Introduction
A collective action lawsuit has been conditionally certified in the Northern District of California [3], focusing on allegations of age discrimination under the Age Discrimination in Employment Act (ADEA) against Workday, Inc. The case [1] [3] [5] [6] [7], Mobley v [1] [2] [3] [4] [5] [6] [7]. Workday [1] [2] [3] [4] [5] [6] [7], Inc. [3] [6], centers on claims that Workday’s AI-driven applicant recommendation system discriminates against job applicants based on race [3], age [1] [2] [3] [4] [5] [6] [7], and disability [1] [2] [3] [5] [6] [7], particularly affecting individuals over 40.
Description
A nationwide collective action lawsuit has been conditionally certified in the Northern District of California regarding claims under the Age Discrimination in Employment Act (ADEA) against Workday [3], Inc. [3] [6], a Tri-Valley enterprise software company that provides HR management services. The case [1] [3] [5] [6] [7], Mobley v [1] [2] [3] [4] [5] [6] [7]. Workday [1] [2] [3] [4] [5] [6] [7], Inc. [3] [6], initiated by Derek Mobley in 2023 [1], involves allegations that Workday’s AI-driven applicant recommendation system facilitates discrimination against job applicants based on race [3], age [1] [2] [3] [4] [5] [6] [7], and disability [1] [2] [3] [5] [6] [7], particularly affecting individuals over the age of 40. Mobley [1] [2] [3] [4] [5] [6] [7], a Black man over 40 with anxiety and depression [2] [7], asserts that he has applied for over 100 positions with companies utilizing Workday’s screening tools since 2017 [1], facing rejection for all applications [1]. He claims that the AI system lacks transparency and enables clients to apply discriminatory and subjective judgments in hiring evaluations, resulting in a disparate impact on these groups and denying him numerous job opportunities.
While Mobley does not claim that Workday is an employer of the class members [3], he contends that the company can be held liable as an agent for the discriminatory practices of its clients using the software. The court [1] [3] [6] [7], presided over by Judge Rita F. Lin [1] [2] [3] [4] [5] [6] [7], recently denied Workday’s second motion to dismiss [3], allowing the case to proceed based on the grounds of disparate impact, which addresses policies that may unintentionally harm protected groups [7]. The judge dismissed claims categorizing Workday as an employment agency and allegations of intentional discrimination but ruled that Workday could still be liable for discrimination by clients using its software [1], particularly in scenarios where hiring would have been conducted manually [1]. This ruling will lead to notifications being sent to affected job applicants [3], potentially resulting in one of the largest collectives ever certified [3], given that Workday reported rejecting approximately 1.1 billion applications through its software during the relevant timeframe [3].
Mobley has sought preliminary certification for a collective action regarding age discrimination [6], aiming to represent all individuals aged 40 and over who applied for jobs through Workday’s platform and were denied employment recommendations [6]. Following his motion [6], four additional plaintiffs [5] [6], including Jill Hughes [4], joined the case [1] [5] [6], sharing similar claims of age-related rejection [6]. Hughes reported receiving automated rejection emails shortly after applying [4], often accompanied by incorrect statements regarding her qualifications [4]. On May 16, 2025 [6], the court granted Mobley’s motion for preliminary certification [6], allowing the case to proceed as a nationwide class action [6]. A key issue is whether the AI system disproportionately impacts applicants over the age of 40 [6], with the court finding that the proposed class is similarly situated due to the alleged existence of a unified policy involving Workday’s AI recommendation system [6].
Workday’s AI platform allows applicants to input their resumes directly [2], evaluating them against job descriptions and assigning a Candidate Skills Match (CSM) score [2]. This approach differs from other HR software that sources resumes from data brokers [2]. However, privacy advocates have raised concerns about the collection of publicly available information [2], such as social media posts [2], which may violate legal standards [2]. One plaintiff reported receiving automated rejection emails [5], suggesting her applications were not reviewed by a human [5]. Workday maintains that its software functions similarly to traditional methods of comparing applicant information and argues that it should not be held liable for discriminatory practices if employers misuse the software [2].
The increasing use of AI tools in the job application process has raised concerns about legal risks associated with their implementation [3]. California has recently enacted regulations permitting HR AI systems to make automated decisions [2], provided they comply with discrimination statutes [2]. The Mobley case highlights the need for transparency in AI systems and the potential for novel legal claims arising from their use in employment practices. The outcome of this case could lead to increased scrutiny of algorithmic hiring tools [7], particularly those that disproportionately reject applicants from protected classes [7], potentially affecting past hiring decisions [7]. The plaintiffs are seeking damages and changes to Workday’s policies [5], and a successful lawsuit could pave the way for similar legal actions against other companies utilizing AI in hiring processes [2], raising questions about the transparency and fairness of AI decision-making [2]. To mitigate risks [7], employers are advised to conduct audits of their AI vendors to ensure compliance with anti-discrimination guidelines and to assess potential biases in their systems [6], emphasizing the importance of human oversight to ensure that qualified candidates are not unjustly excluded [7]. The parties involved have been instructed to meet by May 28 to devise a plan for identifying and notifying class members [6], with a case management conference set for June 4, 2025 [6]. Following further discovery [6], Workday will have the chance to contest the collective’s similarity and seek de-certification of the class [6].
Conclusion
The Mobley v [3] [5]. Workday [1] [2] [3] [4] [5] [6] [7], Inc. case underscores the growing legal and ethical challenges associated with AI-driven hiring tools. The outcome could significantly impact how companies implement AI in recruitment, emphasizing the need for transparency and compliance with anti-discrimination laws. A successful lawsuit may lead to broader legal scrutiny and reforms in AI hiring practices, ensuring fairness and equal opportunity for all job applicants.
References
[1] https://www.pleasantonweekly.com/courts/2025/06/04/discrimination-lawsuit-against-workday-moves-forward/
[2] https://www.independentnews.com/news/pleasantonnews/lawsuit-against-local-company-workday-alleges-unlawful-ai-software-discrimination/article3b2b9d1e-b839-4ac2-8361-dbd4c6e7967f.html
[3] https://www.jdsupra.com/legalnews/ai-bias-lawsuit-against-workday-reaches-5119500/
[4] https://www.itpro.com/business/careers-and-training/workday-faces-lawsuit-over-alleged-ai-bias
[5] https://www.tryhellohire.com/ai-hiring-lawsuit-mobley-v-workday/
[6] https://www.lexology.com/library/detail.aspx?g=b913169b-7c7a-4c17-9d71-e33ec05dfc05
[7] https://www.ere.net/articles/the-ai-hiring-time-bomb-mobley-v-workday-and-the-coming-reckoning
