Will AI give you the job? Automated hiring tools spark discrimination and secrecy lawsuits

A rise in lawsuits over AI use in employment decisions is raising questions about how companies hire and fire

F or the last four years, Erin Kistler has applied for thousands of jobs at companies like Paypal , Microsoft and Netflix , only to find her résumé disappear into a black hole. A product manager with nearly 20 years of experience, Kistler believes she was qualified for every role, yet she never received a single interview.

Now, Kistler is suing Eightfold AI, the Silicon Valley maker of hiring software used by hundreds of companies, including those where she applied, in a class action lawsuit . The case, filed in January in California court, is one of the first to argue that automated screening functions as an undisclosed consumer report or applicant dossier, ranking job applicants on their likelihood of success without giving them the chance to see or challenge the results, according to Kistler’s legal team.

The lawsuit is one of several new legal battles over companies’ use of AI in employment decisions. Workers are also suing Meta over an internal AI system that allegedly targeted them for layoffs because they took parental or medical leave . And a recent lawsuit against IBM alleges that AI tools discriminated against older workers.

Companies in the US are increasingly turning to AI to make faster and more efficient workplace decisions, often under the guise of objectivity. But experts who study this type of software say it can also introduce or exacerbate bias that could follow candidates across companies. Lawmakers are taking notice. The outcomes of the legal battles could shape future employment practices, transparency around them and the power candidates have in the process.

“There’s actually no law requiring a notice or disclosure of the use of these AI hiring systems,” said Ifeoma Ajunwa, a professor at Emory University School of Law and founding director of the AI and future of work program. “So companies are not necessarily telling workers when they’re being evaluated with AI.”

Last year, 90% of employers used some form of automation in the hiring process, according to a report from the World Economic Forum. These tools range from basic filtering – like excluding candidates who don’t have a four-year degree or another pre-requisite – to using AI to conduct assessments of a job applicant’s skills or even to perform the initial phone interview.

In the case of Eightfold, the company bills itself as “the world’s largest, self-refreshing source of talent data”. It constantly updates an internal database with information from the résumés, LinkedIn profiles, and social media profiles of over a billion workers who have applied for jobs through its platform. Using this data, it uses AI to score applicants on a scale of 0 to 5, predicting how well they would perform in a given job.