Federal Court Lets AI Employment Discrimination Case Against Workday Move Forward

by Anna D’Agostino and Elise M. Wilson

Court Allows Collective Action Over Alleged AI Age Discrimination

On May 16, 2025, a federal judge in the U.S. District Court for the Northern District of California ruled that Mobley v. Workday, Inc., a collective action alleging AI-based age employment discrimination, will proceed. The lawsuit claims that Workday violated the Age Discrimination in Employment Act (“ADEA”) because its artificial intelligence-based applicant recommendation system discriminated against users by quickly rejecting potentially hundreds of millions of applicants over age 40.

Having already found that the plaintiff’s claims are plausible, the Honorable Rita Lin preliminarily certified a collective of Workday applicants aged 40 and over who were denied employment recommendations from Workday’s platform beginning on September 24, 2020, and continuing through the present.

Workday’s Role in Employment Screening

Workday is a human resource management screening service which companies purchase and use through a subscription. Workday provides hiring, recruitment, and onboarding services to businesses across a wide variety of industries, including “medium-sized and large, global organizations that span numerous industry categories, including professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality.”

One such service is Workday’s applicant screening tool, which scores, sorts, ranks, or screens applicants “to process and interpret an applicant’s qualifications and recommend whether the applicant should be accepted or rejected” by the potential employer. Often, applicants must score well on the screening tool to advance receive employer consideration and advance through the hiring process.

How Did Workday’s AI Allegedly Discriminate Against Older Applicants?

Derek Mobley, who is joined by four additional opt-in plaintiffs, filed the lawsuit in February 2023. Mr. Mobley and the other plaintiffs applied for hundreds of jobs on Workday, yet were rejected from the opportunities without an interview offer. Mobley alleges Workday’s applicant screening tools use biased employer preference and training data linked to age to make a recommendation to employers about whether they should accept or reject an applicant, resulting in algorithmic discrimination against the protected class of individuals age 40 and over. Mobley further alleges that by providing access to employment opportunities, Workday is an indirect employer.

What Was Workday’s Argument Against Certification?

Workday objected to Mobley’s request to preliminarily certify the collective, arguing that the impact of the AI features could vary across applicants. However, the Court was unpersuaded by the potential for variation. Judge Lin explained that “[i]n nearly every large disparate impact case, certain units of the whole—for example, regions of a national company or divisions of an organization—will demonstrate the effects of a unified discriminatory policy to a greater or lesser extent than others, or may demonstrate no discriminatory effect at all. But where a unified policy exists and the net disparate impact of that unified policy can be proven through statistical evidence, such unit-level differences do not defeat the prima facie discrimination case.”

The Court also rejected Workday’s arguments that the potential collective would be hundreds of millions of people, holding that “[t]he estimated size of the collective does not provide a basis to withhold notice either.” Judge Lin reasoned that the question of “[w]hether Workday’s AI recommendation system has a disparate impact on applicants over forty” and the claims of the member plaintiffs will “rise and fall together,” satisfying the collective action requirement that the plaintiffs be similarly situated.

Why Is This AI Bias Case Significant?

This lawsuit is one of the first AI hiring bias and algorithmic discrimination challenges in federal court. It serves as a good reminder that auditing AI technology used in the hiring process is critical to avoid potential discrimination. Although employers may think they cannot be liable for a software or service they did not program, plaintiffs notably do not need to prove an intent to discriminate when bringing disparate impact theory cases under the ADEA.

Additionally, even when used differently by various employers, AI screening systems may constitute the same uniform policy in the Court’s view. Employers and AI vendors must prudently monitor their applicant screening systems for disparate impact against protected classes to avoid AI employment discrimination.
The case caption for this AI bias lawsuit is Mobley v. Workday, Inc., case number 3:23-cv-00770-RFL, filed in the Northern District of California.

How Can Miller Shah Help With AI and Employment Discrimination Cases?

Miller Shah is not counsel in Mobley v. Workday but is experienced in supporting clients facing discrimination in the workplace and in litigating complex collective and class action employment discrimination cases. Our attorneys stay up to date on emerging artificial intelligence technologies and the potential for AI-driven hiring bias that can lead to algorithmic discrimination and resulting lawsuits, like Mobley v. Workday. For questions about this post or about the impact of AI on employment discrimination, contact Miller Shah today.