A federal judge in California has indicated that Workday, one of the most widely used providers of AI-driven human resources software, may have to defend itself against claims that its hiring technology repeatedly violated state anti-discrimination laws by filtering out job applicants on unlawful grounds.
During a hearing in San Francisco, U.S. District Judge Rita Lin appeared unconvinced by Workday’s argument that California’s employment discrimination protections should not apply when its software evaluates applicants located outside the state who are seeking jobs elsewhere in the United States or abroad.
The judge openly questioned the company’s position, suggesting it seemed unusual to argue that liability should depend entirely on the location of employers using the software. Her remarks signaled skepticism toward Workday’s effort to avoid California-based claims tied to its screening technology.
The lawsuit has drawn significant attention because it is among the first major class-action cases aimed directly at the algorithms powering modern AI hiring systems. The outcome could influence how future legal challenges involving automated recruitment tools are handled.
Artificial intelligence has become deeply embedded in corporate hiring practices. Surveys indicate that a large majority of employers in the United States, including most Fortune 500 companies, now rely on AI-assisted recruitment tools. These systems are often used to review large pools of applications and identify or eliminate candidates before human recruiters become involved.
Critics and worker advocacy groups have long warned that AI systems can inherit biases from the historical data used to train them, potentially leading to discriminatory outcomes. Regulators have also raised concerns about the transparency and fairness of automated employment decisions.
Despite those concerns, legal challenges targeting AI hiring technology have remained relatively rare. Experts have pointed to two major obstacles: many applicants are unaware that automated tools are involved in hiring decisions, and proving discrimination by complex algorithms can be difficult.
The case began in 2023 when Derek Mobley alleged that he had been rejected for more than 100 positions at companies using Workday’s software. Mobley claims the screening process discriminated against him because he is Black, over the age of 40, and lives with anxiety and depression, violating federal employment protections.
Since then, the litigation has expanded. Three additional plaintiffs have joined the case, and the allegations now include broader claims under California’s Fair Employment and Housing Act. Workday is seeking dismissal of the lawsuit, though the latest hearing focused specifically on whether California law can be applied to the plaintiffs’ claims.
Judge Lin has not yet issued a formal ruling, but her comments suggest the company may face an uphill battle in its attempt to narrow the scope of the case before it moves forward.
