Plaintiff, Derek Mobley, who is more than 40 years old, alleges, on behalf of himself and a class of other applicants over the age of 40, that Workday Inc.’s artificial intelligence applicant screening tool discriminates based on age in violation of the Age Discrimination in Employment Act (ADEA). On May 16, 2025, the US District Court for the Northern District of California granted plaintiffs’ request for preliminary class certification.[1]
While challenges to employee selection procedures are not novel, the Mobley matter raises a significant issue of first impression. Specifically, whether a third- party vendor may be held liable for alleged discrimination against applicants, who were not selected for employment with employers, who use the vendor’s assessment tools. A federal judge says yes.
Factual Background
Mobley filed a complaint against Workday alleging that its artificial intelligence-based applicant screening tools systematically discriminated against him and other job seekers over the age of forty in violation of the ADEA. Mobley claims to have applied to more than 100 jobs using Workday’s talent acquisition system without receiving a single job offer. He alleges that he was not selected because Workday’s AI-based screening tools rank applicants 40 years old and over lower than younger applicants for the same positions.
Workday filed a motion to dismiss the complaint on the grounds that Mobley did not apply for an open position with Workday. Therefore, Workday could not be liable for discrimination under the ADEA. The appropriate defendants are the individual employers, who posted the positions to which Mobley and his fellow class members applied and determined that these applicants were not qualified.
Judge Rita Lin of the U.S. District Court for the Northern District of California disagreed denying Workday’s motion. Judge Lin found that Mobley properly alleged a disparate impact claim under the ADEA allowing the matter to move forward. Subsequently, Judge Lin granted preliminary class certification. Mobley and four other plaintiffs represent all applicants aged 40 and older, who were not recommended for employment by Workday’s platform beginning on September 20, 2020 and continuing to the present day.
Key Takeaways
- Keep a close eye on the Mobley case. This is the first significant challenge to the use of AI in the employment context.
- Disparate impact is still a viable method of proving discrimination. On April 23, 2025, President Trump signed Executive Order 14281, Restoring Equality of Opportunity and Meritocracy directing federal agencies to cease all enforcement actions based on disparate impact theory. The Order does not extend to litigation between private parties.
- Exercise caution when using AI tools to make employment decisions.
- Conduct an in-depth review of the tool and related documentation before implementing AI technology.
- Confirm the job-relatedness of the factors assessed by the tool.
- Request that the vendor share the results of any bias assessments, debiasing efforts, and/or studies of system fairness performed by the vendor prior to purchasing and implementing an AI-based selection device.
- Regularly assess the results of the AI tool for adverse impact. Take corrective action if needed.
[1] Mobley’s initial complaint alleged discrimination based on race, age, and disability status. In response to a motion by Workday, the Court dismissed the race and disability claims.
