Judge Signals Workday AI Bias Case Can Proceed

A federal judge has indicated she will likely allow a lawsuit accusing AI human resources software maker Workday of discriminatory practices to move forward. U.S. District Judge Rita Lin expressed skepticism regarding Workday's defense that it is not liable under California law when screening applicants outside the state for jobs elsewhere.

This pivotal case is the first to broadly challenge algorithmic decision-making in AI screening software, a technology now widely adopted by large employers. Experts note that over 80% of U.S. employers utilize AI in hiring, including Workday's tools, which screen numerous job applications.

The lawsuit, initially filed in 2023, alleges that Workday's software unfairly rejected job applicants, including one individual who claims he was passed over for over 100 jobs because he is Black, older than 40, and has anxiety and depression. The case has expanded to include broader discrimination claims under California's Fair Employment and Housing Act (FEHA).

Workday's attorneys argued that its liability depends on individual customer violations and that insufficient contacts with California exist when screening out-of-state applicants. However, the judge cited a prior ruling suggesting direct liability for FEHA-regulated conduct, focusing on where the alleged misconduct occurred.

Judge Lin previously ruled that Workday could be considered an employer subject to federal anti-discrimination laws due to its screening functions. The judge did not specify when a final ruling on the applicability of California law would be issued.