Workday Inc. must face a nationwide class-like lawsuit alleging its algorithm-based screening tools discriminated against job seekers age 40 or over, a San Francisco federal court ruled Friday.
Derek Mobley met the low bar needed for conditional certification of a collective action under the Age Discrimination in Employment Act, the US District Court for the Northern District of California said. He sufficiently alleged the existence of a unified policy—”the use of Workday’s AI recommendation system to score, sort, rank, or screen applicants,” the court said.
The case is one of the first to challenge the use of AI in hiring and other job practices. The Equal Employment Opportunity Commission backed Mobley’s mostly successful bid to block Workday’s motion to dismiss earlier in the case.
The EEOC cited agency guidance, which was later deleted, on assessing adverse impact in the issue of AI, software, and algorithms in employment selection procedures under Title VII of the 1964 Civil Rights Act and the Americans with Disabilities Act.
President Donald Trump signed an executive order April 23 directing the EEOC and the Justice Department to eliminate the use of the disparate impact theory in the enforcement of civil rights laws.
The Friday ruling means that Mobley now can notify similarly situated individuals of the lawsuit and provide them an opportunity to opt-in to having their claims heard on a collective basis. After discovery, Workday would have an opportunity to present evidence that the collective is not, in fact, similarly situated, the court said.
The critical issue at the heart of Mobley’s claims is whether Workday’s system has a disparate impact on applicants over 40, Judge Rita F. Lin said.
That issue is susceptible to common evidence, she said, regardless of the degree to which particular employers place weight on those recommendations, the extent to which the system makes discriminatory recommendations across different employers, or the natural variations in the qualifications or rejection rate for particular members of the proposed collective. For now, this is sufficient, Lin said.
Notice at Issue
Workday raised multiple concerns, including identification of the collective and size. If the collective is in the “hundreds of millions” of people, like Workday says, “that is because Workday has been plausibly accused of discriminating against a broad swath of applicants,” she said. “Allegedly widespread discrimination is not a basis for denying notice,” she added.
The parties should meet and confer on the best way to accomplish that, the judge said. “If necessary, publication notice via social media or electronic notice to applicants using Workday’s platform could be considered, but only if targeted notice cannot be accomplished,” she said.
The suit also claims Workday’s AI systems and screening tools similarly disqualify Black and disabled job seekers at disproportionate and discriminatory rates. The case additionally alleged intentional race and age bias, and Lin previously ruled it could mostly go forward on the disparate impact, or unintentional, bias theory and dismissed the intentional discrimination claims.
Winston Cooks LLC; Greene Estate, Probate & Elder Law Firm; and Wiggins Childs Pantazis Fisher & Goldfarb LLC represent the workers. Orrick, Herrington & Sutcliffe LLP represents Workday.
The case is Mobley v. Workday, Inc.N.D. Cal., No. 3:23-cv-00770, 5/16/25.
