Recent Legal Developments in AI and Employment: The Mobley Case
In the recent case of Derek Mobley v. Workday, Inc., a federal court in California has allowed a lawsuit to proceed against Workday, an HR technology provider, over allegations of discriminatory hiring practices linked to the use of its artificial intelligence (AI) technology. The court’s decision suggests that Workday could be held directly liable for discriminatory hiring decisions made by its AI, based on an “agency” theory.
The court emphasized that the involvement of AI in the hiring process does not diminish the significance of Workday’s role. There is no legal distinction between delegating hiring tasks to a human versus an AI system. The court focused on the function delegated, not the nature of the agent performing the task.
In essence, if an AI system performs functions typically handled by a human employee, and is relied upon by an organization, the AI vendor could be considered an agent of the employer for liability purposes.
The Equal Employment Opportunity Commission (EEOC) has expressed concerns about AI’s impact on fairness in the workplace and has issued guidance for employers on assessing adverse impacts from AI-driven hiring tools. In the Mobley case, the EEOC supported the argument that Workday might be considered an indirect employer or agent if the allegations are accurate.
Beyond federal guidelines, state and local regulations are increasingly addressing AI in HR. For example, New York City has enacted legislation requiring bias audits and transparency for AI used in employment decisions. The Mobley case underscores the growing need for awareness of AI-related risks beyond just HR, reflecting broader concerns about AI’s role and liability.
Maintaining Accountability in the Age of AI
The Mobley case highlights that companies cannot evade their legal responsibilities by using AI. It reinforces that:
- Employer Liability Persists: Companies using AI cannot use it as a defense against discrimination claims. The responsibility ultimately rests with the deploying company.
- Beware of Automation’s Limits: The efficiency of AI should not overshadow the need to address potential biases and ensure accountability. Thorough evaluation and understanding of AI applications and their associated risks are essential.
Our DC Employment lawyers see the Mobley case as a reminder that the evolving legal landscape around AI necessitates diligent responsibility from all parties involved. By adhering to disciplined practices and staying updated on legal and industry standards, companies can better manage AI’s benefits and mitigate potential liabilities.