The Workday lawsuit centers on a significant class and collective action lawsuit filed against Workday, Inc., a leading provider of human resources (HR) and finance software solutions widely used for AI-driven hiring and applicant screening. The plaintiffs allege that Workday’s artificial intelligence-based recruiting tools discriminate against job applicants based on race, age, and disability, violating federal employment discrimination laws. The lawsuit marks a pivotal moment in legal scrutiny surrounding the use of AI in hiring, raising important issues of algorithmic bias, employer liability, and employee rights.
Background of the Workday Lawsuit
The lawsuit originated with Derek Mobley, a Black disabled man over the age of 40, who applied to more than 100 jobs from 2017 onward via employers using Workday’s AI hiring platform. Mobley claimed he was rejected every time without interview or meaningful consideration. He filed suit in 2023 in the U.S. District Court for the Northern District of California alleging that Workday’s software infringed Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA).
Mobley alleged that the software used algorithmic methods to score, rank, and screen applicants, resulting in systemic disparate impact discrimination by disproportionately excluding older, minority, and disabled applicants. Following his lead, four additional plaintiffs joined, pushing for collective action status to represent all job seekers over 40 similarly affected by Workday’s hiring algorithms.
Details of the Workday Lawsuit Allegations or Claims
The key claims include:
- Workday’s AI-based screening tools reject applicants with protected characteristics more frequently than others, creating a disparate impact violating federal anti-discrimination laws.
- Workday is liable as an “agent” for the employers using its software and participates directly in hiring decisions by recommending candidates to move forward or rejecting others.
- The AI tools rely on biased training data that reflects employer prejudices, compounding discrimination.
- Rapid rejections—sometimes within minutes or hours of application submissions—suggest automated, unfair decision-making without meaningful human oversight.
Legal Claims and Relevant Laws Involved in the Lawsuit
The lawsuit invokes several federal statutes:
- Title VII of the Civil Rights Act: Prohibits employment discrimination based on race, color, religion, sex, or national origin.
- Age Discrimination in Employment Act (ADEA): Protects job applicants and employees aged 40 and older from discrimination.
- Americans with Disabilities Act (ADA): Prohibits discrimination against qualified individuals with disabilities.
The court held that although Workday is not an “employer,” it may be held liable as an agent of employers who delegate hiring functions to its AI systems. The case centers on a “disparate impact” theory of discrimination, which involves neutral practices that disproportionately harm protected groups.
Health, Financial, Social, or Industry Impacts of the Lawsuit
The implications of the lawsuit are far-reaching:
- For Job Seekers: Brings awareness to potential hidden biases in AI hiring systems that may unfairly disadvantage older and minority applicants.
- Financially: If successful, millions of affected applicants could be eligible for damages or injunctive relief to overhaul AI hiring tools.
- Industry: Places significant legal and ethical scrutiny on HR software providers and employers using automated hiring tools, driving demand for bias mitigation and transparency.
- Socially: Promotes broader debates about algorithmic fairness, technology’s role in human decision-making, and protecting civil rights in the digital age.
Current Status and Recent Developments in the Lawsuit
In May 2025, the U.S. District Court granted preliminary certification of the age discrimination claim as a collective action, allowing potentially millions of applicants to opt into the lawsuit. The court emphasized that at the certification stage, variations in employer clients and applicant qualifications do not preclude a collective treatment since the alleged use of Workday’s AI platform is a unifying factor.
Workday continues to deny the allegations, asserting that its clients retain full hiring control and that its tools are neutral and not trained on protected attributes. The case is in discovery, with parties ordered to exchange information regarding use of AI features and client data. The court also expanded the scope to include allegations involving the HiredScore AI product, acquired by Workday after the initial claims.
Consumer Advice and Business Consequences Related to the Lawsuit
Job seekers should be aware that AI-based hiring processes may carry risks of bias and should advocate for transparency and recourse options when rejected. Employers and HR professionals must carefully evaluate AI vendors and implement bias mitigation strategies to avoid legal exposure.
Businesses using Workday or similar AI tools should maintain clear human oversight in hiring, document decision-making processes, and ensure compliance with federal anti-discrimination laws to protect applicants and avoid lawsuits.
Conclusion: Significance and Future Outlook of the Workday Lawsuit
The Workday lawsuit represents a landmark challenge to artificial intelligence in employment, highlighting how emerging technologies can unintentionally perpetuate systemic discrimination. Its progress will influence regulatory and legal standards for AI hiring tools and set precedents on liability for vendors providing automated decision-making software.
As AI continues to transform HR and recruitment, this case underscores the critical need for transparency, fairness, and accountability to ensure equitable opportunities for all job applicants in an increasingly automated world.
