SAN FRANCISCO - A federal judge has cleared a class action lawsuit to move ahead against business and employment tech firm Workday for allegedly providing employers with AI-powered job applicant screening tools that allegedly discriminate against black, older workers.
On July 12, U.S. District Judge Rita F. Lin rejected Workday's bid to dismiss much of the lawsuit.
In the ruling, Judge Lin noted that Workday is not accused as a direct employer discriminating against any job seekers. However, Lin said the case presents a unique, but plausible claim that Workday could still face discrimination claims under federal employment law because the company has acted as an agent assisting employers with their hiring screening - and thus, allegedly has also assisted in the alleged discrimination.
According to published reports, the ruling may be the first of its kind greenlighting such agency claims against a vendor involving technology powered by artificial intelligence.
The lawsuit "has not sufficiently alleged that Workday finds employees for employers to render it liable as an employment agency," Judge Lin wrote. "But Workday may be liable on an agency theory because the (lawsuit) plausibly alleges that Workday’s customers delegated their traditional function of rejecting candidates or advancing them to the interview stage to Workday."
The decision would allow a class action lawsuit to proceed against Workday.
The lawsuit was filed in 2023 by named plaintiff Derek Mobley. In court documents, Mobley is identified as a black male, over the age of 40 who suffers from anxiety and depression. The documents do not indicate where Mobley resides. However, the document indicates he sought assistance from the U.S. Equal Employment Opportunity Commission at its field office in Oakland.
According to court documents, Mobley holds college degrees and certifications in finance and certain computer technologies, and has worked in "various financial, IT help desk and customer-service oriented jobs."
According to his complaint, Mobley has applied for at least 100 jobs at companies that use job applicant screening tools created by Workday since 2017. He allegedly has been rejected for all of those jobs, despite meeting all job requirements.
In his lawsuit, Mobley accuses Workday of creating and deploying its AI-powered screening tools and assessments specifically to help employers reject job applicants like himself - black, older and potentially suffering with "mental health disorders or cognitive impairments."
Mobley is represented in the lawsuit by attorneys Lee D. Winston and Roderick T. Cooks, of the firm of Winston Cooks LLC, of Birmingham, Alabama; and Jay Greene, of Greene Estate Probate and Elder Law Firm, of San Francisco.
The lawsuit accuses Workday of illegal discrimination under several federal and California state laws, which bar discrimination on the basis of race, age and disability.
Workday argued it cannot be sued under those laws because it did not employ Mobley or any others who may have discriminated against.
Plaintiffs, however, said Workday must share in any discrimination claims, as well, "because employers delegate to them the authority to act on the employer's behalf and rely on Workday's recommendation on whom to hire." Essentially, the plaintiffs said no job applicants can advance in the hiring process at companies using Workday's products unless Workday's products clear them to move forward.
"Because there are no guardrails to regulate Workday's conduct, the algorithmic decision-making tools it utilizes to screen out applicants provide a ready mechanism for discrimination," the plaintiffs assert in their lawsuit.
in her ruling, Lin axed some of Mobley's claims.
But the judge said Workday's arguments in its bid to insulate itself from liability run "contrary to the plain-language of the federal anti-discrimination statutes" and are unsupported by legal precedent.
She said allowing Workday to prevail at this point would create a "gap" in federal hiring discrimination law in which employers could blame discrimination claims on Workday's AI screening tools, and Workday or other vendors could then claim they aren't employers subject to the anti-discrimination statutes.
The judge said that is exactly the kind of scenario the agency theory has been created to address and prevent.
The judge determined Workday fits as an indirect employer under anti-discrimination laws because its products carry out essential tasks typically carried out by employers in the past.
"Given Workday’s allegedly crucial role in deciding which applicants can get their 'foot in the door' for an interview, Workday’s tools are engaged in conduct that is at the heart of equal access to employment opportunities," Judge Lin said.
Further, she said, Workday cannot protect itself by claiming the effects were the result of determinations made by AI.
"... 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," the judge said. "Nothing in the language of the federal anti-discrimination statutes or the case law interpreting those statutes distinguishes between delegating functions to an automated agent versus a live human one."
"... Drawing an artificial distinction between software decisionmakers and human decisionmakers would potentially gut anti-discrimination laws in the modern era."
A spokesperson for Workday did not reply to a request from The Record for comment.
Workday has been represented in the case by attorneys Julie A. Totten, Erin M. Connell, Kayla D. Grundy and Alexandria R. Elliott, of Orrick Herrington & Sutcliffe, of San Francisco.