Workday’s customers on the theory that Workday served as an “agent” for all the employers that rejected the Plaintiff and that its algorithmic screening tools were biased against race, age, and disability status.
🤷🏻♂️ What’s the case about?
Plaintiff Derek Mobley is a Black male who self-identifies as having anxiety and depression. Workday is a company that provides AI-based hiring tools to employers. Mobley applied to more than 100 jobs with companies that use Workday’s AI-based hiring tools. Mobley alleges he was rejected every time. Mobley sued Workday alleging race, age, and disability discrimination. Mobley’s theory is essentially that the AI tool creates discrimination.
Workday asked the court to dismiss the lawsuit taking the position that it’s not the employer making the employment decision regarding Mobley. The judge let the lawsuit go forward against Workday.
⚖️ The Judge’s Ruling
1️⃣ Agency – The judge reasoned that Workday could potentially be held liable as an “agent” of the employers who rejected Mobley. The employers allegedly delegated traditional hiring functions – including automatically rejecting certain applicants at the screening stage – to Workday’s AI-based algorithmic decision-making tools. That means that Workday’s AI product directly participated in the hiring process.
2️⃣ The Late Night Email – One of the allegations Mobley raises to support his claim that Workday’s AI decision-making tool automatically rejected him was an application he submitted to a particular company at 12:55 a.m. He received a rejection email less than an hour later at 1:50 a.m., making it appear unlikely that human oversight was involved.
3️⃣ “Disparate Impact”– Once the judge decided that Workday could be a proper defendant as an agent, she then allowed Mobley to proceed against Workday on a “disparate impact” theory. That means the company didn’t necessarily intend to screen out Mobley based on race, age, or disability, but that it could have set up selection criteria that had the effect of screening out applicants based on those protected criteria.
4️⃣ One Size Does Not Fit All: The decision, which isn’t precedential, doesn’t mean that all AI vendors/developers are agents of their customers. A vendor that, for example, develops a spreadsheet system that helps employers sort through applicants probably isn’t subject to a lawsuit because they’re just providing the data, nothing more.
This case is the first of many that will help shape the law regarding legal accountability in the world of AI.