Duane Morris Takeaways: In Mobley v.
Case Background
Plaintiff, an
On
Workday moved to dismiss the complaint, arguing that Plaintiff failed to exhaust administrative remedies with the EEOC as to his intentional discrimination claims; and that Plaintiff did not allege facts to state a plausible claim that Workday was liable as an "employment agency" under the anti-discrimination statutes at issue.
The Court's Decision
The Court granted Workday's motion to dismiss. First, the Court noted the parties did not dispute that Plaintiff's EEOC charge sufficiently exhausted the disparate impact claims. However, Workday moved to dismiss Plaintiff's claims for intentional discrimination under Title VII and the ADEA on the basis of his failure to exhaust administrative remedies. Workday argued that the EEOC charge alleged only claims for disparate impact, not intentional discrimination.
Rejecting Workday's argument, the Court held that it must construe the language of the EEOC charge with "utmost liberality since they are made by those unschooled in the technicalities of formal pleading." Id. at 5 (internal quotation marks and citations omitted). The Court acknowledged that the thrust of Plaintiff's factual allegations in the EEOC charge concerned how Workday's screening tools discriminated against Plaintiff based on his race and age. However, the Court held that those claims were reasonably related to his intentional discrimination claims, and that the EEOC investigation into whether the tools had a disparate impact or were intentionally biased would be intertwined. Accordingly, the Court denied Workday's motion to dismiss on the basis of failure to exhaust administrative remedies.
Next, the Court addressed Workday argument that Mobley did not allege facts to state a plausible claim that it was liable as an "employment agency" under the anti-discrimination statutes at issue. The Court opined that Plaintiff did not allege facts sufficient to state a claim that Workday was "procuring" employees for these companies, as required for Workday to qualify as an "employment agency." Id. at 1. For example, Plaintiff did not allege details about his application process other than that he applied to jobs with companies using Workday, and did not land any job offers. The complaint also did not allege that Workday helped recruit and select applicants.
In an attempt to salvage these defects at the motion hearing and in his opposition brief, Plaintiff identified two other potential legal bases for Workday's liability — as an "indirect employer" and as an "agent." Id. To give Plaintiff an opportunity to attempt to correct these deficiencies, the Court granted Workday's motion to dismiss on this basis, but with leave for Plaintiff to amend. Accordingly, the Court granted in part and denied in part Workday's motion to dismiss.
Implications For Businesses
Artificial intelligence and algorithm-based applicant screening tools are game-changers for companies in terms of streamlining their recruiting and hiring processes. As this lawsuit highlights, these technologies also invite risk in the employment discrimination context.
For technology vendors, this ruling illustrates that novel arguments about the formation of the "employment" relationship could potentially be fruitful at the pleading stage. However, the Court's decision to let Plaintiff amend the complaint and have one more bite at the apple means Workday is not off the hook just yet. Employers and vendors of recruiting software would be wise to pay attention to this case -and the anticipated wave of employment discrimination lawsuits that are apt to be filed - as algorithm-based applicant screening tools become more commonplace.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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