Update Applicable to:

All employers

What happened?

The Equal Employment Opportunity Commission (EEOC) entered into a settlement agreement in its first lawsuit alleging discrimination based on artificial intelligence (AI).

What are the details?

In the legal action, the Equal Employment Opportunity Commission (EEOC) asserted that iTutorGroup, an internet-based English-language tutoring firm, along with its associated entities, contravened the Age Discrimination in Employment Act (ADEA). This contravention stemmed from their deliberate programming of application software to automatically dismiss female candidates aged 55 and older, as well as male candidates aged 60 and older. Additionally, the EEOC contended that between late March 2020 and early April 2020, the defendants failed to hire not only the charging party but also over 200 other qualified tutor applicants aged 55 and older from the United States solely on the basis of their age.

The settlement between the EEOC and iTutorGroup serves as a noteworthy reminder to employers about the EEOC’s commitment to ensuring that the use of AI in the workplace aligns with federal antidiscrimination laws. In January 2023, the EEOC unveiled its draft enforcement plan for the years 2023 to 2027 (referred to as the SEP), affirming its intention to scrutinize the utilization of AI across the entire spectrum of an employee’s journey, from recruitment and application processes to performance management. It’s crucial to note that regardless of whether the employer or a third party programmed the AI, the employer will bear responsibility for its consequences. Consequently, employers must proactively take measures to ensure that these AI tools adhere to federal, state, and local laws.

For more information, please see the links below:

Settlement Court Document

Law Firm Article 1, Article 2, Article 3, Article 4

What do employers need to do?

In order to maintain compliance with laws such as Title VII, the ADEA, and the Americans with Disabilities Act, employers need to ensure that any AI employed in making employment decisions, including AI developed by third-party vendors, does not lead to disparate treatment or disparate impact on individuals belonging to protected categories. It’s important to recognize that vendors bear no responsibility for the decisions made by their AI tools. Therefore, employers should not solely rely on assurances from vendors regarding the compliance of their software with discrimination laws. Employers must thoroughly grasp the functioning of the AI in use and conduct periodic audits to confirm its adherence to legal requirements. Additionally, employers should assess whether their contractual agreement with the AI vendor includes provisions for indemnification or contribution in the event that the employer faces legal action related to the tool’s utilization. Furthermore, employers should take steps to ensure that employees who have access to AI systems receive proper training from the vendor or creator of the AI. This training is essential to ensure that employees use the AI correctly and avoid inadvertently introducing bias through minor adjustments or modifications to the software. The EEOC’s commitment to its Artificial Intelligence and Algorithmic Fairness Initiative is in full force.  If businesses have not been paying attention, now is the time to start. The Fisher Phillips law firm has also shared 10 Pointers to Ensure Compliance (Link).

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