California Labor &
Employment Law Blog
Employer Paying Six Figure Settlement Based on EEOC Claims that AI Software Discriminated Against Older Applicants. 
Aug 10, 2023

Employer Paying Six Figure Settlement Based on EEOC Claims that AI Software Discriminated Against Older Applicants. 

Topics: AI in the Workplace, Employee Hiring, Discipline & Termination, Legal Information, Personnel Policies and Procedures

Bloomberg Law reported earlier today that the Equal Opportunity Commission (“EEOC”) reached a settlement for $365,000 with iTutorGroup, Inc. after the federal agency filed a complaint against the employer alleging that its artificial intelligence (“AI”) software automatically rejected female tutor applicants over 55 and male tutor applicants over 60. 

According to the complaint, the age exclusion was discovered when a rejected applicant submitted a new identical application with a more recent birth date. The EEOC claimed over two hundred applicants were adversely affected.  

Although this is not a California complaint/settlement, this is the first AI case settlement we are aware of. The case and settlement illustrate that the EEOC is willing to aggressively prosecute cases in the AI area as part of its Artificial Intelligence and Algorithmic Fairness Initiative. This settlement should not be ignored by the employer community and it further emphasizes the need for California employers who use artificial intelligence for recruiting/screening to:

  1. Ensure they understand how the software is screening applicants; 
  2. Become familiar with the guidelines and technical assistance that is out there including the EEOC Technical Assistance Publication: Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964 which we wrote about previously back in May;
  3. Monitor AB 331 now pending in the California Assembly, which if passed would regulate how employers can use automated decision tools such as artificial intelligence and give the state the right to prosecute violations of the bill’s provisions; and 
  4. Monitor the California Civil Rights Council’s proposed regulations regarding AI and automated decision-making systems. 

If you have concerns about using artificial intelligence in your California recruiting and screening process, please contact the author of this article or your favorite CDF attorney.

About CDF

For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor in Chief

Sacramento Office Managing Partner and Chair of CDF’s Traditional Labor Law Practice Group. Mark has been practicing labor and employment law in California for thirty years. His practice has a special emphasis on the representation of California employers in union-management relations and handling federal and state court litigation and administrative matters triggered by all types of employment-related disputes. He is also adept at providing creative and practical legal advice to help minimize the risks inherent in employing workers in California. He recently named “Sacramento Lawyer of the Year” in Employment Law-Management for 2021 by Best Lawyers®.
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