TA Legal

The Landmark “Agent” Theory Ruling in Mobley v Workday

Yuri Kostun May 12, 2025 2 minutes read

The critical legal issue in the case was whether Workday, a technology vendor and not the direct employer, could be held liable for discrimination.

Initially, the lawsuit attempted to categorize Workday as an “employment agency,” which would subject it to direct liability under federal anti-discrimination laws.

In January 2024, the court initially dismissed the original complaint, ruling that Workday’s activities did not meet the statutory definition of “procuring” employees for employers, and thus it was not an “employment agency.”

Following an amended complaint, the court—supported by an amicus brief from the EEOC—allowed the case to proceed under a different theory of liability.

In July 2024, Judge Rita Lin issued a key ruling allowing the case to move forward on the theory that Workday could be held directly liable as an “agent” of the employer.

The court found that the complaint sufficiently alleged that Workday’s software was not just a simple data tool but was actively involved in the decision-making process, effectively acting on behalf of the hiring company. This ruling provides a significant new pathway for plaintiffs to hold AI vendors accountable under Title VII, the ADA, and the ADEA, even if the vendor does not meet the technical definition of an employer or employment agency.

The case has been actively proceeding as a collective action on the age discrimination claim.

In July 2025, the court ordered that the scope of the collective be expanded to include individuals processed using HiredScore AI features, despite Workday arguing that HiredScore was a separately acquired technology.

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.

Yuri Kostun

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