As businesses integrate AI tools into operations, a spike in related litigation is no surprise, especially due to the lack of formal legal precedent. Last month, a federal court in the Northern District of California provided some much-needed guidance when it granted a motion to preliminarily certify a collective in a lawsuit alleging that an AI-based applicant screening system discriminated against individuals aged 40 and older.
In Mobley v. Workday, Inc., the plaintiffs claimed they received hundreds of rejections without interviews after applying for jobs through Workday—a provider of human resource management software, including platforms connecting employers with job applicants. According to the plaintiffs, Workday’s AI-driven applicant filtering algorithm disproportionately disqualified individuals over 40 from employment opportunities.
Plaintiffs sought preliminary certification of a nationwide collective under the Age Discrimination in Employment Act (ADEA), proposing a collective of “All individuals aged 40 and over who, from September 24, 2020, through the present, applied for job opportunities using Workday, Inc.’s job application platform and were denied employment recommendations.”
Workday opposed certification on several grounds, arguing: (i) it does not offer “employment recommendations,” and therefore no applicants belong to the proposed collective, (ii) the policy at issue was not uniform across applications or employers, (iii) variations in applicants’ qualifications and the types of jobs applied to made it impossible to consider the group similarly situated.
On May 16, 2025, Judge Rita Lin granted preliminary certification of the proposed collective. Judge Lin found that evidence showed Workday was sufficiently involved in the hiring process for a collective to be certified. She held that the proposed collective was similarly situated, emphasizing that Mobley had alleged the existence of a unified policy—the use of Workday’s AI system to score, sort, rank, or screen applicants. Judge Lin further held that exact uniformity among collective members was not necessary; rather, the essential commonality was that they were allegedly forced to compete on unequal footing due to the same AI-based decision-making process. The Court’s Order made an extra effort to remind Workday that this order is preliminary in nature and that Workday could, with evidence derived from discovery, ask the Court to revisit the preliminary decision and decertify the collective, requiring each plaintiff to proceed individually.
This decision marks a significant moment in the evolution of AI and employment law. As AI becomes more embedded in business processes, litigation concerning algorithmic bias and discrimination is expected to grow. In fact, in March 2025, the California Civil Rights Council adopted final regulations on automated decision-making systems, including AI-powered hiring tools like the one at issue in Mobley v. Workday.
Employers should anticipate increased legal scrutiny and potential class or collective actions as regulatory bodies and courts continue to address the implications of AI in employment decisions. The importance of consulting an attorney before deploying AI systems in hiring and HR processes cannot be sufficiently stressed.
CDF’s Privacy Practice Group will continue to monitor developments related to privacy issues, CIPA, CCPA, CPRA and the California Privacy Protection Agency’s enforcement actions. Please contact a member of CDF's Privacy Practice Group (Dan Forman, Linda Wang, or Dalia Khatib) to discuss compliance with privacy laws, any investigation by the California Privacy Protection Agency or with any questions about CIPA, CCPA & CPRA. Our Privacy Practice Group is available to assist with policies, notices, general compliance for employers, and the defense of investigations and litigation.
