ATS Provider Workday Faces Class-Action Discrimination Lawsuit
Have you been personally victimized by applicant tracking software (ATS)? Have you spent countless hours entering the same information that’s on your resume into the less-than-intuitive fields of the recruiting software only to receive a boilerplate rejection shortly after hitting submit? Does the experience leave you with a nagging feeling that you might be getting screened out for reasons other than your work history, skills, and education?
You are not alone. Derek Mobley and four other plaintiffs have filed a discrimination lawsuit against Workday in the United States District Court of the Northern District of California. Mobley—a 40-year-old Black man—claims that he had been turned down for more than 100 jobs he applied for through Workday’s platform, blaming the AI algorithms’ biases for this occurrence. Thousands of organizations use Workday’s AI-based applicant screening tools, which can automatically reject or advance applicants.
“Because there are no guardrails to regulate Workday’s conduct, the algorithmic decision-making tools it utilizes to screen out applicants provide a ready mechanism for discrimination,” said Mobley’s lawyers in the lawsuit. Workday denied wrongdoing and moved for the dismissal of the lawsuit, claiming that it engages in an ongoing “risk-based review process” to ensure that its products comply with applicable laws and aren’t engaging in any forms of discrimination.
The class will include individuals aged 40 and over who have been denied employment recommendations for job opportunities through Workday’s job application platform from Sept. 24, 2020, through “the present,” the court said. Workday, however, stated that the company doesn’t offer employment recommendations and that the policy in question is not uniformly applied to all applicants.
The court said that Workday’s website and the company’s discovery responses contradict its claim that it doesn’t recommend applicants. Accordingly, a federal judge allowed (on May 16, 2025) the lawsuit to move forward as a nationwide class action, ruling that the company’s AI-powered hiring tools may have had a discriminatory impact on applicants over age 40.
Everyone in the workforce should pay attention to this, including applicants, employees, HR managers, and hiring managers. Hiring companies should take the following actions immediately:
Audit your vendors. Ask for documentation showing how their systems are tested for bias and require contractual assurances around nondiscrimination and data transparency.
Ensure human oversight. Ensure critical decisions aren’t made solely by automated tools.
Clearly define criteria. Watch out for tools that rely on vague “fit scores” or unexplainable metrics.
Implement standards of governance. Define best practices for implementing AI in your organization. Monitor the outcomes of your AI hiring tools regularly and ensure you have the human touch where necessary.
The Bottom Line
As more companies integrate AI into hiring, this lawsuit represents a pivotal moment. It shows that while AI has the potential to improve hiring efficiency, it also carries risks that cannot be ignored. Employers and AI vendors must navigate this complex landscape carefully, balancing innovation with accountability. If you have any concerns about the integrity of your recruiting software, contact your vendor or seek legal counsel. If you feel that you may be part of the affected class and wish to join the plaintiffs, contact the law firm of Winston Cooks.