Why ‘Mobley v. Workday’ has far-reaching legal impacts for HR leaders

The Mobley v. Workday case has established that both AI hiring tool providers and their customers can be held liable under California's Fair Employment and Housing Act (FEHA). The ruling applies to the use of AI in employment decisions, including screening and ranking applicants. The case was brought by a plaintiff who alleged that Workday's AI tools discriminated against him on the basis of race and age.

This means that companies cannot avoid liability by outsourcing hiring decisions to third-party AI software. The decision underscores that employers are responsible for the outcomes of automated hiring processes, regardless of who built the tool.

For HR leaders, the ruling signals increased legal risk when using AI in hiring. Experts recommend auditing AI tools for bias, ensuring transparency in how algorithms make decisions, and maintaining human oversight.