A class-action lawsuit is a warning shot on one AI risk for businesses

A class-action lawsuit targeting HR and finance platform Workday Inc. may end up including millions of potential victims — and it offers a cautionary tale — and some important lessons — for companies that use artificial-intelligence tools in their hiring decisions.

The lawsuit, brought by Derek Mobley in the Northern District of California, claims that Workday’s AI-based applicant-recommendation system scored and then discriminated against job applicants on the basis of race, age and disability.

Mobley, who is over 40, along with other named plaintiffs, said they applied for hundreds of jobs with companies using Workday tools only to get silence in return. The lawsuit alleges that Workday’s tools created scores for each applicant and flagged for customers those candidates they should hire — contending that Workday acted as an “agent” of their customers.

Workday, in court documents, has denied the allegations and requested the lawsuit be dismissed. Workday has disputed that it offers “employment recommendations” at all to customers using its software and thus is not the one at fault for potential discrimination. Workday also said in court documents that “1.1 billion applications were rejected using Workday” during the time period at issue and “any notice would still invite potentially hundreds of millions of potential plaintiffs to file their claims in this case.”

https://www.bizjournals.com/seattle/news/2025/08/12/workday-class-action-lawsuit-ai-tools-legal-hiring.html