When Algorithms Make the Decisions: What Workers Should Know About AI and Employment Discrimination

Hiring practices have changed dramatically in the last decade. Many job seekers today never speak to a person during the early stages of applying for work. Instead, they interact with software platforms that scan resumes and make decisions in seconds. These tools are often powered by AI, promising to streamline hiring and remove human bias. But what happens when the software itself is biased? A recent lawsuit filed in the Northern District of California raises that question and could have wide-reaching implications for how job applicants are treated.

The case involves Derek Mobley, an African American man over the age of 40 who also lives with anxiety and depression. Between 2017 and 2023, Mobley applied for more than 100 jobs through employers that used the same third-party screening system developed by Workday, Inc. The platform required him to upload his resume, complete assessments and submit personality tests.

His application was rejected every time, sometimes within an hour. Other rejections occurred at night, allegedly indicating that a robot rather than a human was processing the job applications.

Mobley alleges that Workday’s AI system discriminated against him based on his race, age and disability status. His complaint points to several federal laws, including the Age Discrimination in Employment Act and the Americans with Disabilities Act. California’s labor laws echo these protections, prohibiting discrimination in hiring based on a person’s protected characteristics.

Mobley’s lawsuit has moved forward as a collective action, with several other similarly situated applicants joining him. Together, they submitted thousands of applications to companies using Workday and were rejected each time, often with identical responses generated at odd hours. They argue that the software unfairly screening out candidates because of their age or other legally protected traits.

The legal issue here isn’t just whether Workday’s AI was biased; it’s whether employers who rely on such systems can be held responsible. The Equal Employment Opportunity Commission has issued a guidance saying that employers may be liable for discrimination resulting from AI hiring tools, even if those tools are created and operated by third-party vendors. If an AI system consistently screens out people from certain protected groups on the company’s behalf, the employer may still be accountable.

This case comes at a time when the use of AI in employment decisions is becoming more common, and the risks are becoming harder to ignore. For workers, the stakes are high. If hiring software contains hidden biases, it could block qualified applicants before they ever have a chance to make their case. Because these systems operate at scale, one faulty algorithm could affect thousands of people.

Mobley is seeking to expand his lawsuit into a nationwide class action that includes other job applicants similarly rejected by Workday’s AI platform based on alleged discrimination. His case is still in the early stages. However, it poses important questions about who is responsible when an algorithm makes a biased decision and how job seekers can protect their rights in an increasingly automated job market.

Workers who suspect they have been unfairly rejected for a job due to discrimination may have legal options. California and federal laws provide protections against discrimination based on personal characteristics such as age, gender, race, national origin and disability. These laws apply to all aspects of employment and also protect job applicants from discrimination during the hiring process.

If you believe you were denied employment based on discriminatory reasons, contact a knowledgeable Oakland employment lawyer to discuss your situation. While Erlich Law Firm is not involved with the Workday lawsuit, we have extensive experience helping workers resolve employment discrimination cases. Our team is committed to helping workers understand their rights and hold employers accountable for unlawful hiring practices. Contact us today for a free and confidential consultation.