{"id":736,"date":"2023-08-11T21:07:24","date_gmt":"2023-08-12T01:07:24","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=736"},"modified":"2023-08-11T21:07:24","modified_gmt":"2023-08-12T01:07:24","slug":"eeoc-settles-its-first-discrimination-lawsuit-involving-artificial-intelligence-hiring-software","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2023\/08\/11\/eeoc-settles-its-first-discrimination-lawsuit-involving-artificial-intelligence-hiring-software\/","title":{"rendered":"EEOC Settles Its First Discrimination Lawsuit Involving Artificial Intelligence Hiring Software"},"content":{"rendered":"

\"\"<\/a>By Alex W. Karasik, Gerald L. Maatman, Jr. and George J. Schaller<\/b><\/p>\n

Duane Morris Takeaways<\/i>: <\/b>InEqual Employment Opportunity Commission v. ITutorGroup, Inc., et al., No. 1:22-CV-2565 (E.D.N.Y. Aug. 9, 2023), the EEOC and a tutoring company filed<\/a> <\/i>a Joint Settlement Agreement and Consent Decree in the U.S. District Court for the Eastern District of New York, memorializing a $365,000 settlement for claims involving hiring software that automatically rejected applicants based on their age. This is first EEOC settlement involving artificial intelligence (\u201cAI\u201d) software bias. As we previously blogged about here<\/a>, eradicating discrimination stemming from AI software is an EEOC priority that is here to stay. For employers who utilize AI software in their hiring processes, this settlement highlights the potential risk of legal and monetary exposure when AI software generates hiring decisions that disparately impact applicants from protected classes.<\/i><\/p>\n

Case Background<\/b><\/p>\n

Defendants iTutorGroup, Inc., Shanghai Ping\u2019An Intelligent Education Technology Co., LTD, and Tutor Group Limited (collectively \u201cDefendants\u201d) hired tutors to provide English-language tutoring to adults and children in China.\u00a0 Id. <\/i>at *3. \u00a0Defendants received tutor applications through their website. \u00a0The sole qualification to be hired as a tutor for Defendants is a bachelor\u2019s degree. \u00a0Additionally, as part of the application process, applicants provide their date of birth.<\/p>\n

On May 5, 2022, the EEOC filed a lawsuit on behalf of Wendy Pincus, the Charging Party, who was over the age of 55 at the time she submitted her application.\u00a0 The EEOC alleged that Charging Party provided her date of birth on her application and was immediately rejected. \u00a0Accordingly, the EEOC alleged that Defendants violated the Age Discrimination in Employment Act of 1967 (\u201cADEA\u201d) for programming its hiring software to reject female applicants over 55 years old and male applicants over 60 years old.\u00a0 Id. <\/i>at *1. Specifically, the EEOC alleged that in early 2020, Defendants failed to hire Charging Party, Wendy Pincus, and more than 200 other qualified applicants age 55 and older from the United States because of their age.\u00a0 Id.<\/i><\/p>\n

The Consent Decree<\/u><\/b><\/p>\n

On August 9, 2023, the parties filed a \u201cJoint Notice Of Settlement Agreement And Requested Approval And Execution Of Consent Decree,\u201d (the \u201cConsent Decree.\u201d). \u00a0Id<\/i>. \u00a0The Consent Decree confirmed that the parties agreed to settle for $365,000, to be distributed to tutor applicants who were allegedly rejected by Defendants because of their age, during the time period of March 2020 through April 2020. \u00a0Id.<\/i> at 15.\u00a0 The settlement payments will be split evenly between compensatory damages and backpay. \u00a0Id. <\/i>at 16.<\/p>\n

In terms of non-monetary relief, the Consent Decree also requires Defendants to provide anti-discrimination policies and complaint procedures applicable to screening, hiring, and supervision of tutors and tutor applicants. \u00a0Id. <\/i>at 9. \u00a0Further, the Consent Decree requires Defendants to provide training programs on an annual basis for all supervisors and managers involved in the hiring process. \u00a0Id. <\/i>at 12-13.\u00a0 The Consent Decree, which will remain in effect for five years, also contains reporting requirements and record-keeping requirements.\u00a0 Most notably, the Consent Decree contains a monitoring requirement, which allows the EEOC to inspect the premises and records of the Defendants, and conduct interviews with the Defendant\u2019s officers, agents, employees, and independent contractors to ensure compliance.<\/p>\n

Implications For Employers<\/b><\/p>\n

To best deter EEOC-initiated litigation involving AI in the hiring context, employers should review their AI software upon implementation to ensure applicants are not excluded based on any protected class.\u00a0 Employers should also regularly audit the use of these programs to make sure the AI software is not resulting in adverse impact on applicants in protected-category groups.<\/p>\n

This significant settlement should serve as a cautionary tale for businesses who use AI in hiring and are not actively monitoring its impact. \u00a0The EEOC\u2019s commitment to its Artificial<\/a> In<\/a>telligence<\/a> and Algorithmic Fairness<\/a> Initiative<\/a> is in full force. \u00a0If businesses have not been paying attention, now is the time to start.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Alex W. Karasik, Gerald L. Maatman, Jr. and George J. Schaller Duane Morris Takeaways: InEqual Employment Opportunity Commission v. ITutorGroup, Inc., et al., No. 1:22-CV-2565 (E.D.N.Y. Aug. 9, 2023), the EEOC and a tutoring company filed a Joint Settlement Agreement and Consent Decree in the U.S. District Court for the Eastern District of New … <\/p>\n

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