Workday must face accusations that its popular artificial intelligence-based human resources software screened out job candidates at other companies in ways that violated California law and the federal ban on discrimination against employees. workers with disabilities, a federal judge ruled Monday.
U.S. District Judge Rita Lin of San Francisco rejected the argument Workday, of California, that state anti-discrimination laws do not apply when the company recruits individuals residing outside of California who apply for employment in other states and countries.
The proposed class action lawsuit, filed in 2023, is the first of its kind to broadly focus on the algorithmic decision-making underlying AI-based recruiting software that has become popular among large companies, and could help shape how this type of litigation is conducted.
Lin first rejected attempts to Workday to dismiss the case in 2024, and on Monday largely denied the company’s request to dismiss recent amendments to the lawsuit. He stated that, since Workday allegedly engaged in illegal conduct from its California headquarters, could be held liable for discrimination under state law.
The judge also refused to dismiss the argument that the software Workday can screen out job candidates based on “proxy indicators” of disabilities and illnesses, such as gaps in a person’s work history, in violation of the federal Americans with Disabilities Act.
Lin did dismiss an allegation that the software Workday discriminated against Asian American job applicants, alleging that the plaintiffs had not followed the proper procedure to include her in the lawsuit.
The plaintiffs allege, furthermore, that Workday discriminated against black job applicants, women and people over 40 years of age.
Neither Workday nor did the plaintiffs’ lawyers immediately respond to the requests of comments.
Numerous surveys have revealed that more than 80% of American employers, and virtually all Fortune 500 companies, use AI tools, such as those developed by Workday, in the hiring process.
Government agencies and worker advocates have raised concerns that AI tools could discriminate against job applicants when developed from data that reflects pre-existing biases.
However, to date there has been little litigation surrounding employers’ use of these tools, which experts say could be because many job seekers are unaware of when employers use AI software and the complexities of filing a lawsuit involving cutting-edge technology.
