Workday AI Hiring Lawsuit: The Algorithmic Bias Case

The Allegations

Workday sells widely used software that many large employers rely on to screen job applicants, including AI-driven tools that help sort and rank candidates. In Mobley v. Workday, the plaintiff — a Black man over 40 who has anxiety and depression — alleges he applied to more than 100 jobs at companies using Workday’s tools and was rejected every time, and that the algorithms discriminated against applicants based on age, race and disability. The case argues that when an AI system screens people out in a biased way, that is unlawful employment discrimination — and that the maker of the AI tool, not just the employers, can be held responsible.

It is one of the first major tests of legal liability for AI-driven hiring.

The Collective-Action Ruling

In a significant 2025 decision, a federal court allowed the age-discrimination claim to proceed as a nationwide “collective action,” potentially covering a large group of applicants aged 40 and older who were rejected after being screened by Workday’s tools. The court also let the case advance on a theory that Workday could be treated as an “agent” of the employers using its software — meaning an AI vendor may be directly liable under anti-discrimination law, not shielded simply because it is a technology provider. The litigation is ongoing, with no ruling yet on whether the tools actually discriminated.

Employment lawyers have called it a wake-up call for any company using AI to make hiring decisions.

What Job Seekers and Employers Should Know

For job seekers, the case highlights that automated screening is now common and can go wrong; if you suspect discrimination in hiring, you can file a charge with the Equal Employment Opportunity Commission (EEOC). For employers, the lesson is that using an AI hiring tool does not outsource legal responsibility — discrimination law still applies, and auditing these systems for bias is increasingly essential.