Judge lets Workday AI hiring bias claims move forward

A federal judge in San Francisco kept alive a closely watched lawsuit over whether Workday’s AI-powered hiring software screened out applicants in ways that violated civil rights law. U.S. District Judge Rita Lin rejected the company’s latest bid to narrow Mobley v. Workday, Inc., a case that began with Derek L. Mobley and later added Jill E. Hughes, Sheilah Johnson-Rocha and Faithlinh Rowe.

The ruling matters far beyond one vendor. It leaves in place disparate-impact claims under Title VII, the Americans with Disabilities Act and the Age Discrimination in Employment Act, along with later-added claims under California’s Fair Employment and Housing Act and Title VII gender allegations. The court also allowed a disability-discrimination theory to move forward based on alleged “proxy indicators,” including gaps in employment history, a sign that courts may be willing to scrutinize the signals automated hiring systems use to sort applicants.

The plaintiffs allege the software discriminated against Black job seekers, women and people older than 40. Court filings also say Mobley applied for more than 100 jobs through Workday-powered systems and was rejected each time, a claim that has helped turn the lawsuit into a wider test of how automated screening can shape access to work. The judge dismissed an Asian-American discrimination claim on procedural grounds, but the core dispute over bias in algorithmic screening remained intact.

Workday denied the allegations and said its AI recruiting tools do not make hiring decisions in California or anywhere else. The company also said it rigorously tested its products through a Responsible AI program. Even so, the case keeps the company exposed to discovery, possible damages and the prospect that it may have to change how it designs, documents or discloses its screening tools.

The legal fight is unfolding against growing pressure on employers and software vendors to show that automated hiring systems are not reproducing old patterns of exclusion at scale. The case survived earlier dismissal rounds in 2024, and the AARP and AARP Foundation were granted leave to file an amicus brief, underscoring age-bias concerns. The Equal Employment Opportunity Commission also filed an amicus brief in April 2024. In California, regulators approved new employment AI rules on June 30, 2025, with an effective date of October 1, 2025, adding another layer of risk for companies that rely on third-party screening tools to manage hiring.