LORENA MANASTUREAN—When Derek Mobley was laid off from his IT job in 2017, he—like over 54% of Americans—turned to digital hiring platforms to find his next job. Mobley submitted over 150 applications on the job-search website Workday but heard nothing over the course of nine months. When he received an email at 1:30AM on a weekend about an opportunity he had applied for earlier that week, he had a “watershed moment.” Mobley realized the email had not been sent be a human, but by a bot.
Mobley’s revelation was backed by the statistics: approximately 88% of companies rely on AI for their hiring practices. Whether AI is used to screen applicant resumes and generate email responses, or whether companies outsource hiring through AI-based websites like Workday, the decision to give you an interview—or to reject your application—is likely made by AI. The use of AI in hiring practices is as new as the AI itself and controversy surrounding its ethical implications has persisted. Researchers have recognized that AI is biased, developing implicit and explicit biases based on the training data it is provided. Now, applicants like Mobley allege that AI relies on these biases when screening out applicants.
In 2024, Mobley brought a claim against Workday under the Age Discrimination in Employment Act of 1967 (ADEA). In the complaint, Mobley alleged that Workday’s use of AI in its hiring practices for third parties wrongfully discriminated against older applicants. The ADEA prohibits discrimination on the basis of age for employees and applicants above the age of 40. On May 16th of 2025, Judge Rita Lin of the U.S. District Court for the Northern District of California granted a preliminary certification under the ADEA in Mobley et al v. Workday, Inc. Individuals may now opt in to the class action if they believe they also experienced age discrimination in Workday’s hiring processes.
Judge Lin dismissed Mobley’s intentional discrimination claim but accepted the disparate impact allegation. In employment discrimination law, intent is a significant factor in determining the potential claim. Intentional discrimination involves employers discriminating against an employee or potential employee because of a protected class characteristic (Title VII of the Civil Rights Act of 1964’s protected characteristics are race, color, religion, sex, and national origin). A disparate impact claim, however, encompasses employment decisions that had a discriminatory effect on employees or candidates but was not motivated by intent.
The disparate impact framework was developed in the Supreme Court’s 1971 Griggs v. Duke Power Co. decision. There, the Court found that a company’s requirements of a high school diploma and IQ and aptitude tests for internal promotions, while not intentionally implemented to discriminate, deprived most Black employees of the opportunity to transfer to better positions. In a disparate impact case, the plaintiff has the initial burden of pointing to a specific, facially neutral employment practice that has a statistically significant impact on a protected class. Then, the employer can rebut the presumption of discrimination by showing that the employment practice is job-related and consistent with business necessity. The plaintiff can still win after this showing if they can provide an alternative employment practice that similarly meets the employer’s needs without producing a significant impact on the protected class and which the employer refused to implement.
While Mobley v. Workday advances through the fact-finding stage, many corporations are eager to hear the court’s final ruling. The outcome of the case will likely determine the legal limits of AI use in hiring. For mammoth corporations like Google, who received over 3 million applications in 2024, and McKinsey & Company, who received about 1 million, a victory for Mobley could serve as a blow to the streamlined, effective hiring process AI helped create. But, for the millions of older, disabled, female, or non-white applicants, the case may provide protections against AI’s implicit and explicit biases—extending existing Title VII, ADEA, and ADA protections to limit the use of discriminatory AI. Mobley v. Workday may be the first suit of its kind, but other lawsuits against AI hiring practices are already progressing through the courts. A group of job applicants is suing Eightfold AI, a company that creates AI software employers can use in their hiring decisions. This suit proceeds with an even more novel claim: AI employment tools should be subject to the Fair Credit Reporting Act.
A decision in Mobley v. Workday is likely to arrive this year. But until then, employers and employees alike wait with bated breath for the outcome of this first-of-its-kind employment discrimination and AI regulation case.
