Workday accused of facilitating widespread bias in novel AI lawsuit

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Screening software reflects existing bias, lawsuit claims

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Amended complaint follows judge’s call for more specifics

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Explosion in employers’ use of AI has led to few lawsuits

By Daniel Wiessner

Feb 21 (Reuters) - Workday is facing renewed claims that it uses artificial intelligence tools that discriminate against job applicants at many major companies it contracts with, in what could be one of the first cases to address the novel legal issues raised by employers’ increasing reliance on AI-powered hiring software.

Derek Mobley, who says he has been turned down for more than 100 jobs he applied for using Workday’s platform, filed an amended complaint in San Francisco federal court on Tuesday after U.S. District Judge Rita Lin dismissed his original lawsuit last month.

The 2023 proposed class action alleges that a Workday platform used by many large companies to screen job candidates discriminates based on race, age, and disability in violation of Title VII of the Civil Rights Act of 1964 and other federal laws.

Lin in her decision said Mobley had not made clear how Workday procures employees for other companies, which is required to show that Workday is an “employment agency” covered by Title VII.

Mobley, who is Black, over 40 years old and has anxiety and depression, says in the new complaint that by using Workday’s platform, employers are essentially handing over their authority to make hiring decisions to the company.

“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,” Mobley’s lawyers wrote in the complaint.

Workday did not immediately respond to a request for comment. The company has denied wrongdoing and said when the lawsuit was filed that it engages in an ongoing “risk-based review process” to ensure that its products comply with applicable laws.

Numerous surveys have found that roughly 80% of U.S. employers, and virtually all Fortune 500 companies, use AI in the hiring process. That includes using software made by Workday and other firms that can review large numbers of job applications and screen out applicants for a variety of reasons.

Government agencies and worker advocates have expressed concerns that AI tools can discriminate against job applicants when they are built using data that reflects existing biases. The Equal Employment Opportunity Commission, which enforces laws banning workplace bias, has warned employers that they can be held legally liable if they fail to prevent screening software from having a discriminatory impact.

But there has been little litigation thus far over employers’ use of the tools, which experts have said could be due to many job applicants not knowing when employers use AI software and the complexities of suing over cutting-edge technology.

In the amended complaint, Mobley claims Workday mines data from large numbers of job applications that its software uses to detect patterns and assist in making decisions.

Mobley says he was directed to a Workday website to apply for jobs with Hewlett Packard, Comcast, Duke Energy, Equifax and Experian, among other companies. He was rejected each time, often within hours of applying, even though he met or exceeded the requirements for the positions, according to the complaint.

Mobley is seeking to represent classes that could include tens of thousands of people, according to the complaint. The lawsuit seeks unspecified compensatory and punitive damages.

The case is Mobley v. Workday Inc, U.S. District Court for the Northern District of California, No. 3:23-cv-00770.

For Mobley: Lee Winston and Roderick Cooks of Winston Cooks

For Workday: Julie Totten of Orrick, Herrington & Sutcliffe

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