Financial and human capital software provider Workday Inc. should face allegations that its artificial intelligence-powered software violates federal anti-discrimination laws when it screens out job applicants for other employers, according to an amicus brief submitted last week by the US Equal Employment Opportunity Commission.

Filed April 9 in San Francisco federal court, the EEOC’s brief urged a federal judge to reject Workday’s pending motion to dismiss a case on grounds that it is not an employer or employment agency under Title VII and other discrimination laws, Reuters reported.

The proposed class action lawsuit was first submitted in February 2023 by Derek Mobley, a 40-plus year-old Black male who suffers from depression and anxiety. Since 2018, Mobley has applied unsuccessfully for at least 80 to 100 positions that use Workday as a screening tool for talent acquisition and/or hiring, according to the suit. It alleges Workday “provides screening tools that allow its customers to use discriminatory and subjective judgments in reviewing and evaluating employees for hire and allows the preselection of applicants outside of the protected categories.”

The case is Mobley v. Workday Inc, U.S. District Court for the Northern District of California, No. 3:23-cv-00770

The EEOC’s brief took no position on the accuracy of Mobley’s assertions but stated the First Amended Complaint alleges that Workday’s algorithmic tools dictated whether applicants were referred to — and thus considered by — employers; Workday systems made automated decisions on behalf of employers to reject certain candidates; and the Workday platform was the exclusive point of entry for many job opportunities.

“Accepting the allegations in the FAC as true, as the court must at the pleading stage, Workday is a type of intermediary that Congress meant federal anti-discrimination laws to cover,” EEOC lawyers wrote in the brief.

“Mobley has plausibly alleged that Workday’s algorithmic tools perform precisely the same screening and referral functions as traditional employment agencies — albeit by more sophisticated means,” it states.

US District Judge Rita Lin is scheduled to hold a hearing on May 7 on Workday’s motion to dismiss.

“We believe this lawsuit is without merit and deny the allegations,” a Workday spokesperson told SIA in an emailed statement. “As a leading provider of finance and HR software, Workday is a technology company – not an employment agency. We are focused on delivering products designed to be configured and used by customers to best support their needs. We do not have oversight or control of our customers’ job application processes, and likewise, our customers do not delegate control to us in regards to their hiring processes.”

The EEOC in August 2023 settled its first AI hiring bias lawsuit, which charged that China-based iTutorGroup Inc. — which provides English-language tutoring services to students in China — programmed its AI-powered online recruitment software to automatically reject older candidates. The company agreed to pay $365,000 to approximately 200 people who applied for jobs in March and April 2020. More such lawsuits are expected as the use of AI in employment increases.