Federal Court Allows Collective Action Lawsuit Over Alleged AI Hiring Bias

Published: Friday, May 16, 2025 at 12:00 am

**Federal Court Greenlights Collective Action Lawsuit Alleging AI Hiring Bias**

In a significant legal development, a federal court has allowed a collective action lawsuit to proceed against Workday Inc., alleging that its artificial intelligence (AI)-driven applicant screening tools discriminate against older job seekers. The case, spearheaded by Derek Mobley, who is over 40, claims Workday's AI systematically disadvantaged him and other older applicants.

Mobley, after submitting over 100 applications through companies using Workday's platform and receiving no offers, filed the lawsuit. He alleges the AI tools, designed to score, sort, and rank applicants, unfairly penalize older candidates. The court initially dismissed Mobley's complaint but later granted permission to file an amended version. Workday's subsequent attempt to dismiss the amended complaint was also unsuccessful.

The court's denial of Workday's motion to dismiss recognizes Mobley's claim as plausible under the Age Discrimination in Employment Act (ADEA), based on a disparate impact theory. This ruling, handed down by Judge Rita Lin of the U.S. District Court for the Northern District of California, allows the lawsuit to proceed as a nationwide collective action. This means that individuals over 40 who were denied employment recommendations through Workday's platform since September 24, 2020, can "opt in" to the lawsuit. The court determined that the central issue of whether Workday's AI system disproportionately affects applicants over 40 can be addressed collectively.

Workday has responded by stating the lawsuit lacks merit and emphasizing that the court's decision is preliminary.

This case is being closely watched as it highlights the growing scrutiny of AI in employment decisions and the potential for significant legal exposure for employers. Legal experts are advising employers to proactively assess algorithmic tools for potential bias and ensure compliance with evolving legal standards.

BNN's Perspective: This case underscores the complex ethical and legal challenges surrounding the use of AI in hiring. While AI can offer efficiencies, it's crucial to ensure these tools are free from bias and do not inadvertently discriminate against protected groups. The court's decision highlights the need for careful oversight and ongoing evaluation of AI systems to ensure fairness and compliance with existing laws.

Keywords: AI hiring bias, Workday, age discrimination, ADEA, collective action, lawsuit, employment law, AI in employment, algorithmic bias, disparate impact, Derek Mobley, Judge Rita Lin, Northern District of California, employment screening, legal exposure, Holland & Knight

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