Workday AI bias case moves forward, putting HR hiring tools on notice

The judge also declined to dismiss a claim that Workday’s software flags job applicants using so-called proxy indicators of disability, including gaps in employment history, in violation of the federal Americans with Disabilities Act (ADA). She dismissed a separate claim related to discrimination against Asian American applicants on procedural grounds. Claims covering Black job seekers, women, and workers over 40 remain in play.

Workday denied wrongdoing. “Our technology looks only at job qualifications, not protected traits like race, age, or disability,” the company said in a statement. “We rigorously test our products as part of our Responsible AI program to confirm our tools do not harm protected groups.”

Why HR leaders should pay attention

The scale of this case is significant. Court filings show that approximately 1.1 billion applications were rejected using Workday’s software tools during the relevant period, meaning the collective could encompass hundreds of millions of affected applicants, according to reporting by Law and the Workplace.

“The concern is that speed and efficiency are being prioritized over accuracy and fairness, and that can have real consequences for qualified candidates,” said Jasmine Escalera, career expert at MyPerfectResume. The comment reflects a tension HR leaders are already navigating. According to a MyPerfectResume report covered by HRD America, 73% of employers are now using AI in hiring decisions, with half saying their tools automatically reject up to 50% of applications before any human review. Meanwhile, the Reuters report on Monday’s ruling noted that more than 80% of U.S. employers, and virtually all Fortune 500 companies, currently use some form of AI screening tool in their hiring process.

The legal risk does not sit with vendors alone. Employment lawyers and the Equal Employment Opportunity Commission (EEOC) have made clear that employers are responsible for vetting bias in AI tools used on their behalf, even when those tools are supplied by a third party. As one attorney told HRD America in an earlier report on AI hiring risks, “The EEOC has made very clear that the employer will be liable for mistakes made by third-party vendors. So it’s really important for employers to screen vendors, even if they advertise that they’re bias-free.”