Dive Brief:
- Plaintiffs in a closely watched lawsuit against HR vendor Workday may bring disparate-impact age discrimination claims under the Age Discrimination in Employment Act, a federal judge held Friday, rejecting an argument previously advanced by Workday.
- Workday argued that Congress’ unsuccessful attempts to amend the ADEA to cover job applicants meant the plaintiffs in Mobley v. Workday, Inc., who are job applicants, were not covered by the law. But Judge Rita Lin wrote that the U.S. Supreme Court has rejected similar arguments. Lin also held that prior district court precedent affirming the ADEA’s coverage of applicants was not disturbed by the end of Chevron deference.
- However, Lin granted Workday’s motion to dismiss certain California state law claims and an individual plaintiff’s disability discrimination claim against the company. The court set a deadline of March 27 for plaintiffs to file an amended complaint correcting the deficiencies identified in her order.
Dive Insight:
HR professionals have been watching the Workday lawsuit closely; one attorney wrote in an opinion piece to HR Dive that the outcome of the case could be a “defining moment” for a U.S. legal system grappling with whether the outputs of artificial intelligence-based hiring programs could be discriminatory.
In Mobley, the first named plaintiff alleged that he had been rejected from more than 100 positions at companies that used Workday’s recruitment screening tools. He claimed violations of the ADEA as well as Title VII of the 1964 Civil Rights Act and the Americans with Disabilities Act. In 2025, the U.S. District Court for the Northern District of California granted a request for preliminary certification of a nationwide collective action on the claim of age discrimination.
Workday has contested the lawsuit for nearly two years. The company argued in January that the ADEA did not grant disparate-impact discrimination protections to job applicants, noting that en banc decisions of the 7th and 11th U.S. Circuit Courts of Appeals held as much.
In 2017, the California district court in which Mobley was filed reached the opposite conclusion. But Workday argued that this decision should have been invalidated by the Supreme Court’s Loper Bright Enterprises v. Raimondo ruling, which forbade courts from deferring to federal agencies’ reasonable interpretation of ambiguous statutes.
Lin wrote that Loper Bright did not apply in this case, however, given that the 2017 district court decision was not contingent on agency deference. She also noted that Loper Bright nonetheless permitted courts to defer to agency interpretations under a separate case, Skidmore v. Swift & Co., and that the U.S. Equal Employment Opportunity Commission’s longstanding interpretation that the ADEA does apply to job applicants was persuasive under this deference standard.
Interestingly, Lin did grant Workday’s motion to dismiss the ADA complaint of one plaintiff, a cancer survivor with a current asthma diagnosis, because the plaintiffs made “no factual allegations” describing how Workday’s products discriminated against applicants on the basis of physical disability. Lin dismissed the complaint with leave to amend, though, “because it is not clear whether amendment would be futile.”
Workday also asked the court to strike allegations in the plaintiffs’ amendment complaint relating to recruitment, promotion or retention of employees. Lin denied this motion.
In an email to HR Dive, Workday denied the plaintiffs’ allegations.
“Our products, both AI-enabled and not, are built to help our customers manage an ever-increasing volume of applicants with a focus on human decision-making,” the company said. “Workday’s AI recruiting tools are not trained to use — or even identify — protected characteristics like race, age, or disability. We’ll continue to defend ourselves vigorously in court.”
Both before and after the lawsuit’s filing, multiple states enacted laws aimed at prohibiting discrimination by AI and automated systems in employment and other contexts. One highly anticipated law in Colorado, set to take effect at the end of June, will require employers in the state that deploy high-risk AI systems to take “reasonable care” to protect consumers from discrimination.
Employers also have their eyes set on a second prominent AI-related lawsuit in California against Eightfold AI Inc., which allegedly used AI to build reports on job applicants without their knowledge or consent. The ongoing case claimed that Eightfold AI collected personal information from unverified, third-party sources to rank candidates based on their “likelihood of success.”
