Workers Challenge Workday Over Alleged Bias in AI-Powered Hiring

A legal battle involving Workday is examining who could be held responsible when AI-powered recruitment software allegedly produces discriminatory outcomes for job applicants.

A group of applicants has asked a federal judge in San Francisco to allow their employment discrimination lawsuit against the human resources software company to proceed as a class action. The case originated with Black applicant Derek Mobley, who says he was rejected from more than 100 positions at companies using Workday's AI-based hiring tools.

The plaintiffs argue that the issue is not whether an AI system acted unexpectedly, but whether a system operating according to its design can continue patterns of discrimination reflected in the data used to develop it.

Workday denies the allegations. The company says its AI tools evaluate job qualifications rather than protected characteristics such as race, age or disability. Workday also argues that the plaintiffs cannot satisfy the requirements for class certification.

The case began in 2023 after Mobley reported repeated rejections for positions in areas including finance, IT help-desk work and customer service. His lawyers chose to pursue claims against Workday rather than the individual companies where he applied.

Workday says its recruiting software is customizable and that its customers determine how applications are sorted, reviewed and rejected. The plaintiffs, however, argue that the technology itself can contribute to discriminatory results.

They cite statistical evidence alleging that Workday's tools disproportionately screen out African American, female, older and disabled applicants. They also argue that using existing workforce data to train recruitment systems can carry forward biases already present in that data.

In 2024, U.S. District Judge Rita Lin allowed the case to continue while rejecting allegations that Workday deliberately designed its tools to discriminate. She found that the plaintiffs had plausibly claimed the technology could create a disparate impact.

The legal theory of disparate impact can hold employers responsible when a seemingly neutral employment practice disproportionately harms a protected group and cannot be justified by business necessity. Although the federal government under the Trump administration has stopped pursuing disparate-impact cases, private parties can still bring such claims.

Judge Lin also rejected the idea that employment discrimination rules should treat automated decision-making differently simply because software, rather than a person, is involved.

The case now faces another significant stage: determining whether it can proceed as a class action. In 2025, Lin had already allowed the age-discrimination portion of the case to proceed as a collective action, which requires individuals to actively join.

The plaintiffs are now seeking certification for four groups covering African American applicants, women, people over 40 and people with disabilities who applied for jobs and were subjected to the disputed screening process.

The potential scope is large. According to the plaintiffs, citing Workday testimony, more than 356 million applications were submitted through Workday Recruiting in 2024, while more than 27 million job offers were made.

The plaintiffs are seeking remedies including back pay, front pay and punitive damages.

A major issue for class certification is whether the alleged discrimination can be linked to common characteristics of Workday's technology rather than to individual hiring decisions made by the companies using the software. Because applicants applied to different employers and positions, the defense may argue that their individual circumstances make a common class difficult to establish.

A hearing on class certification is scheduled for March 9, 2027.