Judge Allows Age Discrimination Suit Against Workday AI

A California federal judge ruled that a collective action age discrimination lawsuit against Workday, Inc. may proceed. The plaintiff, Derek Mobley, alleges that the company's AI-powered applicant tracking systems disproportionately screened out job applicants over the age of 40. The suit claims the software used proxies for age, including graduation dates and employment gaps, to filter candidates, violating the Age Discrimination in Employment Act and California's Fair Employment and Housing Act.

Workday sought to dismiss the case by arguing that it is a software vendor rather than the employer making final hiring decisions. However, the court found that the allegations of disparate impact were sufficient to move the case forward. This ruling expands potential legal liability for technology vendors whose AI tools are integrated into corporate hiring processes.

The legal environment surrounding these tools is currently shifting. In April 2025, President Donald Trump signed an Executive Order directing federal agencies to eliminate enforcement based on disparate impact. While this order affects federal agency actions, it does not impact state-level enforcement or private litigation like the Mobley case. Meanwhile, the Equal Employment Opportunity Commission has signaled increased scrutiny of AI-based hiring tools.