Workday AI lawsuit receives the greenlight to proceed as a collective action
Workday Inc. (Workday) must face a nationwide collective action that could implicate “hundreds of millions of people” who were rejected for employment through Workday. This is the first class action to challenge the use of AI screening software and will be instructive for vendors and employers who rely on vendors, such as Workday, or use AI internally.
Here’s what you need to know about this critical ruling
By way of background, Workday is an “AI platform for HR and finance.” It is used by over 11,000 organizations around the world to “elevate their people, supercharge work and move their business forward forever.” Among the many services it provides, Workday offers AI tools that use advanced algorithmic methods to screen and ultimately accept or reject applicants for these organizations.
Derek Mobley (Black, over age 40) claims that since 2017 he has applied to more than 100 jobs with companies that use Workday’s screening features for talent acquisition and hiring. According to Mobley, he was rejected every single time. Mobley initially filed an individual lawsuit in the US District Court for the Northern District of California against Workday alleging race discrimination under Title VII and Section 1981, age discrimination under the ADEA and disability discrimination under the ADA.
In response, Workday filed a motion to dismiss asking the court to dismiss the lawsuit on the basis that Workday was not the employer and did not make the employment decisions. Judge Rita F. Lin denied Workday’s motion to dismiss and allowed the case to proceed holding that Workday could potentially be held liable as an “agent” of the employers who rejected Mobley’s application.
Mobley then sought to up the ante by moving for preliminary certification of a collective action on his age discrimination claim. Specifically, Mobley sought to certify a class of “[a]ll individuals aged 40 and over who, from September 24, 2020, through the present, [ ] applied for job opportunities using Workday, Inc.'s job application platform and were denied employment recommendations.” Mobley was joined by four other plaintiffs who likewise alleged that they too have applied for hundreds of jobs via Workday and have been rejected almost every time without an interview, allegedly because of their age.
On May 16, 2025, Judge Lin granted Mobley’s motion for preliminary certification and allowed the case to proceed as a nationwide class action. Judge Lin held that the critical issue at the heart of Mobley’s claim is whether that system has a disparate impact on applicants over forty. Judge Lin held that at this stage (where a low burden applies) the proposed class is similarly situated because Mobley has substantially alleged the existence of a unified policy—the use of Workday’s AI recommendation system to score, sort, rank or screen applicants.
Why does this ruling matter for employers?
Not only is this the first challenge to the use of AI in hiring decisions, but it is also a preview to how courts are likely to treat AI suits brought directly against employers. While Mobley filed his lawsuit against Workday rather than the companies who subscribed to Workday’s tools, employers are likely next in line. Accordingly, it is critically important that companies audit their vendors to ensure that they are complying with company guidelines and protocols and are regularly testing for potential bias and discrimination.
If other courts follow Judge Lin’s order and reasoning, courts may allow screening systems to be treated as a “unified policy” even if used by different companies nationwide for a wide variety of positions. This in effect dismantles common attacks to conditional certification such as differences in employers and positions.
Finally, this ruling has implications for collective actions outside the AI space. Workday raised several arguments with respect to the hurdles with Mobley’s proposed class—including that the class could reach millions of applicants and there would be significant difficulties in issuing class notice. In response, Judge Lin indicated that “[a]llegedly widespread discrimination is not a basis for denying notice” and if this was truly a hurdle, they could consider class notice via social media or Workday’s own platforms. By doing so, Judge Lin open the door to issuing class notice through these more widespread formats, which in turn, could lead to higher opt-in rates.
What’s next?
The parties have been ordered to meet and confer by May 28 to propose a plan for identifying and notifying class members. A case management conference is also scheduled for June 4, 2025. After additional discovery, Workday will have the opportunity to present evidence that the collective is not, in fact, similarly situated and ask the court to de-certify the class and require each plaintiff to proceed individually.