Workday Lawsuit: AI Vendor Liability, Age Collective, and Defenses

The Workday AI hiring lawsuit is a federal case, Mobley v. Workday, Inc., in which job applicant Derek Mobley alleges that Workday’s AI-powered recruiting software systematically screens out applicants based on race, age, and disability in violation of federal anti-discrimination law. Filed in February 2023 in the U.S. District Court for the Northern District of California and assigned to Judge Rita F. Lin, the case has survived Workday’s motion to dismiss on disparate-impact grounds and, in May 2025, was granted preliminary certification as a nationwide collective action under the Age Discrimination in Employment Act. It is one of the first cases to test whether the vendor that builds and sells an AI hiring tool, not just the employer that uses it, can be held directly liable when the tool screens out protected groups.

Who Sued Workday and What He Alleges

Derek Mobley is an African American IT professional over the age of forty who lives with anxiety and depression. He holds a finance degree from Morehouse College, is an honors graduate of ITT Technical Institute, is Server+ certified, and has worked since 2010 in financial, IT help-desk, and customer-service roles, including as an advanced solutions engineer contractor at Hewlett Packard Enterprise, a customer service representative at the IRS, and a support specialist and manager at AT&T Digital Life.¹

After a 2017 layoff, Mobley applied to more than 100 positions at companies that use Workday’s platform. The process ran the same way each time: he would find a listing on a site like LinkedIn, get redirected to the employer’s Workday portal, create an account, upload a resume that included his 1995 graduation date and full employment history, and often complete Workday-branded assessments. He was rejected for every one of those applications.²

Two rejections drew particular attention. Applying through the Workday portal for a service solutions technical consultant role at Hewlett Packard Enterprise, where he was already working as a contractor in a role with nearly identical qualifications, he was turned down the following month. In another instance he applied for a customer services specialist position at Unum at 12:55 a.m. and got an automated rejection less than an hour later.¹ Mobley has said that receiving a rejection email from a bot at 1:30 a.m. on a weekend was the moment he concluded AI, not human recruiters, was making the calls.³

His complaint brought claims under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and Section 1981.

What Workday’s Recruiting Software Does

Workday is a major provider of cloud-based HR software. Its recruiting platform uses AI and machine learning to evaluate, score, rank, and recommend candidates based on resume data and employer-defined preferences.⁴ The company markets it as a decision-support tool that keeps human users in charge of the final call.

Workday deepened its AI capability in April 2024 by closing its acquisition of HiredScore, whose technology grades, matches, and prioritizes candidates for recruiters.⁵⁶ The platform also includes a Candidate Skills Match feature that parses job postings and resumes and rates the alignment as “strong,” “good,” “fair,” “low,” “pending,” or “unable to score.”⁷

The case’s central factual dispute is what those tools actually do to applicants. Mobley and the other plaintiffs say the software acts as a gatekeeper: applicants often cannot advance unless they satisfy the screening algorithms, so the AI, not a human, effectively decides who gets an interview and who gets an automatic rejection.² Workday says its tools do not make hiring decisions and cannot identify protected characteristics, and that the AI is tested to confirm it does not harm protected groups under NIST and ISO standards.⁴

The Novel Legal Theory: Suing the AI Vendor

Rather than sue the employers who used Workday’s platform to reject him, Mobley sued the software vendor itself. His complaint argued that Workday functions either as an “employment agency” or as an “agent” of the employers under federal anti-discrimination statutes.⁸

The Equal Employment Opportunity Commission backed that theory in an April 9, 2024 amicus brief, approved by a 3-2 commission vote. The EEOC argued Workday performs the same screening and referral functions as traditional staffing agencies, just through “more sophisticated means,” and that the platform “actively intervenes to suggest or promote certain candidates” and “actively makes automated decisions to reject or advance job candidates.” Allowing AI intermediaries to escape liability where direct employers cannot, the brief said, would render the promise of equal employment opportunity “hollow.”⁹¹⁰

What the Court Has Ruled So Far

On July 12, 2024, Judge Lin issued a mixed ruling on Workday’s motion to dismiss.¹

The agent theory survived. The court found Mobley plausibly alleged Workday acts as an agent of its employer-clients because those clients delegate the traditional hiring functions of screening and rejecting candidates to Workday’s software. Judge Lin distinguished the platform from tools like spreadsheets or email, writing that Workday “is not simply implementing in a rote way the criteria that employers set forth, but is instead participating in the decision-making process by recommending some candidates to move forward and rejecting others.”
The disparate-impact claims survived. Mobley’s zero-percent success rate across more than 100 applications, combined with the timing of automated rejections and allegations about biased data models, was enough to state a plausible claim.
The employment-agency theory was dismissed without leave to amend. The court found Mobley had not shown Workday “procures” or recruits employees, since he sought out job postings on his own.
The intentional-discrimination claims under Title VII, the ADEA, and Section 1981 were dismissed without leave to amend. The court said awareness of possible adverse consequences is not the same as intent to discriminate.

Judge Lin framed the stakes bluntly, reasoning that drawing “an artificial distinction between software decisionmakers and human decisionmakers would potentially gut anti-discrimination laws in the modern era.”¹¹

In January 2026, Judge Lin also dismissed part of the plaintiffs’ second amended complaint, finding it lacked sufficient factual allegations that unlawful conduct occurred within California, though she allowed the plaintiffs to amend again.¹²

The Nationwide Age-Discrimination Collective

On May 16, 2025, Judge Lin granted preliminary certification of a nationwide collective action under the ADEA. The collective is defined as “all individuals aged 40 and over who, from September 24, 2020, through the present, applied for job opportunities using Workday, Inc.’s job application platform and were denied employment recommendations.”¹³

Four additional opt-in plaintiffs, all over forty, have joined Mobley. They say they submitted hundreds of applications through Workday’s system and were rejected nearly every time, often by automated emails for jobs they were qualified for.⁷ The court found that whether Workday’s AI recommendation system has a disparate impact on applicants over forty is a question common to the group. The parties were ordered to develop a plan for notifying potential collective members, potentially through social media or electronic notice via Workday’s platform if targeted notice proves impractical. Workday retains the right to seek decertification later.

Workday’s Defenses

Workday has denied the allegations. A company representative called the claims “false” and said the tools are “designed with human oversight at their core.”¹² Its principal legal arguments run along several lines.

Workday says it does not “recommend, screen out, or otherwise assess or predict applicants’ likelihood of success in a role,” so no one was “denied employment recommendations” and the collective has no members.⁷
Employer-clients choose whether to enable or disable specific AI features. Any adverse outcome, Workday says, reflects employer-driven preferences rather than its algorithms.
Workday’s Assessment Connector functions as a bridge to third-party AI, not proprietary Workday technology.
The proposed collective is improper because individual experiences varied: some applicants were qualified, some were not, some omitted age data, and some received job offers, so members are not similarly situated.

Where the Case Stands Now

As of mid-2026, the case is deep into discovery, with fights over what evidence the plaintiffs can see. On May 29, 2026, Magistrate Judge Laurel Beeler resolved three pending disputes: she denied the plaintiffs’ motion to compel Workday’s internal bias-testing data, finding it protected by attorney-client privilege; denied the motion to compel customer applicant data, ruling that Workday lacks sufficient control over its clients’ data to be compelled to produce it; and granted the motion to compel EEO-1 and OFCCP filings, finding these government-filed workforce demographic documents relevant to what Workday knew about disparities in its tools.¹⁴ No trial date or summary judgment schedule has been publicly reported.

Why This Case Matters Beyond Workday

Roughly 87 percent of companies now use AI for some part of recruitment, according to 2025 industry data.¹⁵ Enforcement so far has mostly targeted employers. The EEOC settled its first AI hiring discrimination case in August 2023, when iTutorGroup paid $365,000 for using a tool that automatically rejected female applicants over 55 and male applicants over 60.¹⁶ In March 2025, the ACLU of Colorado filed an EEOC complaint against Intuit and HireVue over an AI video-interview platform that allegedly scored a deaf and Indigenous employee lower based on her communication style; both companies called the allegations “entirely without merit.”¹⁷

State regulators are moving in the same direction. California’s Civil Rights Council enacted rules effective October 1, 2025 that treat third-party AI vendors as potential “employers” for liability purposes under the Fair Employment and Housing Act, require employers to retain data used in or produced by automated systems for four years, and note that proactive bias testing may be relevant to a defense.¹⁸ Illinois, New York City, and Colorado have added notice requirements or independent bias audit mandates.¹⁹

What separates Mobley v. Workday is its focus on the vendor. If the plaintiffs prevail, the company that builds and sells an AI hiring tool could be held directly answerable under federal anti-discrimination law when that tool screens out protected applicants at scale, a shift with major consequences for an industry whose HR software touches millions of applicants across thousands of employers.

1
Findlaw. Derek Mobley v. Workday, Inc.
2
Civil Rights Litigation Clearinghouse. Mobley v. Workday, Inc.
3
University of Miami Law Review. Help Wanted, Screened by Algorithms: Mobley v. Workday and the Legal Limits of AI Hiring
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Workday. Demystifying AI Hiring: Clarifying How Workday’s Recruiting Tools Work
5
Workday Newsroom. Workday Announces Intent to Acquire HiredScore
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Workday. Workday Acquisition of HiredScore
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GovInfo. Mobley v. Workday, Inc., Order Granting Preliminary Collective Certification
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EEOC. Mobley v. Workday, Inc.
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EEOC. Mobley v. Workday, Inc., EEOC Amicus Brief
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Bloomberg Law. Workday AI Bias Case Tests EEOC Definition of Employment Agency
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Cornell Law School. AI HR: Algorithmic Discrimination in the Workplace
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Courthouse News Service. Workday Asks Judge to Dismiss Suit Over Claims Its AI Tools Discriminate Against Job Applicants
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Columbia Black Pre-Law Society. Mobley v. Workday and AI Discrimination
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Duane Morris. California Federal Court Clarifies Limits on AI Bias Testing and Applicant Data Disclosure in Mobley v. Workday
15
Forbes. What the Workday Lawsuit Reveals About AI Bias and How to Prevent It
16
American Bar Association. Navigating the AI Employment Bias Maze
17
HR Dive. ACLU Files AI Discrimination Complaint Against HireVue and Intuit
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Duane Morris. AI Catches Up: California Employers Regulations on Automated Decision Systems Now in Effect
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American Bar Association. Recent Developments in Artificial Intelligence Cases and Legislation