Mobley v. Workday and NJ Job Seekers: Can You Sue the AI Hiring Software Itself for Discrimination?

As employers rely more heavily on algorithmic hiring tools, concerns about discrimination in the hiring process have grown. Federal and state employment laws continue to place responsibility for these decisions on employers, even when automated systems influence them. 

The Mobley v. Workday involves allegations that algorithmic screening tools contributed to discriminatory hiring decisions, placing the conduct of the AI platform itself under scrutiny. 

The growing use of artificial intelligence in hiring has created new challenges under employment discrimination law. Our attorneys at Brandon J. Broderick closely follow these developments because automated screening tools now influence hiring decisions affecting many New Jersey workers and job seekers. 

Although discrimination claims have traditionally focused on employers and hiring managers, the Workday litigation includes the companies that design and operate these systems. The decision could have consequences for both technology providers and the employers that use their platforms. 

This article explains why the case has attracted national attention, how courts are approaching claims involving AI hiring software, and when to reach out to an employment lawyer in New Jersey.

What New Jersey Applicants Should Know About Mobley v. Workday

Derek Mobley, a Black man over 40 who has anxiety and depression, applied to more than 100 jobs at companies using Workday's screening tools starting in 2017. He was rejected every time he applied. In many instances, the rejection arrived within hours, which he cited as evidence that his application had been screened automatically rather than reviewed by a person. 

Mobley sued the software vendor, arguing the tool itself screened him out. Workday's defense was that it provides software, not employment decisions, and is not an employer of anyone who applies through its platform. The lawsuit alleges that Workday's applicant-recommendation technology disproportionately screened out applicants based on race, age, and disability. 

The litigation has continued to advance through several stages:

• In July 2024, the court denied Workday's motion to dismiss, allowing the disparate-impact claims to move forward under an agency theory.
• On May 16, 2025, the court granted preliminary certification of a nationwide collective under the Age Discrimination in Employment Act. The group includes applicants aged 40 and older who applied for jobs through Workday and were denied employment on or after Sept. 24, 2020.
• In July 2025, the court expanded the collective to include applicants screened through HiredScore, an AI recruiting product acquired by Workday.
• On March 6, 2026, the court rejected Workday's argument that the ADEA protects only current employees and does not extend to job applicants.

The numbers are large. Workday reports that its platform is used by more than 65% of Fortune 500 companies and by over 70% of the top 50 companies on the list. 

In its own filings, the company states that roughly 1.1 billion applications were rejected through its tools during the relevant period. The collective could reach hundreds of millions of people. Judge Rita Lin addressed the scale directly, writing that allegedly widespread discrimination is not a basis for denying notice to the people affected.

The rulings so far decide that the case proceeds, not that Workday discriminated. Nothing has been decided on the merits. The court has held that the claim can move forward and reach a jury, which is different from a finding that the algorithm broke the law. The reason a software company can be sued at all comes down to the agency theory.

When AI Hiring Vendors Face Liability for Screening Decisions in NJ

Title VII, the ADEA, and the Americans with Disabilities Act prohibit bias by employers. A software company is not the employer in the traditional sense. That distinction has made the definition of "employer" a central issue in the case. 

Each of those statutes defines an employer to include the employer's agents. The court in Mobley concluded that a vendor's role does not end with providing software. When a tool participates in screening or rejecting applicants, the vendor may be treated as the employer's agent for purposes of the discrimination claims. Workday argued its software only carries out the criteria employers set. 

The court was not persuaded that the system functioned as a purely passive tool. The allegations described technology that helped determine which applicants moved forward and which did not. In cases like these, our attorneys often see the focus shift to the degree of control the system holds. A tool that participates in decision-making is viewed differently from one that only relays an employer's choices. 

The surviving claims rest on disparate impact, which removes the need to prove intent. 

An applicant does not have to show that anyone meant to discriminate. A neutral practice that statistically harms a protected group is enough, a principle the U.S. Supreme Court established in Griggs v. Duke Power Co. (1971). An AI system trained on past hiring data reproduces the biases embedded in that data without anyone choosing the outcome.

Several features make a vendor a potential agent under this theory:

• The tool screens, scores, ranks, or filters applicants.
• It recommends some candidates and rejects others.
• It performs a function the employer handed off to it.
• Its output influences or determines who advances.
• It applies one uniform system across many different employers.

The federal government took a position early in the case. The Equal Employment Opportunity Commission filed a brief in April 2024 supporting Mobley. It states that algorithmic tools violate anti-discrimination law even without intent and that the vendors who build them can be held accountable alongside employers. 

The EEOC's first settlement involving alleged AI hiring discrimination came in 2023. The agency alleged that iTutorGroup's hiring software automatically rejected female applicants who were 55 or older and male applicants who were 60 or older. The case ended with a $365,000 settlement. 

What AI and Third-Party Screening Lawsuits Mean for NJ Job Seekers

The Mobley collective is nationwide: New Jersey applicants are already part of it. A New Jersey job seeker 40 or older who applied through Workday and was rejected since Sept. 24, 2020, is a potential member and could receive an opt-in notice. 

Opting in means joining the collective and having the claim heard alongside the others. Staying out preserves the right to bring a separate case later.

The stronger route for most New Jersey applicants runs through state law. A worker harmed by a biased AI screening can pursue it in New Jersey rather than waiting on a collective. The New Jersey Law Against Discrimination (NJLAD) reaches further than its federal counterparts and gives a local applicant an independent claim. 

The NJLAD provides several advantages in cases involving algorithmic bias. It protects more categories of workers and applicants than many federal laws and recognizes disparate-impact claims. It also allows lawsuits to be filed directly in court within two years.

The statute also includes an aiding-and-abetting provision. It may support claims against a company whose technology helps carry out the screening process that produced a biased result.

The disability aspect of AI screening warrants separate consideration. Some automated hiring tools place significant emphasis on employment history, recorded interview performance, or personality-based assessments, all of which may disadvantage certain applicants. In 2025, only 22.8% of people with disabilities were employed, making fair access an important issue under both federal and state law. 

Possible exemptions are limited. From the applicant's perspective, the screening process is often invisible, and there is usually no way to know what role an AI tool or social media screening system played in the decision. Litigation can change that by requiring the disclosure of records showing how applicants were evaluated, ranked, or screened out.  

Applicants rarely have access to the information needed to evaluate an AI discrimination claim at the time they receive a rejection. Our team at Brandon J. Broderick often sees key evidence emerge during discovery. Internal communication provides a much clearer picture of what occurred and if a discriminatory pattern exists. The law in this area continues to develop in real time. 

The Limits of Current Law on Discriminatory Hiring Algorithms

The case is still far from a final resolution. The rulings in Mobley address whether the case may proceed, not if discrimination actually occurred. 

In April 2025, Executive Order 14281 directed federal agencies to scale back enforcement built on disparate impact theories. The regulatory landscape has changed. The agency has withdrawn its 2023 AI guidance and recently rescinded workplace harassment guidance, signaling a broader shift in enforcement priorities. Federal scrutiny of the specific theory at issue in Mobley has eased as a result. 

Private lawsuits remain available under existing anti-discrimination laws. Many of those cases now focus on alleged bias in remote hiring systems and virtual recruiting processes. 

Even if a software vendor becomes part of the lawsuit, the employer remains a central figure in the case. The New Jersey employer that used the screening technology may still be held responsible under existing anti-discrimination laws.

This provides applicants with a clearer route to pursuing a claim. As courts continue to address the role of AI in hiring decisions, the law remains a developing area with important questions still being resolved.

The Significance of Mobley Moving Forward

The legal path for claims against AI hiring software is becoming clearer, but many questions remain unresolved. For New Jersey applicants, the strongest claims will often focus on the employer that used the technology and, depending on the circumstances, the company that provided it. 

If you believe an automated hiring system unfairly screened you out because of your age, race, disability, sex, or another protected characteristic, contact us today for a free consultation.