Key facts
- Workday must face claims that its AI-powered HR software discriminated against job applicants.
- The lawsuit alleges violations of California law and the federal Americans with Disabilities Act.
- A federal judge ruled that Workday's California headquarters' alleged participation in unlawful conduct makes it liable under state law.
- The judge allowed claims that Workday's software screens based on 'proxy indicators' of disabilities.
- A claim of discrimination against Asian American applicants was dismissed due to procedural issues.
Workday must face claims that its popular AI-powered human resources software discriminated against job applicants in ways that violated California law and a federal ban on discrimination against workers with disabilities, a federal judge ruled. U.S. District Judge Rita Lin in San Francisco rejected Workday's argument that California's anti-discrimination laws do not apply when it screens individuals outside the state for jobs elsewhere. The proposed class action, filed in 2023, is considered the first of its kind to broadly challenge the algorithmic decision-making of AI screening software widely used by large employers. Lin had previously rejected Workday's attempts to dismiss the case and largely denied its bid to toss out recent amendments to the lawsuit. She stated that Workday could be held liable under state law because it allegedly participated in unlawful conduct from its California headquarters. The judge also refused to dismiss a claim that Workday's software can screen out applicants based on "proxy indicators" of disabilities, such as employment gaps, which would violate the Americans with Disabilities Act. However, Lin dismissed a claim alleging discrimination against Asian American job applicants, citing the plaintiffs' failure to follow proper procedure for adding it to the lawsuit. The plaintiffs also allege discrimination against Black job seekers, women, and individuals over 40. Surveys indicate that over 80% of U.S. employers utilize AI hiring tools, but litigation concerning these technologies has been limited, potentially due to applicants' lack of awareness and the complexity of suing over cutting-edge technology.