US Equal Employment agency says Workday AI hiring bias case should continue

Judge to hear software vendor's effort to dismiss discrimination case next month

The US Equal Employment Opportunity Commission (EEOC) says a claim against Workday should be allowed to continue, arguing the HR and finance software vendor may qualify as an employment agency because of the way its AI tool screens applicants.

Whether or not Workday is considered a job agency is crucial when it comes to the allegations brought against it, as they apply specifically to employment agencies and employers under the Title VII and other laws it is accused of breaking in the complaint. These are laws that ban discrimination based on race, disability, and age.

The original would be class action complaint, filed by lead plaintiff Derek Mobley in February 2023, states that he was turned down for every single one of the more than 100 jobs he applied for using the Workday platform, and alleges illegal discrimination on the basis of race, age, and disability. Mobley is a 49-year-old Black man, who suffers with anxiety and depression and has a degree in finance.

In an amicus brief [PDF] filed last week to a San Francisco federal court, EEOC called on a federal judge to reject Workday's motion to dismiss the case, which claims its use of AI in recruitment screening software resulted in racial and other biases.

Workday has argued the case is without merit and, on Friday claimed in a brief supporting its March motion to dismiss the case that it could "not be held liable as an agent for providing software," as it is "not an employment agency" and is "not plaintiff’s indirect employer".

In its amicus brief in support of Mobley's case, filed two days prior, the EEOC insisted that the plaintiff had indeed "plausibly alleged that Workday's algorithmic tools perform precisely the same screening and referral functions as traditional employment agencies — albeit by more sophisticated means."

"Like traditional employment agencies, Workday's screening tools allegedly review a candidate's application or resume to identify relevant skills and qualifications… Like traditional employment agencies, Workday’s system then purportedly makes a judgment about whether a candidate is qualified or suitable for a particular job opening," the agency said.

However, the EEOC did not take a view on the validity of Mobley's allegations of bias.

The case began in early 2023 when Workday was accused of building algorithms that have resulted in bias against Black applicants in their 40s. The case launched in the Northern District Court of California alleges that the HR and payroll SaaS firm "unlawfully offers an algorithm-based applicant screening system that determines whether an employer should accept or reject an application for employment based on the individual's race, age, and/or disability."

At the time, Workday said in a statement to The Register that Mobley's lawsuit was without merit. It said it was "committed to trustworthy AI" and acts "responsibly and transparently in the design and delivery" of its AI solutions "to support equitable recommendations."

"We engage in a risk-based review process throughout our product lifecycle to help mitigate any unintended consequences, as well as extensive legal reviews to help ensure compliance with regulations," a spokesperson added.

In July last year, Workday moved to dismiss the case, arguing it failed to state a claim upon which relief can be granted in accordance with Federal Rule of Civil Procedure 12(b)(6) and for failing to "exhaust administrative remedies," meaning they did not exhaust all the potential remedies with the EEOC, a lower body.

On May 7, Workday's pending motion to dismiss the suit is set to be heard by US District Judge Rita Lin.

Workday told The Reg in a statement: "We believe this lawsuit is without merit and deny the allegations. As a leading provider of finance and HR software, Workday is a technology company – not an employment agency. We are focused on delivering products designed to be configured and used by customers to best support their needs. We do not have oversight or control of our customers' job application processes, and likewise, our customers do not delegate control to us in regards to their hiring processes." ®

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