AI Hiring Tools Can Violate FCRA
A recent lawsuit filed in California should raise serious concerns to any employer using artificial intelligence (AI) to screen applicants. The lawsuit, Kistler et al. v. Eightfold, AI Inc., claims the platform scraped personal data on over a billion workers, assigned each applicant a scored ranking, and filtered out lower-ranked candidates before any human reviewed their application, all without the disclosures required by Fair Credit Reporting Act (FCRA).
Currently, more than 95% of employers conduct preemployment background checks, with an increasing number relying on automated systems to process the information. If AI assembles or evaluates consumer report-related information for employment purposes and produces an output that affects an applicant’s eligibility, then an employer may now have an FCRA obligation—in which case, it must provide written disclosure to applicants, receive authorization from the applicants, and establish a clear adverse action process that gives candidates the chance to see and dispute the information used against them.
AI is Raising Religious Discrimination Claims
Employers are now struggling with how to accommodate employees seeking religious exemptions from using AI. It’s expected that many jobs will be affected by AI in the near future. Various religious organizations have issued guidance stating that human dignity must be central to the use of AI and that it should never reduce workers to mere “cogs in a machine.”
Claims seeking religious accommodation may be similar to those raised over vaccine mandates. Employees will seek accommodation saying using AI-enabled technology violates their religious beliefs. Such religious beliefs can be broadly defined and only have to be “bona fide” to trigger an accommodation obligation under Title VII of the Civil Rights Act of 1964. In a 2015 Equal Employment Opportunity Commission (EEOC) case, a jury awarded over $500,000 to a coal miner who alleged his employer denied him an accommodation for his religious belief that a biometric hand scanner would leave him with the “mark of the beast.”
With the subsequent Supreme Court decision in Groff v. DeJoy lowering the threshold for such exemptions and the EEOC’s current focus on religious discrimination, employers need to seriously consider how they will respond to such requests.