This AI-related lawsuit could be just the beginning of many

What many applicants may not realize is that, nowadays, the first hurdle in applying for a job is dealing with AI. Candidates now often must clear an artificial intelligence system that screens their résumés that quietly determines who advances, and whose application is filed away in a drawer or spam folder, never to see the light of day. 

Now, a new lawsuit filed on Tuesday is the first in the U.S. to accuse an AI hiring company of violating the Fair Credit Reporting Act. Eightfold AI, a venture capital-backed artificial intelligence hiring platform, is being sued by two workers in California for allegedly compiling reports used to screen job applicants without their knowledge, consent, or any opportunity to correct errors.

“I’ve applied to hundreds of jobs, but it feels like an unseen force is stopping me from being fairly considered,” said Erin Kistler, one of the plaintiffs, in a press release. Both plaintiffs applied to roles at several companies that use Eightfold AI, including PayPal and Microsoft, according to the complaint. 

Out of the thousands of jobs she has sought in the past year, only 0.3% of her applications have progressed to a follow-up or interview, Kistler told the New York Times. “It’s disheartening, and I know I’m not alone in feeling this way.”

Eightfold AI’s algorithm trawls career sites, job boards, and résumé databases to create a data set of “1 million job titles, 1 million skills, and the profiles of more than 1 billion people working in every job, profession, industry, and geography”, according to their website—much of it “inaccurate, incomplete, or drawn from unknown third-party sources,” the complaint alleges. 

Using an AI model trained on that data, plaintiffs say, Eightfold AI scores job applications on a scale of one to five, based on their skills, experience, and the hiring manager’s goals. These AI-generated evaluations function as “consumer reports under the federal Fair Credit Reporting Act (FCRA) and California law,” the lawsuit alleges.  

Unlike credit reports (a type of consumer report which the FCRA regulates to ensure accuracy and fairness), applicants are given no feedback on their scores or how the rating was generated, rarely aware that an algorithm evaluated them at all. If the tool is making mistakes, candidates have no ability to correct them. 

This creates a “black box” situation where we can see what goes into an AI system, and what comes out. But the reasoning in between remains hidden or incomprehensible to humans or the employers relying on the scoring when considering potential hires. This opacity is troubling at a time when more companies are relying on AI for hiring and candidate screening. 

A spokesperson for Eightfold AI told Fast Company that “this characterization about our products is factually incorrect. Eightfold offers technology that enterprises use to manage their talent processes and engage with candidates. Eightfold does not ‘lurk’ or scrape personal web history, social media or the like to build secret dossiers. Eightfold’s platform operates on data that is submitted by candidates to our customers or provided by our customers.” 

They continued: “We use information such as skills, experience and education that applicants choose to submit to our customers and data authorized by our customers under contract.” They also pointed to their blueprint to learn more about their specific data practices. 

The plaintiffs, meanwhile, are not demanding the elimination of AI from hiring. Instead, they are asking for AI companies to be held to the same standards as others. 

“Just because this company is using some fancy-sounding AI technology and is backed by venture capital doesn’t put it above the law,” David Seligman, Executive Director of Towards Justice, said in the press release. “This isn’t the wild west.”

Still, as AI becomes more pervasive in hiring, legal conflicts like this may just become more and more common.

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