Workday accused of AI bias in job selection, faces California employment technology lawsuit

Workday’s AI control software criticized for discriminatory bias
Recruiters usually bear the blame, but human replacement software could be responsible
The case must also consider AI much more broadly, including historical biases and shifting responsibilities.

At a June 2026 hearing, Judge Rita Lin suggested she might likely reject Workday’s latest attempt to dismiss claims filed under California law over a 2023 discrimination case.

Three years ago, Derek Mobley accused the company of firing him from more than 100 jobs after he applied through the company’s recruiting systems on the grounds that he was black, over 40 and suffering from anxiety and depression.

But rather than suing individual employers, Mobley is suing Workday itself, arguing that its AI-powered recruiting software is responsible for discriminatory actions.

Workday set to face lawsuit over AI-based recruiting software

Workday argued that California’s employment discrimination laws should not apply when applicants live – or jobs are located – outside of California.

PK Press Club notes that more than four in five U.S. employers and nearly all Fortune 500 companies now use AI-based recruiting or candidate screening tools, and the current case marks a significant potential shift in its regulation.

Previously, employers were liable for discriminatory hiring, but the lawsuit now examines whether software developers and AI providers should bear some liability.

At an earlier hearing in 2024, the judge questioned whether Workday could also be considered an employer because it performs screening tasks that would typically be performed by human workers within HR teams.

While this specific case concerns Workday, the court must also explore how training data can influence bias and who is responsible for the outcome – the results could have a much bigger impact than just a fine for Workday.

“Our technology only takes into account professional qualifications, not protected characteristics like race, age or disability,” the company added in a statement.

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