The AI reckoning: What the Workday lawsuit means for your hiring strategy

Unless you’ve been living under a rock, you’ve probably heard about the Workday lawsuit that’s sending shockwaves through the talent acquisition world. Derek Mobley’s case against Workday — now a certified class action — alleges that AI-powered hiring tools discriminated against applicants over 40, leading to systematic rejection of qualified candidates.

Here’s what happened: Mobley applied to over 100 jobs through companies using Workday’s AI screening tools over seven years. He was rejected every single time, often within minutes or hours. The court found his allegations plausible enough to let the case proceed as a nationwide collective action, potentially affecting millions of job seekers.

The “set it and forget it” problem

Too many companies have treated AI hiring tools as set it and forget it. They’ve implemented these systems without proper oversight, testing, or understanding of potential bias. The Workday case serves as a wake-up call, highlighting the need for active management and continuous monitoring of AI tools.

I’ve seen organizations proudly announce their AI implementation while having zero processes for auditing results or ensuring fairness. That’s not innovation, that’s negligence.

The employer danger just got real

Here’s what makes this case particularly concerning: In August 2025, the court ordered Workday to provide an exhaustive list of every employer that enabled their HiredScore AI features. This means any company that used this specific AI tool could now be swept into this massive collective action lawsuit.

Think about that for a moment. Organizations that thought they were just buying software to streamline hiring may now find themselves defendants in a discrimination lawsuit affecting potentially millions of candidates.

What this means for your organization

First, if you’re using AI in hiring (and most of you are, whether you realize it or not), you need to audit your tools immediately. Can you explain how decisions are made? Have you tested for disparate impact? Do you have human oversight at critical decision points?

Second, this case highlights the need for AI literacy at the leadership level. Your HR team needs to understand not just how to use these tools, but how to evaluate and govern them. Too many organizations are making million-dollar AI investments with leaders who can’t explain how the technology actually works.

The broader implications

This lawsuit signals the end of unregulated AI in hiring. Organizations that get ahead of this trend by implementing responsible AI governance will have a significant competitive advantage. Those that don’t may find themselves in court.

But here’s the deeper issue: this case reveals how desperately we need comprehensive workforce transformation. The organizations that will thrive are those that move beyond just fixing their AI tools to reimagining their entire approach to talent — from skills-based hiring to career development to internal mobility.

The message is clear: AI can enhance hiring, but human accountability and strategic workforce planning are non-negotiable.