Mobley v Workday Inc

Mobley v. Workday, Inc. (Case No. 3:23-cv-00770-RFL, N.D. Cal.) is a federal class action lawsuit alleging that Workday's AI-powered hiring and applicant screening tools discriminate against job applicants based on race, age, and disability. The case is a landmark test of whether AI tool vendors can be held liable as employers or employment agencies under federal anti-discrimination law.<ref name="millershah">Miller Shah - AI Employment Discrimination Update</ref>

Parties

Plaintiff

Derek Mobley, an African American man over 40 with anxiety and depression, who applied to 80–100 positions using Workday's platform and was rejected at a 100% rate<ref name="maynardnexsen">MaynardNexsen - Emerging Liability for AI-Driven Hiring Tools</ref>

Defendant

Workday, Inc., provider of AI-driven applicant screening and hiring tools used by thousands of employer clients

Core Allegations

Mobley alleges that Workday's AI-based hiring tools automatically rejected his applications, often at suspicious times like 1:50 a.m. shortly after submission — suggesting automated screening without human review. He claims the system applies biased proxy data to infer protected characteristics:<ref name="margaretspence">Margaret Spence - Understanding Algorithmic Discrimination</ref>

Age bias: Graduation dates signal applicants over 40
Race bias: Attendance at Historically Black Colleges or names associated with racial/ethnic groups
Disability bias: Performance on neuroscience-based personality assessments reveal mental health conditions

Legal Claims

Mobley seeks to hold Workday liable under multiple federal statutes:

Title VII of the Civil Rights Act of 1964 (race and sex discrimination)
Section 1981
Age Discrimination in Employment Act (ADEA)
Americans with Disabilities Act Amendments Act (ADAAA)
California FEHA claims

The central legal question is whether AI tool developers/vendors can be held liable as "employment agencies" or agents when their technology causes discriminatory outcomes, even though Workday was not the direct employer of applicants who used its platform.<ref name="seyfarth">Seyfarth Shaw - Mobley v. Workday: AI Service Providers Could Be Directly Liable Under Agent Theory</ref>

The EEOC filed an amicus brief supporting Mobley's position, arguing that AI vendors who perform screening functions should be covered under anti-discrimination law.<ref name="millershah" />

Procedural History

First Motion to Dismiss (2023–2024)

Workday's first motion to dismiss was partially granted and partially denied.

Second Motion to Dismiss (July 2024)

On July 12, 2024, Judge Rita Lin denied Workday's second motion to dismiss in significant part:<ref name="seyfarth" /><ref name="maynardnexsen" />

Dismissed:

Claims that Workday acted as an "employment agency" — the court found this theory insufficient

Allowed to Proceed:

Disparate impact and disparate treatment claims under Title VII (race/sex), ADA (disability), ADEA (age), and FEHA
The court adopted an "agent" liability theory — holding that Workday could be directly liable as an agent of employer-clients when its AI performs screening functions
100% rejection rate combined with biased training data allegations sufficient to survive dismissal

Conditional Collective Action Certification (May 2025)

On May 16, 2025, the court granted conditional certification of the collective action under the ADEA, allowing age discrimination claims to proceed on a collective basis.<ref name="lawworkplace">Law and the Workplace - AI Bias Lawsuit Against Workday Reaches Next Stage</ref><ref name="maynardnexsen" />

Key findings:

Plaintiffs sufficiently alleged a "unified policy" in Workday's AI recommendation system
Workday's arguments about applicant variability did not defeat conditional certification
The court authorized notice to potential class members and opt-in discovery
This is conditional certification under the ADEA's collective action provision, not final Rule 23 class certification

Current Status

As of April 2026, the case remains in discovery following conditional certification. No further rulings on class certification, settlement, or trial date have been reported.<ref name="millershah" /><ref name="maynardnexsen" />

The proposed class covers applicants over 40 who were rejected through Workday's platform since September 24, 2020 — a potentially massive class given Workday has reportedly facilitated over 1.1 billion rejections.<ref name="margaretspence" />

Significance

Mobley v. Workday is a landmark case for AI vendor liability in employment. It could establish precedent on:

Whether AI tool providers are "agents" of employers under federal discrimination law
The sufficiency of statistical patterns (e.g., 100% rejection rates) to plead discrimination
The burden of proof required to challenge AI hiring systems' training data and proxy variables
The liability framework for companies providing AI screening tools to third-party employers
The scope of EEOC authority over AI decision-making tools

References