A California federal judge has again refused to toss most of the discrimination claims in Mobley v. Workday, a closely watched case that alleges the company’s AI-powered tools screened out job applicants in ways that could violate state and federal law, according to Bloomberg Law.
For HR leaders, the ruling keeps alive the possibility that vendors behind hiring technology can face direct liability for the outcomes their systems produce. Experts also suggest that HR leaders must take responsibility for auditing the systems.
The June 22 order from Judge Rita F. Lin largely upheld claims brought under California’s Fair Employment and Housing Act and the Americans with Disabilities Act (FEHA and ADA), while dismissing some allegations tied to specific race claims on procedural grounds, Bloomberg reported. The case is becoming a reference point for how courts may treat automated screening tools used across the hiring process.
The court’s closer look
HR Executive has already framed Mobley v. Workday as a landmark case for AI hiring risk, and this latest ruling highlights the confidence with which the court is letting the claims proceed.
HR teams have spent the past few years hearing broad claims about automation in hiring, but this case gives those concerns a concrete legal shape. The plaintiffs argue that Workday’s tools affected candidates by filtering applications through criteria that can correlate with race, age and disability, and the court’s latest order allows much of that theory to move ahead. Bloomberg noted that the judge kept the core claims in place even after Workday tried again to get the case dismissed.
The ruling suggests that a vendor’s role in the hiring process does not insulate it from discrimination claims. Additionally, it shows that courts may take a closer look at the inputs and outputs of screening systems, especially when those tools are used to handle high volumes of applicants.
For HR leaders, the lasting takeaway is to make sure hiring workflows are mapped, documented and reviewed with the same diligence as any other employment decision process. This is also a reminder to look at contract language with vendors, as courts continue to let these disputes proceed beyond the earliest stages.
Read more: As Eightfold, Workday suits show, AI legal risks are building for HR
What survived the motion
Bloomberg reported that the judge allowed the case to proceed on key FEHA and ADA theories, including a disability claim tied to so-called proxy indicators, such as employment gaps. That is an important detail for HR leaders because it points to familiar screening indicators that may carry legal risk.
The court also left open age-related claims tied to applicants over 40, continuing a lawsuit that has already become a test case for how employment law applies when software helps make candidate selections. Some race-based claims, including those involving Asian American applicants, were dismissed on procedural grounds, but the broader case remains.
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