Workers are increasingly challenging the use of AI in hiring, especially when it operates behind the scenes without candidates’ knowledge. A new class action lawsuit in California claims that companies are using “hidden” AI tools to profile applicants unfairly. These tools gather sensitive data and make decisions that can impact someone’s job prospects without their awareness or consent.

Legal Challenges to AI Hiring Practices

The lawsuit specifically targets Eightfold AI, a major player in the AI hiring tech space. The plaintiffs argue that the company’s practices should be regulated the same way as credit reporting agencies, under laws like the Fair Credit Reporting Act (FCRA). They say that companies using Eightfold’s technology may be violating federal and state laws designed to protect consumers from unfair data collection and decision-making.

The case was filed in California’s Superior Court by the law firm Outten & Golden LLP, representing two job applicants who say they were denied employment because of AI-driven profiles. The lawsuit emphasizes that these practices can have serious consequences for job seekers across the country, potentially blocking opportunities without transparency or recourse.

How the AI Hiring Tools Work

Eightfold markets itself as a vast database of talent data, claiming to include over 1.5 billion data points globally. It gathers information from various sources such as job websites, social media profiles, and applicant databases like LinkedIn and Crunchbase. The company’s AI technology analyzes this data to produce a profile of each candidate, assessing their suitability for a role.

The AI system uses deep learning and large language models to process publicly available information and behind-the-scenes tracking tools. It then generates a ranking for each candidate on a scale from 0 to 5, based on assumptions about their potential fit, future career path, and other qualities. These rankings are meant to help hiring managers identify the best candidates quickly.

Concerns Over Privacy and Fairness

The lawsuit raises concerns that candidates are unaware of how their data is collected and used. The reports generated by the AI are described as “largely invisible” to applicants, who have no chance to review or dispute the information before it influences hiring decisions. Critics worry that this lack of transparency could unfairly harm applicants, especially those from marginalized backgrounds.

Furthermore, the process can screen out candidates before human eyes even see their applications. The plaintiffs argue that such practices violate fair credit laws, which are meant to ensure consumers are informed and have the ability to challenge inaccurate reports. The case could set a precedent for increased regulation of AI tools used in employment, demanding more transparency and accountability.

This legal action highlights a growing debate about how AI is changing hiring and whether current laws are enough to protect job seekers. As companies continue to adopt these technologies, regulators and courts may need to step in to ensure fairness and privacy are upheld.

Inspired by

• https://www.computerworld.com/article/4121074/workers-challenge-hidden-ai-hiring-tools-in-class-action-with-major-regulatory-stakes.html

Sources

• cio.com
• greyhoundresearch.com
• cio.com
• lawandtheworkplace.com
• hrpa.ca