{"id":2418,"date":"2025-09-23T08:17:30","date_gmt":"2025-09-23T12:17:30","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=2418"},"modified":"2025-09-23T08:17:31","modified_gmt":"2025-09-23T12:17:31","slug":"california-adopts-new-rules-expanding-the-fehas-reach-to-ai-tool-developers","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2025\/09\/23\/california-adopts-new-rules-expanding-the-fehas-reach-to-ai-tool-developers\/","title":{"rendered":"California Adopts New Rules Expanding The FEHA\u2019s Reach To AI Tool Developers"},"content":{"rendered":"
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By Gerald L. Maatman, Jr., Justin Donoho, and George J. Schaller<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways: <\/em><\/strong>On October 1, 2025, California\u2019s \u201cEmployment Regulations Regarding Automated-Decision Systems\u201d will take effect.  These new AI employment regulations can be accessed <\/em>here<\/em><\/a>.  The regulations add an \u201cagency\u201d theory under the California Fair Employment and Housing Act (FEHA) and formalize this theory\u2019s applicability to AI tool developers and companies employing AI tools that facilitate human decision making for recruitment, hiring, and promotion of job applicants and employees.  With California\u2019s inclusion of a private right of action under the FEHA, these new AI employment regulations may augur an uptick in AI employment tool class actions brought under the FEHA.  This blog post identifies key provisions of this new law and steps employers and AI tool developers can take to mitigate FEHA class action risk.<\/em><\/p>\n\n\n\n

Background  <\/strong><\/em><\/p>\n\n\n\n

In the widely-watched class action captioned Mobley v. Workday<\/em>, No. 23-CV-770 (N.D. Cal.), the plaintiff alleges that an AI tool developer\u2019s algorithm-based screening tools discriminated against job applicants on the basis of race, age, and disability in violation of Title VII of the Civil Rights Act of 1964 (\u201cTitle VII\u201d), the Age Discrimination in Employment Act of 1967 (\u201cADEA\u201d), the Americans with Disabilities Act Amendments Act of 2008 (\u201cADA\u201d), and California\u2019s FEHA.  Last year the U.S. District Court for the Northern District of California denied dismissal of the Title VII, ADEA, and ADA disparate impact claims on the theory that the developer of the algorithm was plausibly alleged to be the employer\u2019s agent, and dismissed the FEHA claim which was brought only under the then-available theory of intentional aiding and abetting (as we previously blogged about here<\/a>).<\/p>\n\n\n\n

In recent years, discrimination stemming from AI employment tools has been addressed by other state and local statutes, including Colorado\u2019s AI Act (CAIA) setting forth developers\u2019 and deployers\u2019 \u201cduty to avoid algorithmic discrimination,\u201d New York City\u2019s law regarding the use of automated employment decision tools, the Illinois AI Video Interview Act, and the 2024 amendment to the Illinois Human Rights Act (IHRA) to regulate the use of AI, with only the last of these laws providing for a private right of action (once it becomes effective January 1, 2026).<\/p>\n\n\n\n

Key Provisions Of California\u2019s AI Employment Regulations<\/strong><\/p>\n\n\n\n

California\u2019s AI employment regulations amend and clarify how the FEHA applies to AI employment tools, thus constituting a new development in case theories available to class action plaintiffs regarding alleged harms stemming from AI systems and algorithmic discrimination.  <\/p>\n\n\n\n

Employers and AI employment tool developers should take note of key provisions codified by California\u2019s new AI employment regulations, as follows:<\/p>\n\n\n\n