Mobley v. Workday, Inc.

Mobley v. Workday, Inc. (No. 3:23-cv-00770, N.D. Cal., Judge Rita F. Lin) is a federal employment-discrimination action. It was the first AI-discrimination case in the United States to reach collective certification — a preliminary certification of an Age Discrimination in Employment Act (ADEA) collective in May 2025 — and it proceeds on the theory that an AI vendor, acting as the agent of deploying employers, can be held directly liable under federal antidiscrimination law for the disparate-impact effects of an automated hiring tool (Source: clearinghouse.net).

Parties

The plaintiff, Derek Mobley, is a Black man over 40 with self-disclosed anxiety and depression. He alleges he applied to more than 100 jobs through Workday's screening system and was rejected from all of them without human review. Additional plaintiffs joined in later amended complaints, and an opt-in collective of applicants aged 40 and over was certified on the ADEA claim.

The defendant, Workday, Inc., provides cloud-based HR software, including AI-driven applicant screening. See the dedicated company page at Workday, Inc..

Background and claims

The complaint alleges that Workday's screening AI disproportionately rejected Black applicants relative to similarly qualified non-Black applicants, disproportionately rejected applicants over 40, and disproportionately rejected applicants with disclosed disabilities including anxiety and depression. The claims are brought under Title VII, the ADA, and the ADEA (the original complaint also pleaded 42 U.S.C. § 1981, and a later amendment added a California FEHA aiding-and-abetting claim) (Source: clearinghouse.net). Statistical evidence is expected during discovery, where the underlying training data and feature engineering are to be discoverable for the first time at scale in an AI-employment case.

Vendor-liability theory

Antidiscrimination law has traditionally treated the deploying employer as the defendant for hiring decisions, with the vendor of a screening tool not directly liable. The plaintiff advanced two principal theories for holding Workday directly liable: that Workday operates as an "employment agency" (or indirect employer) under Title VII, and that Workday acts as the agent of the employer when its tool exercises hiring authority delegated by the employer.

The court's July 12, 2024 order sorted between them: it dismissed the claims to the extent they rested on the employment-agency theory (and dismissed the intentional-discrimination claims under Title VII, the ADEA, and § 1981), but allowed the disparate-impact claims to proceed on the agent theory, reasoning that an employer cannot escape liability for discrimination by delegating traditional functions like hiring to a third party (740 F. Supp. 3d 796) (Source: clearinghouse.net). The U.S. Equal Employment Opportunity Commission participated as amicus in support of the plaintiff at the motion-to-dismiss stage (Source: clearinghouse.net).

If sustained, the theory expands the population of potential defendants in AI-employment-discrimination cases: a vendor selling a screening tool to thousands of employers can be sued in a collective or class action covering rejected applicants across all of them, and the deploying employers remain exposed as the principals who delegated the hiring function (Source: foley.com).

Procedural history

Mobley filed suit on February 21, 2023. The court (Judge Lin, following reassignment) granted Workday's first motion to dismiss with leave to amend in January 2024; the plaintiff amended in February 2024. On July 12, 2024, the court granted in part and denied in part Workday's second motion to dismiss, allowing the disparate-impact claims to proceed on the agent theory as described above (Source: clearinghouse.net).

On May 16, 2025, the court granted preliminary collective certification of the ADEA claim under the opt-in mechanism of 29 U.S.C. § 216(b), finding the plaintiff plausibly showed that all proposed collective members were subject to a common, unified policy with an alleged disparate impact (2025 WL 1424347). The collective covers all individuals aged 40 and over who, from September 24, 2020 onward, applied for job opportunities through Workday's platform and were denied employment recommendations. In July 2025 the court held that the collective includes applicants whose applications were scored, ranked, or screened using the HiredScore AI features Workday acquired after the complaint was filed, rejecting Workday's argument that HiredScore was a separate product, and ordered Workday to identify customers using HiredScore AI so those applicants could be included (Source: clearinghouse.net; hrdive.com).

On February 17, 2026, Judge Lin authorized collective notice for U.S. applicants 40 and older who applied through Workday since September 24, 2020; court documents referenced roughly 1.1 billion rejected applications during the period, and Workday itself argued the collective could reach hundreds of millions of people — which the court held was not a basis for denying notice (Source: prnewswire.com). The opt-in window closed on March 7, 2026, defining the eligible collective for the ADEA track (Source: theslowai.substack.com, per Slow AI, republished May 4, 2026).

On March 6, 2026, the court rejected Workday's argument that the ADEA's disparate-impact protections do not cover job applicants. Workday had cited en banc rulings of the Seventh and Eleventh Circuits and argued that Loper Bright Enterprises v. Raimondo undercut precedent extending ADEA coverage to applicants; Judge Lin held that Loper Bright did not control and that the EEOC's longstanding interpretation that the ADEA covers applicants was persuasive under Skidmore. The same order dismissed, with leave to amend, the California FEHA claims (insufficient California nexus) and a physical-disability claim (insufficient allegations tying the tools to physical-disability discrimination) (Source: finance.yahoo.com; aigovernanceforhr.com). On March 30, 2026, the plaintiffs filed an amended complaint re-pleading the dismissed claims with added allegations on California nexus and on data points correlated with medical conditions (Source: hrdive.com).

As of July 2026 the case remains in pretrial discovery, with the sufficiency of the March 30 amended complaint pending and discovery expected to reach the logic of Workday's Candidate Skills Match and HiredScore features.

Broader context and commentary

California's FEHA regulations adopted in October 2025 extend vendor liability to AI tools "used to make or assist" employment decisions, codifying the Mobley theory at the state level. EEOC technical-assistance documents from 2022 and 2023 take the position that vendors are not exempt from antidiscrimination law. Commentators have described the vendor-liability theory as a template for discrimination cases against other employment-AI vendors, including HireVue, Pymetrics, and Modern Hire. A separate January 2026 class action against Eightfold AI advances a complementary theory that an AI hiring vendor operated as a consumer reporting agency subject to the Fair Credit Reporting Act (Source: aigovernanceforhr.com).

The case has been linked to the mathematical impossibility of perfect fairness result: because a vendor cannot satisfy all three fairness definitions simultaneously, vendor liability creates structural pressure to prioritize one definition, likely equal selection rates under the de facto four-fifths rule.

Relationships

• surfaced-in: Inside My AI Law & Policy Class 9: When AI Discrimination Happens 1.1 Billion Times (Farahany, September 2025) (intro course Class 9), Inside My Advanced Topics Class 6: What the AI Thinks It Knows About You (Farahany, February 2026), Inside My Advanced Topics Class 6.2: The Law's Toolkit (and Its Blind Spots) (Farahany, February 2026)
• related: Mathematical Impossibility of Perfect Fairness, NYC Local Law 144 (Automated Employment Decision Tools)
• defendant: Workday, Inc.