Artificial intelligence (AI) is becoming a cornerstone of modern recruitment, offering efficiencies and data-driven insights that are transforming hiring practices. However, the integration of AI in employment processes is not without its challenges, as highlighted by the ongoing legal battle in Mobley v. Workday, Inc. This case serves as a critical example of the potential legal implications of AI use in hiring, particularly concerning disparate impact claims.
Mobley has brought to the forefront significant legal questions about the role of AI vendors in employment discrimination. Derek Mobley, a 40-year-old African American male with anxiety and depression, filed a lawsuit against Workday, alleging that its AI recruitment tools discriminated against him and others based on race, age and disability. Mobley claims he was rejected from over 100 positions that utilized Workday’s AI-powered platform, which he argues disproportionately affected applicants with similar protected characteristics.
In a landmark ruling, the United States District Court for the Northern District of California determined that Workday could be considered an “employer” under U.S. federal employment discrimination laws due to its role as an agent performing traditional hiring functions. This decision hinges on the interpretation that AI tools, which integrate machine learning to recommend or reject candidates, can significantly influence hiring decisions traditionally made by employers. The court’s ruling underscores the potential for AI vendors to be held directly liable for discriminatory outcomes if their tools contribute to disparate impacts on protected groups.
On May 16, 2025, District Judge Rita Lin granted preliminary certification under the Age Discrimination in Employment Act (ADEA), allowing the lawsuit to proceed as a nationwide collective action. This development marks a pivotal moment in the ongoing legal proceedings, as it allows Mobley and four other plaintiffs to represent all job applicants aged 40 and older who were denied employment recommendations through Workday’s platform since September 24, 2020.
The use of AI in recruitment is widespread, with some reports indicating that over 87% of companies leverage AI tools to streamline hiring processes. These tools, including applicant tracking systems and AI-driven interviews, are designed to manage the overwhelming volume of job applications and identify qualified candidates efficiently. However, as the Mobley case highlights, there is a growing concern about the potential for AI to perpetuate biases, whether through data, algorithmic, proxy, or evaluation biases.
The use of AI in recruitment is widespread, with some reports indicating that over 87% of companies leverage AI tools to streamline hiring processes 
For technology professionals, understanding these biases is crucial. Data bias, for example, arises when AI systems are trained on datasets that overrepresent certain groups, leading to skewed outcomes. Algorithmic bias can occur when a developer’s biases inadvertently influence AI coding. Additionally, proxy data bias and evaluation bias can further complicate AI’s role in recruitment by indirectly favoring certain demographics or cultural norms.
To mitigate the risks associated with AI in hiring, technology professionals should consider the following strategies:
1. Conduct Comprehensive Audits: Regularly evaluate AI systems for potential biases. Ensure that training data is representative and that algorithms are tested for fairness and accuracy.
2. Enhance Transparency and Human Oversight: Clearly communicate how AI tools are used in the hiring process. Maintain human oversight to ensure that AI complements rather than replaces human judgment.
3. Stay Informed on Legal Developments: Monitor ongoing legal cases and regulatory changes related to AI in employment. Understanding these developments can help organizations adapt and ensure compliance.
As AI continues to reshape the recruitment landscape, it is imperative for companies to navigate its use responsibly. The Mobley v. Workday case serves as a reminder of the potential legal and ethical challenges posed by AI in hiring. By implementing robust audits, enhancing transparency and maintaining human oversight, organizations can leverage AI’s benefits while safeguarding against discrimination claims and fostering a fair and inclusive hiring process.