EEOC reaches first workplace AI settlement

Last month, a tutoring company reached a settlement with the EEOC in the amount of $365,000 in a case involving an artificial intelligence (AI) selection tool that automatically rejected older applicants.

Recently, the EEOC has cautioned employers about the possibility of discrimination when using AI in hiring and other workplace decisions, including launching an Artificial Intelligence and Algorithmic Fairness Initiative.

In its May 2022 complaint against iTutorGroup, the EEOC alleged that the company programmed its application review software to automatically reject female applicants aged 55 or older and male applicants aged 60 or older.

The case arose when one applicant who was rejected resubmitted their application with a more recent birth date and was then called for an interview.

The applicant filed a charge with the EEOC, which sued the employer in U.S. District Court for the Eastern District of New York on behalf of more than 200 applicants, claiming age and gender discrimination.

“Age discrimination is unjust and unlawful. Even when technology automates the discrimination, the employer is still responsible,” said EEOC Chair Charlotte A. Burrows in a statement when the lawsuit was filed in May 2022. “This case is an example of why the EEOC recently launched an Artificial Intelligence and Algorithmic Fairness Initiative. Workers facing discrimination from an employer’s use of technology can count on the EEOC to seek remedies.”

iTutorGroup denied wrongdoing but agreed to settle early on, soon after the EEOC filed the suit.

Under the settlement, iTutorGroup agreed to implement new anti-discrimination policies, disseminate an internal memo, offer all applicants rejected due to age during the relevant time period the opportunity to reapply, hold multiple anti-discrimination trainings, give the EEOC written notice of any discrimination complaints from applicants or employees, and stop asking applicants for their birthdates.

The settlement is a wake-up call to employers to carefully monitor all AI tools used in hiring for discrimination. It also reminds any employers who request ages in hiring to stop doing so.