Workday Faces Lawsuit Over AI Hiring Software

- The lead plaintiff, Derek Mobley, is a Black man over the age of 40 who states he was rejected for over 100 jobs with companies using Workday's AI hiring tools. His lawsuit alleges discrimination based on age, race, and disability. - The lawsuit is proceeding on a "disparate impact" theory, which argues that the software disproportionately screened out protected groups even if the discrimination was not intentional. - Workday's primary defense is that it is a software vendor, not an employer or employment agency, and that its clients are the ones who make the ultimate hiring decisions. However, a court ruled the case could proceed on the theory that Workday acted as an "agent" for employers. - Specific Workday AI tools named in the lawsuit include "Candidate Skills Match" and the "Workday Assessment Connector". A later ruling expanded the case to include applicants screened using "HiredScore AI features" as well. - The plaintiff alleges that rejections often came almost immediately after submitting an application, sometimes outside of normal business hours, suggesting an automated screening-out process. - In May 2025, U.S. District Judge Rita Lin granted preliminary certification for a nationwide collective action, allowing other job applicants over the age of 40 who were denied employment recommendations through the platform since September 2020 to join the suit. - This case is considered a landmark legal challenge regarding AI vendor liability, as it could set a precedent for holding technology companies responsible for discriminatory outcomes produced by their algorithms. - The U.S. Equal Employment Opportunity Commission (EEOC) has weighed in, stating that Workday should face the claims and emphasizing that employers cannot outsource their anti-discrimination obligations to an algorithm.