Job Seekers File Class-Action Lawsuit Against AI Hiring Tool Eightfold Over Secret Reports
In a significant legal challenge to artificial intelligence-driven recruitment practices, job seekers have initiated a class-action lawsuit against Eightfold AI, a prominent hiring tool utilized by major corporations including Microsoft and PayPal. The lawsuit centers on allegations that Eightfold generates confidential reports that significantly influence hiring outcomes while deliberately withholding this critical information from candidates.
Allegations of Consumer Protection Law Violations
The legal complaint, detailed in a Fortune report, contends that Eightfold's operational methods potentially breach United States consumer protection statutes. Specifically, the case argues that the company denies applicants their fundamental right to access, review, and correct personal data utilized in employment assessments. Should the court uphold this argument, the ruling could establish far-reaching precedents governing transparency requirements for AI-based hiring systems nationwide.
Claims of Hiring Transparency Law Violations
According to the lawsuit documentation, multiple job applicants whose applications were rejected without substantive explanation after processing through Eightfold's software have united in this legal action. The plaintiffs assert that Eightfold has violated both the federal Fair Credit Reporting Act and comparable consumer protection legislation in California. These regulations mandate that companies producing reports affecting individuals' opportunities—particularly in employment contexts—must disclose such information to the concerned parties and permit error correction.
How Eightfold's System Operates According to the Complaint
The legal filing describes Eightfold's system as operating covertly within job application processes, collecting extensive personal information to assist employers in candidate screening. The complaint alleges this data collection encompasses:
- Online activity and digital footprints
- Geolocation information
- Various other digital signals and behavioral patterns
Plaintiffs maintain that candidates receive no notification regarding what specific data is gathered, how this information is utilized, or precisely how it impacts hiring determinations. What remains undisputed is that Eightfold employs artificial intelligence to generate numerical scores ranging from zero to five, quantifying how closely applicants match specific job roles, which employers then incorporate into their hiring decisions.
Eightfold's Response and Denial of Allegations
Eightfold has categorically denied all allegations presented in the lawsuit. A company spokesperson, quoted in the Fortune report, stated that their tool exclusively utilizes information candidates voluntarily share or data provided directly by employer clients. The company explicitly denied engaging in social media scraping or collecting concealed data, characterizing the lawsuit's claims as entirely without merit.
This legal confrontation emerges amid growing global scrutiny of artificial intelligence applications in employment contexts, raising fundamental questions about algorithmic transparency, data privacy rights, and equitable hiring practices in the digital age.
