The case of Mobley v. Workday, Inc. is a landmark lawsuit challenging the liability of Artificial Intelligence (AI) vendors for employment discrimination caused by their automated hiring tools.
It is one of the most closely watched cases defining how existing anti-discrimination laws, such as Title VII and the Age Discrimination in Employment Act (ADEA), apply to third-party technology providers.
The lawsuit, filed in the U.S. District Court for the Northern District of California, involves plaintiff Derek Mobley, an African-American man over the age of 40, who alleged that Workday’s AI-powered screening system systematically discriminated against him.
Plaintiff: Derek Mobley, who claimed to have applied for over 100 jobs at companies using the Workday platform since 2017 but was rejected for nearly all of them without receiving an interview.
Defendant: Workday, Inc., a major provider of human capital management (HCM) software, including applicant tracking systems (ATS) and AI tools that score, sort, rank, or screen job applicants.
The core allegation is that Workday’s AI algorithms, rather than simply implementing rote criteria, used data and methods that disproportionately screened out protected groups. Mobley’s applications were allegedly rejected rapidly, in some instances less than an hour after submission, pointing to an automated, discriminatory decision-making process.
The case highlights the necessity for both employers and vendors to conduct regular audits and validation of AI models to ensure they do not create a disparate impact on protected classes through the use of “proxy data” (such as zip codes, educational history, or prior employers) that can correlate with race, age, or other protected characteristics.
The ruling reinforces the stance of the EEOC that employers using algorithm-based hiring tools remain responsible for the outcomes and cannot use AI as a legal loophole for discrimination.
Bibliography
Epstein Becker Green. “Artificial Intelligence Bias: Harper v. Sirius XM Challenges Algorithmic Discrimination in Hiring.” Workforce Bulletin, October 17, 2025.
Faegre Drinker. “AI on Trial: Mobley v. Workday and the Future of Employment Law.” October 1, 2025.
Fisher Phillips. “Another Employer Faces AI Hiring Bias Lawsuit: 10 Actions You Can Take to Prevent AI Litigation.” August 15, 2025.
Norton Rose Fulbright. “Workday AI lawsuit receives the greenlight to proceed as a collective action.” Inside Tech Law, June 4, 2025.
Seyfarth Shaw. “Mobley v. Workday: Court Holds AI Service Providers Could Be Directly Liable for Employment Discrimination Under “Agent” Theory.” July 19, 2024.
Staffing Industry Analysts. “SiriusXM Radio faces class action on AI discrimination.” September 2, 2025. (Includes discussion of Mobley status).
CDF Labor Law LLP. “Federal Court Grants Preliminary Certification in Landmark AI Hiring Bias Case.” June 18, 2025.
About the Author
