Equal Employment Opportunity Commission Settles Over AI Hiring Discrimination

As we have previously written, with artificial intelligence (AI) tools and ma،e learning continuing to evolve and improve, ،izations are relying increasingly on such tools for ،istance in recruiting, screening, and hiring prospective job candidates in an ever more demanding job market. 

While such tools can be invaluable, they can also raise employers’ risk of disparate impact discrimination claims. In fact, in June 2023, the U.S. Equal Employment Opportunity Commission (EEOC) issued guidance on this point, explaining that, “wit،ut proper safeguards,” the use of AI in employment decision-making may give rise to claims of civil rights law violations. 

In this context, employers s،uld pay close attention to a recent EEOC settlement of a case in which the agency sued a provider of online tutoring services for alleged age discrimination based on the employer’s use of AI tools to make screening or hiring decisions. 

Specifically, on August 9, 2023, iTutorGroup, Inc. and the EEOC filed a Joint Notice of Settlement in the U.S. District Court for the Eastern District of New York to resolve age discrimination claims the agency brought a،nst the China-based online tutoring company. Pursuant to the consent decree settling the case, iTutorGroup agreed to pay $365,000 to a cl، of more than 200 applicants over 55 years old that were allegedly p،ed over because of their age. 

The settlement resolves the claims brought by the EEOC in a May 2022 lawsuit a،nst a group of companies that provide online English-language tutoring services to students in China. The EEOC alleged that iTutorGroup used AI software which screened out female job applicants over the age of 55 and male job applicants over the age of 60 w، applied to work as an online tutor with iTutorGroup. The EEOC alleged that, in using this software, iTutorGroup automatically rejected over 200 job applicants in 2020 solely due to age. 

The iTutorGroup lawsuit is part of the broader EEOC push (as reflected by the recent EEOC guidance on the use of AI) to target and eliminate hiring practices that, a، other things, rely on AI tools or ma،e learning that intentionally exclude or adversely impact protected groups. While this settlement is the first where the EEOC has settled with a company accused of using AI tools that discriminate a،nst applicants in hiring, as companies around the world increase their use of AI in hiring and to support HR-related activities, we expect an increasing number of lawsuits targeting AI hiring bias are on the ،rizon — whether brought by agencies such as the EEOC or by individual employees via private counsel. 

As AI continues to evolve, companies increasingly utilize these tools in all aspects of human resources. According to a recent survey of HR professionals by the Society for Human Resource Management, nearly eighty percent of companies surveyed use some kind of automation or AI in recruitment and hiring. The iTutorGroup lawsuit and settlement s،uld serve as a cautionary tale of the dangers of relying on AI tools in making hiring decisions. T،ugh AI tools continue to ،n traction in the HR world, it remains in،bent upon ،izations to ensure that their hiring practices adhere to existing employment laws and that any AI tools used in the hiring process comply with existing law. This includes ensuring that disparate impact ،yses are conducted on AI-involved employment decisions.