Workday, Artificial Intelligence, and the Future of Employment Discrimination

 Employment Testing: Failing to Make the Grade — Ten Years Later, Part 4

In 2013, this blog warned that commercially developed employment assessments could create widespread legal exposure when used by large numbers of employers.

In 2016, its final post addressed the need to measure the consequences of artificial intelligence and automated decision-support systems.

A decade later, those concerns have emerged in a major federal employment discrimination lawsuit.

Mobley v. Workday, Inc., No. 3:23-cv-00770, pending in the U.S. District Court for the Northern District of California, challenges the use of automated applicant-screening technology on grounds that include alleged discrimination based on age, disability, race, and sex.

The litigation raises questions about employment screening that extend well beyond Workday.

The Allegations

The lead plaintiff, Derek Mobley, alleges that he repeatedly applied for positions through employers using Workday's applicant-screening technology without obtaining employment.

He contends that the company's screening systems unlawfully disadvantaged applicants based on protected characteristics.

Mobley alleges that he is over 40 and has depression and anxiety. His disability-related allegations are particularly relevant to concerns this blog raised more than a decade ago about screening systems that may disadvantage people with mental health conditions.

Workday disputes the allegations.

The case remains pending, and no court has determined that Workday's screening technology actually engaged in unlawful employment discrimination.

Can a Software Vendor Be Liable?

One of the most significant developments occurred in July 2024.

The district court permitted certain discrimination claims against Workday to proceed under a theory that the company could qualify as an employer's agent when performing screening functions delegated by employers.

The decision did not establish that Workday was legally responsible for discriminatory hiring decisions.

It did, however, reject the proposition that the company's status as a third-party software vendor necessarily insulated it from liability.

That distinction is important.

As employment screening becomes increasingly automated, responsibility for applicant selection may be divided among employers, software vendors, consultants, and other entities.

The law must determine which entities exercise sufficient control over screening functions to bear responsibility under the relevant statutes.

This was one of the central concerns raised in this blog's August 2013 post, When the First Domino Falls.

The Scale of the Litigation

In May 2025, the court conditionally certified a nationwide collective action involving applicants aged 40 and older under the Age Discrimination in Employment Act. By October 2026, more than 15,000 individuals had opted into that collective action.

In September 2026, plaintiffs separately moved to certify additional classes, including one involving applicants with disabilities. 

Conditional certification does not establish that any applicant was discriminated against. It permits claims to proceed collectively while issues of eligibility, proof, and liability remain unresolved.

The case illustrates the potential scale of litigation involving a widely used applicant-screening platform.

A single product may be involved in hiring processes conducted by numerous unrelated employers, making its design, implementation, and actual effects important subjects of discovery.

What About Mental Health Conditions?

In June 2026, the court allowed a disability-discrimination claim involving alleged disability-related proxy indicators to survive a motion to dismiss. 

This ruling permits the claim to proceed but does not certify a disability-discrimination class or establish that Workday discriminated against applicants with disabilities. 

The separate request to certify a disability class remains pending.

This issue deserves particular attention.

An automated system may not explicitly ask whether someone has depression, anxiety, or another mental health condition. Nevertheless, it may evaluate information—such as certain employment gaps—that could be associated with disability.

Whether such criteria violate the ADA depends on the facts and applicable legal standards, including whether the screening practice unlawfully excludes qualified individuals with disabilities.

The existence of a correlation alone does not establish discrimination.

But it does provide a reason to examine what the system measures, why those measures were selected, and how they affect applicants.

These are substantially the same questions this blog raised when examining personality assessments, statistical prediction, and employment discrimination in 2013.

The Role of Federal Regulators

The Equal Employment Opportunity Commission issued technical assistance in 2022 and 2023 discussing the application of existing employment discrimination laws to AI-assisted hiring.

Those materials were removed from the agency's website in early 2025 following changes in federal administrative policy.

Their removal did not repeal the ADA, the Age Discrimination in Employment Act, or Title VII.

Nor did it eliminate employers' obligations to use lawful selection procedures.

The underlying statutory questions remain, regardless of the technology used to evaluate applicants.

Ten Years Later, the Questions Remain

The Workday litigation has not yet answered whether the company's particular screening systems violate employment discrimination laws.

But it demonstrates why the concerns raised in Employment Testing: Failing to Make the Grade remain relevant.

The same underlying issues persist:

Can a screening system disadvantage people with disabilities without explicitly identifying their conditions?

Can software trained on historical employment information reproduce existing bias?

How should employers establish that an assessment measures legitimate job qualifications?

And who bears responsibility when a third-party system allegedly discriminates against applicants across numerous employers?

Artificial intelligence has made employment screening faster and potentially more sophisticated.

It has not eliminated the need for lawful, transparent, and properly evaluated hiring practices.

Ten years later, the question is not whether computers can help employers make hiring decisions. It is whether those decisions are fair, legally defensible, and genuinely related to an applicant's ability to perform the job.

That remains the test employment screening must pass.