A federal lawsuit accusing Workday's AI recruiting tools of discriminating against older, minority and disabled job applicants is heading toward a March class certification hearing. Workday processed almost 1 million applications a day in 2024, and the case could have far-reaching consequences for employers that rely on automated screening.
The case, Mobley v. Workday, is being argued in federal court in Northern California. The plaintiffs say Workday has become "a primary gateway" to the job market. U.S. District Judge Rita F. Lin dismissed claims of intentional discrimination but allowed the lawsuit to proceed on the theory that the screening software has a disparate impact on protected groups, even if that was not intended.
Anthony May, a Baltimore-based attorney who has written about AI in employment, said the case is being closely watched. "I see this case as the canary in the coal mine," he said. "Employers need to be cognizant of how they're using AI, how is the algorithm set up, what preventive measures have they taken to make sure they're not discriminating."
How bias enters AI hiring tools
Bias can creep in when AI uses past hiring decisions as its model, May said. The algorithm looks for candidates who match people already in a workplace's top ranks, including those hired during more exclusionary times. "It will associate the kinds of traits it's looking for with what these successful people have done," he said. "Everyone at executive level went to Ivy League colleges, they all played on the lacrosse team."
Workday's response
Workday denies the claims. "Workday's AI recruiting tools don't make hiring decisions. Our customers maintain full control of their hiring processes and our tools are designed with human oversight at their core," the company said in a statement. "Our technology looks only at job qualifications, not protected traits like race, age, or disability."
What local employers are doing
Some large employers in the Baltimore area are watching the case closely. Johns Hopkins, Maryland's largest private employer, is moving its hiring process onto Workday next year as part of a broader system transition. Baltimore City and Baltimore County both use Workday, but say they have not implemented its AI-driven applicant screening tools. The University of Maryland system also said it does not use the AI screening feature.
"Applicant qualifications and hiring decisions are reviewed and made by county personnel through established recruitment and selection processes," said Dakarai Turner, press secretary for the Baltimore County executive. Turner said the county has not identified any issues related to bias or discrimination arising from its use of Workday.
Broader scrutiny of AI in the workplace
The Workday lawsuit is one of several recent cases testing how AI is used in employment. In January, job applicants sued Eightfold AI, a hiring platform, for compiling credit reports used to rank candidates, allegedly violating the Fair Credit Reporting Act. In July, Meta employees sued the company, saying it used activity-monitoring data and algorithm-assisted performance rankings to help decide who was laid off. Meta has said it cut 8,000 jobs in May.
Margrét Bjarnadóttir, an associate professor at the University of Maryland Robert H. Smith School of Business, said job seekers are also using AI to tailor resumes for the AI tools that screen them. "Some have described it as an arms race," she said. "There are a lot of open questions about how these technologies are interacting with each other."
Why this matters for HR
HR teams need to know whether the AI tools they use are trained on biased data and what testing the vendor has done. Bjarnadóttir said employers should stress-test their systems. "If you're using these tools, don't use them blindly," she said. "We can't just build these models. We need to stress test them. Who is getting rejected? You need to drill down and understand why."
That means asking vendors how their models were trained and what safeguards prevent disparate impact. HR professionals who want to build that expertise can start with an AI Learning Path for HR Managers or review coverage tagged AI for Human Resources.
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