Landmark lawsuit challenges Workday’s AI hiring tools over age discrimination

A landmark lawsuit against Workday‘s algorithm-based hiring technology could redefine the legal boundaries for AI in employment screening. The case, which a California judge has allowed to proceed as a collective action, represents a critical test of whether automated screening tools violate anti-discrimination laws when they potentially disadvantage protected groups. As companies increasingly adopt AI for hiring decisions, this precedent-setting litigation highlights the tension between technological efficiency and workplace fairness.

The big picture: A California judge has green-lit a collective action lawsuit against HR software company Workday, alleging its algorithm-based applicant screening technology discriminates against older job seekers.

• The plaintiffs, all over 40 years old, claim they were systematically rejected from hundreds of jobs through Workday’s platform, sometimes within minutes of applying.
• The lawsuit alleges Workday’s algorithms “disproportionately disqualify individuals over the age of forty” when screening and ranking job applicants.

Why this matters: The case could establish legal precedent for how companies can use algorithms and AI in hiring decisions as automation becomes increasingly common in recruitment.

• Workday’s platform is used by over 11,000 organizations worldwide, giving its hiring algorithms significant influence over labor market access.
• The outcome may shape future regulations around algorithmic transparency and accountability in employment contexts.

Key details: The lawsuit originated with Derek Mobley, who claims Workday’s algorithms caused him to be rejected from more than 100 jobs over seven years based on his age, race, and disabilities.

• Four additional plaintiffs have since joined the case, specifically alleging age discrimination.
• The lawsuit seeks unspecified monetary damages and a court order requiring Workday to change its practices.

What they’re saying: Workday has denied allegations that its technology discriminates, characterizing the judge’s decision as a “preliminary, procedural ruling” that “relies on allegations, not evidence.”

The broader context: AI hiring tools face mounting scrutiny from civil rights organizations concerned about algorithmic bias perpetuating workplace discrimination.

• The American Civil Liberties Union has warned that AI hiring tools “pose an enormous danger of exacerbating existing discrimination in the workplace.”
• In 2018, Amazon abandoned an automated candidate ranking system after discovering it favored male applicants over women, highlighting how AI can inadvertently learn and amplify existing biases.

Between the lines: Workday markets its “HiredScore AI” as using “responsible AI” to grade top candidates and reduce application screening time, highlighting the tension between efficiency claims and potential discriminatory impacts.