Agency Law and the Workday Lawsuit
文章讨论了在Workday诉讼中，代理法的相关法律问题。原告声称，Workday的AI筛选工具因种族、年龄和残疾而对他进行了歧视。这起案件提出了HR技术供应商是否可以对歧视性结果直接负责的问题。法律的复杂性包括AI在招聘决策中的角色、代理责任以及对雇主和AI开发者的潜在影响。此案件提醒雇主在实施AI招聘工具时要谨慎，并确保避免法律风险。AI开发者也必须确保其产品无歧视行为，因为该诉讼可能会树立重要的法律先例。
Editor's Note
Agency Law and the Workday Lawsuit
Agency law is so old that it used to be called master and servant law. (That's different from slavery, where human beings were considered the legal property of other humans based on their race, gender, and age, which is partly why we have discrimination laws.)
Today, agency laws refer to principals and agents. All employees are agents of their employer, who is the principal. And employers can have nonemployee agents too when they hire someone to do things on their behalf. Generally, agents owe principals a fiduciary duty to act in the principal's best interest, even when that isn't the agent's best interest.
Agency laws gets tricky fast because you have to figure out who is in charge, what authority was granted, whether the person acting was inside or outside that authority, what duty applies, and who should be held responsible as a matter of fairness and public policy.
Generally, the principal is liable for the acts of the agent, sometimes even when the agent acts outside their authority. And agents acting within their authority are rarely liable for their actions unless it also involves intentional wrongs, like punching someone in the nose.
Enter discrimination, which is generally a creature of statute that may or may not be consistent with general agency law even when the words used are exactly the same.
Discrimination is generally an intentional wrong, but employees are not usually directly liable for discrimination because making employment decisions is part of the way employment works and the employer is always liable for those decisions.
The big exception is harassment because harassment, particularly sexual harassment, is never part of someone's job duties. So in harassment cases, the individual harasser is liable but the employer may not be unless they knew what was going on and didn't do anything about it.
It's confusing and makes your head hurt. And that's just federal discrimination law. Other employment laws, both state and federal, deal with agent liability differently.
Now, let's move to the Workday lawsuit. In that case, the plaintiff is claiming that Workday was an agent of the employer, but not in the sense of someone the employer was directing. They are claiming that Workday has independent liability as an employer too because they were acting like an employer in screening and rejecting applicants for the employer.
But that's kinda the whole point of HR Technology—to save the employer time and resources by doing some of the work. The software doesn't replace the employer's decision making and the employer is going to be liable for any discrimination regardless of whether and how the employer used their software.
If this were a products liability case, the answer would turn on how the product was designed to be used and how the employer used it. But this is an employment law and discrimination case. So, the legal question here is whether a company that makes HR Technology can also be directly liable for discriminatory outcomes when the employer uses that technology.
We don't have an answer to that yet and won't for a while. That's because this case is just at the pleading stage and hasn't been decided based on the evidence. What's happened so far is Workday filed a motion to dismiss based on the allegations in the complaint. Basically, Workday said, "Hey, we're just a software company. We don't make employment decisions; the employer does. It's the employer who is responsible for using our software in a way that doesn't discriminate. So, please let us out of the case. Then the plaintiff and EEOC said it's too soon to decide that. If all of the allegations in the lawsuit are considered true, then the plaintiff has made viable legal claims against Workday.
Those claims are that Workday's screening function acts like the employer in evaluating applications and rejecting or accepting them for the next level of review. This is similar to what third party recruiters and other employment agencies do and those folks are generally liable for those decisions under discrimination law. In addition, Workday could even be an agent of the employer if the employer has directly delegated that screening function to the software.
We're not to the question of whether a software company is really an agent of the employer or is even acting like an employment agency. And even if it is, whether it's the kind of agency that has direct liability or whether it's just the employer who ends up liable. This will all depend on statutory definitions and actual evidence about how the software is designed, how it works, and how the employer used it.
We also aren't at the point where we look at the contracts between the employer and Workday, how liability is allocated, whether there are indemnity clauses, and whether these type of contractual defenses even apply if Workday meets the statutory definition of an employer or agent who can be liable under Title VII.
Causation will also be a big issue because how the employer sets up the software, it's level of supervision of what happens with the software, and what's really going on in the screening process will all be extremely important.
The only thing that's been decided so far is that the plaintiff filed a viable claim against Workday and the lawsuit can proceed. Here are the details of the case and some good general advice for employers using HR Technology in any employment decision making process.
- Heather Bussing
AI Workplace Screener Faces Bias Lawsuit: 5 Lessons for Employers and 5 Lessons for AI Developers
by Anne Yarovoy Khan, John Polson, and Erica Wilson
at Fisher Phillips
A California federal court just allowed a frustrated job applicant to proceed with an employment discrimination lawsuit against an AI-based vendor after more than 100 employers that use the vendor’s screening tools rejected him. The judge’s July 12 decision allows the class action against Workday to continue based on employment decisions made by Workday’s customers on the theory that Workday served as an “agent” for all of the employers that rejected him and that its algorithmic screening tools were biased against his race, age, and disability status. The lawsuit can teach valuable lessons to employers and AI developers alike. What are five things that employers can learn from this case, and what are five things that AI developers need to know?
AI Job Screening Tool Leads to 100+ Rejections
Here is a quick rundown of the allegations contained in the complaint. It’s important to remember that this case is in the very earliest stages of litigation, and Workday has not yet even provided a direct response to the allegations – so take these points with a grain of salt and recognize that they may even be proven false.
Derek Mobley is a Black man over the age of 40 who self-identifies as having anxiety and depression. He has a degree in finance from Morehouse College and extensive experience in various financial, IT help-desk, and customer service positions.
Between 2017 and 2024, Mobley applied to more than 100 jobs with companies that use Workday’s AI-based hiring tools – and says he was rejected every single time. He would see a job posting on a third-party website (like LinkedIn), click on the job link, and be redirected to the Workday platform.
Thousands of companies use Workday’s AI-based applicant screening tools, which include personality and cognitive tests. They then interpret a candidate’s qualifications through advanced algorithmic methods and can automatically reject them or advance them along the hiring process.
Mobley alleges the AI systems reflect illegal biases and rely on biased training data. He notes the fact that his race could be identified because he graduated from a historically Black college, his age could be determined by his graduation year, and his mental disabilities could be revealed through the personality tests.
He filed a federal lawsuit against Workday alleging race discrimination under Title VII and Section 1981, age discrimination under the ADEA, and disability discrimination under the ADA.
But he didn’t file just any type of lawsuit. He filed a class action claim, seeking to represent all applicants like him who weren’t hired because of the alleged discriminatory screening process.
Workday asked the court to dismiss the claim on the basis that it was not the employer making the employment decision regarding Mobley, but after over a year of procedural wrangling, the judge gave the green light for Mobley to continue his lawsuit.
Judge Gives Green Light to Discrimination Claim Against AI Developer
Direct Participation in Hiring Process is Key – The judge’s July 12 order says that Workday could potentially be held liable as an “agent” of the employers who rejected Mobley. The employers allegedly delegated traditional hiring functions – including automatically rejecting certain applicants at the screening stage – to Workday’s AI-based algorithmic decision-making tools. That means that Workday’s AI product directly participated in the hiring process.
Middle-of-the-Night Email is Critical – One of the allegations Mobley raises to support his claim that Workday’s AI decision-making tool automatically rejected him was an application he submitted to a particular company at 12:55 a.m. He received a rejection email less than an hour later at 1:50 a.m., making it appear unlikely that human oversight was involved.
“Disparate Impact” Theory Can Be Advanced – Once the judge decided that Workday could be a proper defendant as an agent, she then allowed Mobley to proceed against Workday on a “disparate impact” theory. That means the company didn’t necessarily intend to screen out Mobley based on race, age, or disability, but that it could have set up selection criteria that had the effect of screening out applicants based on those protected criteria. In fact, in one instance, Mobley was rejected for a job at a company where he was currently working on a contract basis doing very similar work.
Not All Software Developers On the Hook – This decision doesn’t mean that all software vendors and AI developers could qualify as “agents” subject to a lawsuit. Take, for example, a vendor that develops a spreadsheet system that simply helps employers sort through applicants. That vendor shouldn’t be part of any later discrimination lawsuit, the court said, even if the employer later uses that system to purposefully sort the candidates by age and rejects all those over 40 years old.
5 Tips for Employers
This lawsuit could have just easily been filed against any of the 100+ employers that rejected Mobley, and they still may be added as parties or sued in separate actions. That is a stark reminder that employers need to tread carefully when implementing AI hiring solutions through third parties. A few tips:
Vet Your Vendors – Ensure your AI vendors follow ethical guidelines and have measures in place to prevent bias before you deploy the tool. This includes understanding the data they use to train their models and the algorithms they employ. Regular audits and evaluations of the AI systems can help identify and mitigate potential biases – but it all starts with asking the right questions at the outset of the relationship and along the way.
Work with Counsel on Indemnification Language – It’s not uncommon for contracts between business partners to include language shifting the cost of litigation and resulting damages from employer to vendor. But make sure you work with counsel when developing such language in these instances. Public policy doesn’t often allow you to transfer the cost of discriminatory behavior to someone else. You may want to place limits on any such indemnity as well, like certain dollar amounts or several months of accrued damages. And you’ll want to make sure that your agreements contain specific guidance on what type of vendor behavior falls under whatever agreement you reach.
Consider Legal Options – Should you be targeted in a discrimination action, consider whether you can take action beyond indemnification when it comes to your AI vendors. Breach of contract claims, deceptive business practice lawsuits, or other formal legal actions to draw the third party into the litigation could work to shield you from shouldering the full responsibility.
Implement Ongoing Monitoring – Regularly monitor the outcomes of your AI hiring tools. This includes tracking the demographic data of applicants and hires to identify any patterns that may suggest bias or have a potential disparate impact. This proactive approach can help you catch and address issues before they become legal problems.
Add the Human Touch – Consider where you will insert human decision-making at critical spots along your hiring process to prevent AI bias, or the appearance of bias. While an automated process that simply screens check-the-box requirements such as necessary licenses, years of experience, educational degrees, and similar objective criteria is low risk, completely replacing human judgment when it comes to making subjective decisions stands at the peak of riskiness when it comes to the use of AI. And make sure you train your HR staff and managers on the proper use of AI when it comes to making hiring or employment-related decisions.
5 Tips for Vendors
While not a complete surprise given all the talk from regulators and others in government regarding concerns with bias in automated decision making tools, this lawsuit should grab the attention of any developer of AI-based hiring tools. When taken in conjunction with the recent ACLU action against Aon Consulting for its use of AI screening platforms, it seems the time for government expressing concerns has been replaced with action. While plaintiffs’ attorneys and government enforcement officials have typically focused on employers when it comes to alleged algorithmic bias, it was only a matter of time before they turned their attention to the developers of these products. Here are some practical steps AI vendors can take now to deal with the threat.
Commit to Trustworthy AI – Make sure the design and delivery of your AI solutions are both responsible and transparent. This includes reviewing marketing and product materials.
Review Your Work – Engage in a risk-based review process throughout your product’s lifecycle. This will help mitigate any unintended consequences.
Team With Your Lawyers – Work hand-in-hand with counsel to help ensure compliance with best practices and all relevant workplace laws – and not just law prohibiting intentional discrimination, but also those barring the unintentional “disparate impact” claims as we see in the Workday lawsuit.
Develop Bias Detection Mechanisms – Implement robust testing and validation processes to detect and eliminate bias in your AI systems. This includes using diverse training data and regularly updating your algorithms to address any identified biases.
Lean Into Outside Assistance – Meanwhile, collaborate with external auditors or third-party reviewers to ensure impartiality in your bias detection efforts.
原文来自：https://www.salary.com/newsletters/law-review/agency-law-and-the-workday-lawsuit/
温馨提示：加州雇主必须在 2024 年 2 月 14 日之前通知员工竞业禁止无效
作为NACSHR专业社群，让您的全球受众了解就业法律的重大变化非常重要，尤其是在美国这样的主要经济体。加利福尼亚州关于非竞争协议的最新进展就是一个很好的例子。以下是可能与您的读者相关的摘要和要点：
法律的主要变化：自 2024 年 1 月 1 日起，加州几乎所有形式的员工竞业禁止协议和条款都将失效。这是就业法的重大转变，反映出美国限制非竞争协议可执行性的趋势日益明显。
雇主义务：从 2024 年 1 月 1 日起，加州雇主有 44 天的时间通知所有现任和前任员工（在过去两年内受雇并签订过竞业禁止协议的员工）这一变化。通知必须告知员工，之前的任何竞业禁止协议现已失效。
通知方式：雇主必须通过邮件和电子邮件发送此通知，确保所有受影响的员工都能充分知晓。
违规处罚：未遵守通知要求的雇主可能会面临每次最高 2,500 美元的处罚。这强调了遵守新法规的重要性。
执法：虽然这项新法规的执行主要由加州总检察长和其他政府检察官负责，但从加州起诉违反非竞争协议行为的历史来看，雇主最好采取积极主动的态度。
全球影响：对于全球人力资源专业人士而言，了解这些变化至关重要，尤其是对于在加州开展业务的跨国公司而言。这一发展可能会影响雇佣合同谈判和人力资源实践。
这些信息对您的读者至关重要，可帮助他们深入了解重要司法管辖区不断演变的就业法律，并强调随时更新国际人力资源法律要求的重要性。
WHAT’S THE IMPACT?
Employers must send notices to the last known mailing and email address of every current and former employee who worked under a non-compete after January 1, 2022.
The notice must state that any noncompete to which the employee was bound is now void.
Failure to comply with the Valentine’s Day deadline will trigger Unfair Competition Law penalties up to $2500 per violation.
As an HR professional and editor, it's important to keep your global audience informed about significant changes in employment laws, especially in major economies like the United States. The recent development in California regarding non-compete agreements is a prime example. Here's a summary and key points that might be relevant for your readers:
Key Change in Law: As of January 1, 2024, California has invalidated nearly all forms of employee non-compete agreements and clauses. This is a significant shift in employment law, reflecting a growing trend in the U.S. towards limiting the enforceability of non-competes.
Employer Obligations: California employers now have a 44-day window, starting from January 1, 2024, to notify all current and former employees (who were employed in the last two years and had a non-compete agreement) about this change. The notification must inform employees that any previous non-compete agreements are now void.
Method of Notification: Employers are required to send this notification via mail and email, ensuring that all affected employees are adequately informed.
Penalties for Non-Compliance: Employers who fail to comply with this notification requirement could face penalties of up to $2,500 for each violation. This underscores the importance of adhering to the new regulation.
Enforcement: While enforcement of this new regulation is primarily the responsibility of the California Attorney General and other government attorneys, the state's history in prosecuting non-compete violations suggests a proactive approach from employers is advisable.
Global Implications: For HR professionals worldwide, understanding these changes is crucial, especially for multinational corporations with operations in California. This development could influence employment contract negotiations and HR practices.
This information could be vital for your readers, offering them insights into evolving employment laws in a key jurisdiction and highlighting the importance of staying updated with international HR legal requirements.
Employment Law
2024年01月22日
Employment Law
【下载】2024年加利福尼亚州就业法律指南 Get Your Free 2024 California Employment Law Guide
2024年加利福尼亚州就业法律指南 广泛概述了 2024 年加利福尼亚州的新就业法律。
它涵盖了就业法的各个方面，如一般就业法、大麻使用权、非竞争协议、与生育相关的丧假、工作场所安全以及特定行业的法律。每个部分都概述了新法律、其生效日期以及建议雇主为遵守这些法规而采取的下一步措施。
该指南是了解不断变化的加利福尼亚州就业法律环境的全面资源，有助于确保遵守新的法规和条例。 欢迎点击下载，来自CEA
Get Your Free 2024 California Employment Law Guide
While the end of the year is full of excitement with the holidays, this time of year also marks the buzz of Labor Law Update Season, as California employers prepare to comply with dozens of new employment laws. Access California Employers Association’s free 2024 New Laws Guide here, including key highlights for each bill and a to-do list for employers on practical next steps!
Major changes this year include:
Increased mandatory paid sick leave
Brand new reproductive loss bereavement leave
Comprehensive workplace violence prevention plan requirements
Cannabis-use protections
Wage and hour updates
Just to name just a few! click here https://www.nacshr.org/Resources/63027AD3-6469-1065-2077-A1551263B72F.html
CEA is here to provide customized support to employers of all sizes with their California compliance needs.
source：CEA
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