Employers: A Cautionary Tale about Using AI Tools in Decision-making
Twenty-six current and former employees have sued a major technology company in California federal court, alleging it used biased artificial intelligence systems to select workers for a May 2026 layoff affecting roughly 10 percent of its workforce.
The plaintiffs claim the tools measured productivity and performance in ways that penalized those on protected medical, family, pregnancy-related, and/or disability leave, causing leave-takers to be disproportionately targeted. They assert claims under the FMLA, Title VII, the ADA, and related state laws, and seek an injunction and independent audit of the selection process.
The case is an early warning that employers using AI in layoff or performance decisions should confirm those systems account for protected leave and accommodations and other potential biases, include individualized human review, and that employers document the decision-making process and legitimate, non-discriminatory and non-retaliatory business reason for inclusion in the layoff.
With statutes governing AI in employment developing at a rapid pace, employers need to stay abreast of these changes and work closely with legal counsel before using AI tools for employment-related decisions.