New England Biz Law Update
The HR software provider Workday has asked a federal court to dismiss disparate impact age bias claims brought by job applicants, arguing that the Age Discrimination in Employment Act (ADEA) does not authorize such claims by applicants who have not been hired.
The argument was made in filings in the U.S. District Court for the Northern District of California, where the case has been proceeding as a nationwide collective action.
The plaintiffs allege that Workday’s automated hiring tools – used by employers to screen and rank applicants – disproportionately exclude older applicants from consideration, in violation of federal age discrimination law.
Workday contends that while the ADEA prohibits age bias against employees, its “plain language” does not allow job applicants to bring disparate impact claims when they were never hired. The company cited decisions from the 7th and 11th U.S. Circuit Courts of Appeals holding that the ADEA does not permit disparate impact claims by applicants as support for its position.
The lawsuit, originally filed in 2023, was conditionally certified as a collective action, and earlier rulings in the case allowed age discrimination claims to proceed based on plaintiffs’ allegations that the AI-based screening tools limited their employment opportunities.
The case has drawn attention for the broader legal questions it raises about algorithmic hiring and access to employment opportunities. Unresolved legal questions remain about how traditional anti-discrimination statutes like the ADEA apply to AI-assisted hiring systems and applicants who never became employees.
Employers that use algorithmic tools for screening and ranking candidates should be aware that litigation over disparate impact theories may extend beyond hired employees to applicants, depending on how courts interpret statutory protections and AI’s role in early hiring stages.
