Written by Caroline Carrier From Squire Patton Boggs on Feb 10, 2026
Job applicants often worry about what sorts of things may prevent them from obtaining a position. Although applicants may understand that a lack of qualifications or experience can work against them, they might not be as aware that recruitment and hiring tools used by employers may be working against them as well. The processes employers use to narrow applicant pools and ultimately select candidates are becoming increasingly automated; indeed, the World Economic Forum reported in 2025 that approximately 88% of companies are already utilizing some form of artificial intelligence (AI) in candidate screening.
AI can be an incredibly useful tool for employers to streamline and customize hiring processes, but its use is not without risks. Consider an online platform that matches an employer’s job posting with an applicant’s credentials and prioritizes candidates for the employer’s review based on an algorithmic assessment of how strong the match is, or a machine learning mechanism that observes existing hiring practices and adjusts its recommendations to be best suited to the employer. Although these sound like convenient and logical ways to sift through a candidate pool and identify potential employees that will best meet the needs of the position to be filled, they are exactly the tools at issue in Mobley v. Workday, Inc., a lawsuit filed in a California federal court in 2023 alleging that these AI-based hiring systems unlawfully discriminate against job applicants.
The action was brought by Derek Mobley, who claims he applied for dozens of jobs with employers that utilize AI hiring tools created by Workday, a company providing human resources and finance support, and was rejected every time. Workday has pushed back against Mr. Mobley’s claims by asserting that although its provides certain tools to employers to aid in the hiring process, the ultimate hiring decision is made by the employer, not the Workday tools. Mr. Mobley’s retort is that he was sometimes rejected within hours or minutes of applying, suggesting that it was Workday’s automated screening tools that were making the rejection decision on behalf of the employers.
As an African-American over age 40, Mr. Mobley alleges that these “smart” tools disparately impacted him by deprioritizing him based on his protected characteristics as well as automatically incorporating previous employer bias. He also alleges that these tools have not only impacted him, but a broad class of job applicants, and asserts claims under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act. The federal court hearing his case granted preliminary collective certification of a class of applicants in its most recent decision in this case. Those applicants in the defined class have until March 7, 2026 to opt into the case. As it develops, the case will provide insight into not only Mr. Mobley’s specific claims (on his own behalf and on behalf of the class), but also how judicial attitudes are developing and how similar issues will be resolved in the future as AI continues to integrate into the employment space.
The Workday case provides a warning about the risks involved in leveraging AI tools in recruitment and hiring tasks, but it is not the only example of such risk. Lawsuits alleging discrimination against AI tools and the employers using them have been on the rise since 2022, and show no signs of diminishing, particularly as judicial opinions solidify and provide insight to potential claimants as to how to approach this type of case.
Even the best-intentioned employers may be exposed, as it is difficult to assess employer compliance when it comes to systems that are algorithmic and create nontransparent outcomes. One emerging certainty is that employers cannot hide behind the automated nature of their hiring tools at the risk of engaging in unlawful (yet unintended) discrimination. Although the Workday lawsuit is against the company behind the AI hiring tools itself, other suits have implicated the employers involved as the responsible party for ultimately sanctioning and making hiring decisions based off of purportedly discriminatory AI tools. It therefore makes sense that employers take stock of their hiring and recruitment processes, and closely scrutinize any parts of those processes that are supported by AI to ensure that their mechanisms are not discriminating against candidates either by design or incidentally.
- Employers should seek to understand what a tool is designed to evaluate and how it was trained and tested for bias before handing any hiring processes over to it.
- Employers should only utilize tools that provide insight into why a candidate was prioritized or deprioritized, over tools that issue decisions with no explanation, to ensure that the decision-making is properly supported.
- Employers should regularly assess the functionality and output of AI hiring tools to maintain awareness of whether AI seems to be engaging in any potentially discriminatory assessments.
- All processes that are supported by AI should be just that – supported. AI should be used as a helper, not a source of authority. Final decision making should always be left in the hands of the real people behind an employer’s hiring procedures.
Seeking efficiency and value in hiring is not unlawful – it’s a smart business practice. But the Workday lawsuit and the rapidly changing AI landscape serve to remind employers that there is risk to consider. Maintaining oversight over, and seeking clarity within, the hiring process from beginning to end will help employers to navigate the potential pitfalls at play and ensure their practices produce ideal candidates without improperly leaving anyone out of the equation.
