(Derek Mobley, et al. v. Workday, Inc., No. 23-770, N.D. Calif.)
(Workday’s opposition to EEOC brief available. Document #46-240501-031B. EEOC’s motion for leave to file amicus brief and brief available. Document #46-240501-016B. Mobley’s response available. Document #46-240501-017B.)
In its April 23 opposition, Workday says “a plain reading of the EEOC’s brief confirms it is not designed to help this Court understand the relevant law. Instead, it advocates for Plaintiff. It does not offer any unique information or perspective from the EEOC. Indeed, the EEOC has issued guidance that is publicly available on its website (which the parties have cited) touching on the very issues about which it argues in Plaintiff’s favor in this case.” The opposition was filed in response to the April 9 EEOC brief. Plaintiff Derek Mobley filed his response in opposition to the motion to dismiss on April 2.
Mobley filed a charge of discrimination with the EEOC in June 2021. The EEOC issued a dismissal in November 2022. Mobley then filed a class action against Workday, claiming that starting in 2018, he applied to between 80 to 100 positions at various companies that use Workday’s algorithmic screening tool. Mobley is an African American who suffers from anxiety and depression. He has a degree in finance from Morehouse College and an associate’s degree in network systems administration. He says he was denied each position. Mobley claims that Workday engages in a pattern of rejecting African-American applicants older than 40 and those with disabilities.
AI Screening
“Defendant Workday, Inc.’s artificial intelligence (AI) systems and screening tools rely on algorithms and inputs created by humans who often have built-in motivations, conscious and unconscious, to discriminate. Defendant Workday, Inc. unlawfully offers an algorithm-based applicant screening system that determines whether an employer should accept or reject an application for employment based on the individual’s race, age, and or disability,” Mobley alleges.
Mobley asserts claims for discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq., and the ADA Amendments Act of 2008 (ADA), 42 U.S.C. § 12101 et seq., intentional discrimination on the basis of race and age and disparate impact discrimination on the basis of race, age and disability.
Workday moved to dismiss the complaint, arguing that Mobley had not exhausted his administrative remedies as to the Title VII and ADEA claims and that he had not alleged facts sufficient to state a claim.
U.S. Judge Rita F. Lin of the Northern District of California issued an opinion on Jan. 19 denying the motion as to the exhaustion argument but granting it to the extent that Workday alleged a failure to state a claim. Mobley filed an amended complaint on Feb. 20, alleging intentional employment discrimination and disparate impact discrimination in violation of Title VII, intentional age discrimination and disparate age discrimination in violation of the ADEA, intentional discrimination under Section 1981 and aiding and abetting race, disability and age discrimination under the Fair Housing Employment and Housing Act (FEHA), California Government Code Section 12940(I), Cal. Gov. Code § 12940(I).
‘Artful Vagary’
Workday moved to dismiss the amended complaint on March 12, saying: “In response to the Court’s order, Plaintiff’s First Amended Complaint (‘FAC’) purports to offer additional bases for holding Workday liable. Rather than advance new theories backed by plausible facts, however, Plaintiff instead merely disguises the old theory in artful vagary.”
In his response in opposition, Mobley argues that Workday failed to show that his allegations cannot support even the inference of liability under Title VII, the ADA or the ADEA.
Employers delegate hiring decisions to Workday, Mobley says. “Workday’s algorithmic decision-making tools also build homogenous workforces because they are only trained to replicate the incumbent workforce which, as is seen in tech jobs, is often not representative of the available talent pool,” Mobley alleges.
The company’s sourcing of candidates is “textbook” procurement of employees, Mobley says. Mobley says Workday’s arguments and court precedents he cites ignore that its conduct goes well beyond perfunctorily screening candidates. Workday’s AI sources candidates and makes employment decisions and specifically advertises its AI decision-making as a reason to hire the company, Mobley says.
And while Workday argues that software vendors are entitled to immunity under EEOC rules, a closer look at the regulations shows that vendors can be liable when they are handed authority to act, Mobley says.
Mobley argues that Workday qualifies as an indirect employer and that his discrimination claims survive. Not every detail of the Workday AI is known. “What is known, and what Workday seems to ignore, is that there are serious concerns as to whether AI or [machine learning] tools can ever be made bias free. Bloomberg, the [European Union], the federal government, and numerous academics are not optimistic that they can,” Mobley says.
Employment Agency Status
In its motion for leave to file an amicus brief in support of Mobley, the EEOC says he adequately alleges that Workday is an employment agency under the lenient pleading standard that allows a complaint to proceed, even where a judge finds the facts improbable or that recovery is remote or even unlikely.
Title VII, the ADA and the ADEA all prohibit discrimination by employment agencies, the EEOC says. All three statutes define an employment agency as a person who procures employees for an employer. Screening and referral activities like evaluating candidates’ skills and performance, making judgments about resumes and referring potential hires are all activities that can be and are performed by employment agencies, the EEOC says.
“Accepting the FAC’s allegations as true, as required at the pleading stage, Mobley has plausibly alleged that Workday’s algorithmic tools perform precisely the same screening and referral functions as traditional employment agencies — albeit by more sophisticated means,” the EEOC tells the court. “In short, because Mobley has plausibly alleged that Workday actively is engaged to a significant degree in the services of traditional employment agencies, he has sufficiently pleaded that Workday is an employment agency.”
The EEOC says Workday’s contention that screening potential employees differs from procuring employees fails to address case law to the contrary and is not persuasive. Some employment agencies may source workers or seek out applicants, but nothing requires that they do so to be considered an employment agency. “While other common employment-agency functions like recruitment may also meet the statutory definition as there is no archetypal employment agency . . . recruitment is neither the sole nor a requisite employee-procuring activity and is not essential to statutory coverage,” the EEOC says.
Software
Any “intuitive appeal” to Workday’s argument that it merely provides software “collapses under scrutiny.” Workday points out that Microsoft Corp. is not a tax preparer, even if its spreadsheet program is used to calculate taxes. “Mobley alleges that, unlike Microsoft in that hypothetical, Workday’s screening system itself actively makes automated decisions to reject or advance job candidates. . . . Excel does not make comparable decisions, actively or otherwise, about one’s taxes,” the EEOC says. And notably, Mobley alleges that Workday’s AI discriminates independent of the job criteria set by the prospective employer, the EEOC says.
Workday provides no support for the “novel proposition that an entity can be too big to qualify as an employment agency.” That an adverse ruling in the case could impact thousands of employers has no bearing on whether Workday is an employment agency. If the allegations sufficiently allege that Workday is an employment agency, then it qualifies as one. “That remains true whether Workday performs those tasks for one employer or thousands of employers. More to the point, if Workday’s algorithmic tools in fact make hiring decisions (and on the scale Mobley suggests), it would be all the more important to ensure that Workday complies with federal anti-discrimination law,” the EEOC says.
The amended complaint also adequately pleads that Workday is an indirect employer based on its status as a gatekeeper with control over the application process, the EEOC says. Workday’s argument that its customers control who gets hired and are free to stop using its AI tools at any time misses the point. The relevant inquiry isn’t whether the defendant controls the employer but whether the defendant can interfere with access to the employer, the EEOC argues.
Under the cited statutes, the term employer includes any agent of an employer, and an agent can be held independently liable, as Workday itself acknowledges, the EEOC argues.
In response to the amicus brief, Workday says: “Indeed, the EEOC’s proposed amicus brief literally urges this Court to deny Workday’s motion—a request normally reserved for the party whose claims are at issue. Particularly where the parties are both represented by competent counsel capable of briefing and litigating the relevant issues before this Court, allowing the EEOC to participate in this litigation improperly prejudices Workday and does little to assist the Court.”
The proposed brief is unduly partisan and does not so much offer neutral statutory interpretation as advocate for the plaintiff, repeats arguments already before the court and was improperly filed mere days before the deadline for the reply brief, Workday complains.
Courts routinely deny motions to participate as amici where the parties are adequately represented, as they are in this case, Workday tells the court.
Counsel
Mobley is represented by Lee D. Winston and Roderick T. Cooks of Winston Cooks LLC in Birmingham, Ala.
Workday is represented by Julie A. Totten, Erin M. Connell, Kayla D. Grundy and Alexandria R. Elliott of Orrick, Herrington & Sutcliffe LLP in San Francisco and Justin M. Washington of the firm’s Los Angeles office.
EEOC is represented by General Counsel Karla Gilbride, Associate General Counsel Jennifer S. Goldstein and Assistant General Counsel Dara S. Smith and Steven Winkelman of the EEOC in Washington, D.C.
(Additional documents available: Workday’s motion to dismiss. Document #46-240403-005B. Mobley’s amended complaint. Document #46-240403-006C.)