A court let Workday be sued as an employer's 'agent' for the AI that screens applicants

What Mobley says the screening did to him

Before a recruiter at many large companies ever sees a job application, software from Workday has already sorted it. Workday sells human-resources tools that employers use to run hiring, and its products score, rank, and move candidates through the early stages. The company's own marketing describes the software as able to reduce time to hire by automatically dispositioning or moving candidates forward.¹

Derek Mobley is one of those applicants. In a lawsuit he filed in 2023, he says he applied to more than 100 jobs at companies that screen through Workday and was turned down by every one, a zero-percent success rate at the first cut.¹ Mobley, who is Black and over 40 and says he has a disability, alleges the pattern traces to those traits. It was Workday's tools, he says, not just the employers, that did the rejecting.¹ None of that has been proven. It is what his complaint alleges, and to reach the question the case is about, the court has so far only assumed it true.

How a fair-looking screen still filters out a group

The kind of discrimination Mobley alleges has a name in employment law: disparate impact. A selection procedure has a disparate impact when it looks neutral, applying the same rule to everyone, but still picks one protected group at a meaningfully lower rate than another.² No intent is required. The principle comes from a 1971 Supreme Court case, Griggs v. Duke Power. The Court held that Title VII bars practices that are “fair in form, but discriminatory in operation.” Good intentions, it said, do not save practices that act as “built-in headwinds” for a protected group while measuring nothing about the job.³

How can an outsider tell whether a screen has that effect? The EEOC, the agency that enforces Title VII, uses a rule of thumb called the four-fifths rule. Compare the share of each group that gets through. If one group's rate is less than four-fifths, or 80 percent, of the highest group's rate, that is a preliminary sign of adverse impact worth looking into.² The agency's own worked example makes it concrete.

A rule of thumb is usually all an outsider gets, because the disparity is invisible from any one desk. An applicant sees a single rejection, never the selection rates behind it, and never the screen that produced it. The scoring is a vendor's product, shown to no one it sorts.² A pattern shows up only across many decisions. Mobley could point to one because he had been rejected more than 100 times, and the thing common to all those different employers was the screen they shared.¹

That is a different problem from the one an earlier lesson covered. Amazon built its own resume screener, found it had taught itself to downgrade women, and scrapped it before it judged a real applicant. A model trained on a company's past hiring can copy the bias in it, one way these tools go wrong. But Amazon's screen was internal, and only Amazon could ever have answered for it. Workday's screen is a product sold to many employers at once, which makes the question the court faced a new one.

The ruling that put the software vendor on the hook

The old rule about who answers for a hiring decision was simple: the employer. A company could buy screening tools from a vendor, but if the hiring discriminated, the employer was the one a rejected applicant sued.¹ The vendor sold a product and stood outside the relationship. Mobley's suit asks a court to let him sue the vendor instead. The theory runs through one word in the anti-discrimination statutes: “employer” is defined to include an employer's “agent.”¹ If a company hands a core piece of hiring to an outside party, the argument goes, that party can be treated as the employer's agent and answer as an employer would.

In July 2024, Judge Rita Lin agreed the theory could proceed. Ruling only on whether Mobley had pleaded a plausible claim, not on whether Workday had actually discriminated, she held that an employer “cannot escape liability for discrimination by delegating [its] traditional functions, like hiring, to a third party.”¹ That the deciding runs through artificial intelligence rather than a person reading resumes, she wrote, does not change the analysis.¹

The federal government had pushed for this. The EEOC filed a brief arguing Workday is covered as an agent because employers had given it authority to make at least some hiring decisions.⁴ The agency took no position on whether Workday's tools discriminate. Its argument was only about who can be held to answer if they do.⁴

That ruling was one step in a longer case.

1. 2023

   Mobley sues Workday¹

   After more than 100 rejections, he brings discrimination claims against the software vendor rather than the employers that turned him down.

2. July 2024

   The agent theory survives¹

   Judge Lin lets the disparate-impact claims proceed against Workday as an employer's agent, and dismisses the separate claims of intentional discrimination.

3. May 2025

   A nationwide collective⁵

   The court conditionally certifies an age-discrimination collective: applicants 40 and older screened by Workday's AI since September 2020, who may now be notified and opt in.

4. July 2025

   The scope widens⁶

   For now the collective also covers applicants screened by HiredScore, an AI recruiting product Workday bought after the suit began.

5. March 2026

   Still in the pleadings⁷

   The court again refuses to throw out the age claim and lets new plaintiffs join. Three years in, no court has weighed whether Workday's tools discriminate.

None of that is a finding against Workday, and its defenses are still standing. Workday says it “does not recommend, screen out, or otherwise assess or predict applicants' likelihood of success in a role.” Employers can switch its AI features on or off or ignore them, it argues, so any disparity might come from the employers' own choices rather than its algorithms.⁵ The court did not reject those arguments. It held they are questions for later, once the evidence is in, and noted that for now Workday's own website and discovery responses sit awkwardly against its claim that it makes no recommendations.⁵ Publicly, the company calls the case an early-stage ruling it expects to defeat: “once those facts are presented to the court, the plaintiff's claims will be dismissed.”⁸

The agent holding is also newer and less settled than a headline might suggest. It is one trial judge's decision on a question the appeals court above her has not answered, and she had to set aside an older ruling that individual agents are not liable under these statutes.¹ The age claim leans on a further contested reading, that job applicants and not only employees may bring age-discrimination impact claims at all, which two other appeals courts have rejected.⁷ Should the case reach the Ninth Circuit, or another court break from it, the theory could be narrowed or undone.

The screen most applicants now pass through

Whatever the courts make of the theory, the screen at the center of it is nearly everywhere. Workday told the court that during the period at issue, about 1.1 billion applications were rejected by employers using its software.⁵ Arguing the age collective was too big to manage, the company put the number of people who might belong to it in the “hundreds of millions.” The judge turned that around. If the group is that large, she wrote, it is because “Workday has been plausibly accused of discriminating against a broad swath of applicants,” and “allegedly widespread discrimination is not a basis for denying notice.”⁵

For every other screening vendor, the case settles less than it looks. The EEOC's 2023 guide to measuring adverse impact in hiring software, the one that lays out the four-fifths method, was taken down from the agency's website in January 2025 and now survives only in archives.² Title VII did not change when the page came down, and neither did the rulings in Mobley's case. But no appeals court has yet said whether the maker of a hiring algorithm can be sued as an employer's agent. One district judge has said it can, on the assumption that the allegations are true. Whether that holds, and whether Workday's screen discriminates, are both still open.