What would you have done? An HR vendor's AI screening tool is accused of filtering out over-40 applicants — and the vendor is held liable

A major HR vendor's AI pre-screening tool is accused of systematically rejecting candidates by age, across more than a billion rejected applications. The vendor casts itself as "just software." Three paths were open to the employer using it: carry on and trust the vendor, keep the tool but add bias audits and human review, or suspend algorithmic screening until it is checked.

The court let a collective action proceed and rejected the "just a software provider" defense: the vendor can answer for discrimination as an agent of the employer — who remains accountable too. The lesson holds across every sector: handing a decision to a third party's AI doesn't hand off the responsibility. Before letting AI make a decision that commits the business — hiring, credit, pricing — a small or mid-sized company is better off contractually requiring the vendor's proof of compliance, documenting a bias audit, and keeping a named human review of every automated decision.

Source: U.S. District Court, Northern District of California, "Mobley v. Workday, Inc.," collective action certification 16 May 2025 (further ruling 6 March 2026).