Results of the EEOC Lawsuit Concerning AI and Automated Hiring Tools

September 15, 2023

The U.S. Equal Employment Opportunity Commission (EEOC) recently settled its case against a prominent online tutoring company. According to the settlement, the company will pay $365,000. The allegations revealed how the employer discriminated against tutoring applicants based on age. 

The EEOC stated that the tutoring organization relied on an automatic screening tool in its hiring process. However, the tool filtered out all applications from women 55 and older or men 60 and older. This filter system violated the Age Discrimination in Employment Act (ADEA) and failed to respect the applicants’ civil rights. As a result, the settlement established a healthy payout to thousands of impacted employment-seekers. 

Reactions to Case

Many employment experts took this case as a signal that the EEOC will become a strict watchdog for AI and automated screening tools. This first case establishes that employers maintain responsibility when their employees and algorithms discriminate. The EEOC also warned employers to be mindful of the discrimination and disparate hiring impact their AI and automated tools can create if misused. 

Such misuse can result in the violation of federal law, regardless of intent. In this case, some legal experts claimed the facts should hold humans as accountable as the AI. The EEOC alleged that people programmed the software to exclude older applicants. 

The Case

As such, the company intended to discard the applications, using a disparate treatment theory. This allegation revealed that the employer intentionally enacted discriminatory hiring practices despite having a computer carry out the actions. Thus, the automated application filter did not ultimately cause ageism and civil rights violations; it simply followed protocol.

Employers must remain mindful of AI and automated employment screening tools’ role in hiring processes. Per the EEOC’s guidance, employers should prepare to examine, identify, and eliminate disparate impacts created by using such technology. They should audit their tools’ selections to ensure they are not choosing candidates from protected groups less frequently. 

EEOC’s Guidance

The EEOC also stressed that New York City employers should follow this guidance to comply with local regulations. In addition, the Commission reminded all employers what constitutes protected characteristics. This list includes but is not limited to age, race, gender, and disability status.

Federal laws concerning discrimination in employment apply to multinational businesses as well. However, this applies only when hiring and employing workers in the United States. The EEOC assured concerned parties that employers may continue using AI and automated employment tools. However, the Commission urged interested employers to audit frequently to avoid non-compliance.

Similarly, screening employees through background checks requires considerable attention to compliance. The best way to comply with federal, state, and local consumer reporting laws and regulations is to partner with an experienced employment screening provider.

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