Workday accused of AI bias in job screening, faces California lawsuit over employment tech | usagoldmines.com

• Workday’s AI screening software under fire for discriminatory biases
• Hirers usually bear the responsibility, but human-replacing software could be responsible
• The case must also consider AI much more broadly, including historical biases and shifting responsibilities

During a June 2026 hearing, Judge Rita Lin implied she might be likely to reject Workday’s latest attempt to dismiss claims brought under California law relating to a 2023 discrimination case.

Three years ago, Derek Mobley accused the company of rejecting him from more than 100 jobs after applying through he company’s recruitment systems on the basis that he is black, over 40 years old and has anxiety and depression.

But rather than suing the individual employers, Mobley is pursuing action against Workday itself, arguing its AI-powered hiring software is responsible for discriminatory action.

Workday is on track to face legal action over AI-powered hiring software

Workday has argued that California employment discrimination laws should not apply when applicants live – or jobs are located – outside of California.

Reuters notes that more than four in five US employers and nearly all Fortune 500 companies now use AI-powered hiring or applicant-screening tools, and the ongoing case marks an important potential shift in its regulation.

Previously, employers have been liable for discriminatory hiring, but the lawsuit is now exploring whether software developers and AI vendors should bear some responsibility.

In an earlier 2024 hearing, the judge questioned whether Workday may also qualify as an employer because it performs screening tasks that would usually be carried out by human workers in HR teams.

While this specific case relates to Workday, the court must also explore how training data can affect biases and who bears responsibility for the outcome – the results could have a much bigger impact than just a fine for Workday.

“Our technology looks only at job qualifications, not protected traits like race, age, or disability,” the company added in a statement.