There is an emerging trend regarding the increased use of Artificial Intelligence (‘AI’) to screen job applications. This is where employers utilise AI tools in the hiring process, typically to help review applications more quickly and efficiently. According to a 2025 report by the World Economic Forum, over 88% of companies now integrate AI into their hiring process.
These AI tools may be instructed to screen applications in certain, specific ways, which may be unknown to the applicant. As such, it can cause frustration amongst applicants, who may feel they are required to pierce an invisible barrier before their application reaches a human moderator, and leave them wondering why they were rejected from a role.
The use of AI in the hiring process raises a pertinent question: what are the legal obligations placed on employers in utilising such tools? What level of liability is imposed on the employer when human decision-making is delegated to a machine?
Mobley v. Workday, Inc.
There is an ongoing case in the US which touches on these issues: Mobley v. Workday, Inc. [2026]. The Defendant, Workday created an AI hiring tool which was used by other companies to assist with their hiring processes. The Plaintiff, Derek Mobley, has alleged that Workday’s AI hiring tool unlawfully discriminated against job applicants. Workday has rebutted this by asserting that the ultimate hiring decision rests with the employer, not the AI.
One of the key issues that the courts will have to grapple with in this case concerns proportionality, specifically whether certain groups of candidates are discriminated against disproportionately, and if so, whether the company itself, as opposed to the AI tool, holds ultimate responsible for rejecting those applicants.
The case is ongoing; it may have significant implications for employers in respect of the level of liability they incur during the hiring process. At the moment, companies may want to consider adopting a precautionary attitude in order to protect itself from inadvertently incurring legal liability for an AI’s decision to reject an applicant. An important consideration will likely concern the level of human supervision needed to protect against discriminatory decisions. Further, to mitigate liability, employers may want to put in safeguards to ensure that any software utilised in the hiring process is sufficiently trained to weed out instances of unfair discrimination, regardless of intention.
UK Data Protection
Currently, individuals in the UK are protected from being subject to solely automated decision-making under the UK GDPR and the Data Protection Act 2018. Specifically, Art. 22 states that individuals “have the right not to be subject to a decision based solely on automated processing, including, profiling, which produces legal effects” (Art. 22(1) UK GDPR). So far, there has not been any cases to test whether this legislation provides sufficient protections for applicants alleging discrimination by AI tools. Further, proving that the AI tool was discriminatory, and, in turn, that the discriminatory decision was the reason that the applicant was rejected from a role, may be particularly challenging. It is possible that employers or third-party providers of AI systems will be required to ensure there is sufficient transparency regarding the rationale underlying the AI’s decision-making. This could be more difficult when the AI tool is obtained from a third-party provider.
What next?
Whilst the case of Mobley v. Workday, Inc has highlighted the challenges faced by job applicants, there may be some way to go to enshrine legal protections for applicants who feel discriminated against by an AI system. It is clear that employers are placing heavy reliance on AI screening tools in order to manage the hiring process. It is doubtful companies will want to revert to full human supervision given the perceived efficiency benefits, especially in circumstances where there is a significant volume of applications. However, employers must be particularly careful to ensure that any hiring practices do not inadvertently create discriminatory outcomes. Whilst a level of proportionately can be appreciated when carrying out a hiring round, especially in relation high-demand vacancies, employers will need to consider both their ethical responsibilities but also any legal obligations imposed on them when forming their decisions.
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