How AI Can Cause Legal Problems for Employers

Artificial intelligence (AI) has sent shockwaves through nearly every industry. Companies of all shapes and sizes are weighing the risks and benefits of incorporating AI into their operations —and getting mixed results. One area where employers are increasingly using AI is in the hiring and employee evaluation process. While AI can smooth out some of the kinks inherent in the traditional hiring process, it also poses risks, as careless use of AI in hiring can lead to employment discrimination claims. Our Norfolk employment lawyers can help employers craft judicious AI policies and procedures that minimize those risks. 

Title VII 

Title VII of the Civil Rights Act prohibits employment discrimination based on race, color, religion, sex, and national origin. That includes both intentional discrimination and disparate impact discrimination. Generally, “disparate impact” discrimination occurs when an employer institutes a facially neutral policy — for example, requiring all employees to undergo a physical fitness test — that has a disproportionately adverse impact on a protected class. In the fitness test example, disparate impact could be shown where the test excluded large numbers of female applicants. 

According to Equal Employment Opportunity Commission (EEOC) Title VII guidance, the use of AI can constitute a “selection procedure” — i.e., procedures used to make decisions such as hiring, promotion, and firing. AI-enabled selection procedures could encompass: 

• Résumé scanners that prioritize applications that contain certain words
• Chatbots that ask applicants about their backgrounds
• Video software that evaluates applicants based on facial expressions
• Testing software that gives employees job fit scores

If these facially neutral AI-enabled selection procedures have an adverse impact on a protected class of applicants, the use of the tools may constitute a Title VII violation. Employers may be liable for Title VII violations even if they use an AI-enabled selection procedure that was developed by a third party, such as a software vendor. 

The ADA 

Title I of the Americans With Disabilities Act (ADA) prohibits employers from discriminating against employees and applicants on the basis of disability and obligates them to provide reasonable accommodations to such individuals when needed. According to EEOC ADA guidance, the use of AI-enabled selection procedures could violate the ADA if: 

• The employer fails to provide a reasonable accommodation that is necessary for the employee or applicant to be rated fairly by the tool 
• The tool intentionally or unintentionally screens out applicants with disabilities, even if the applicant is able to perform their job with a reasonable accommodation
• The tool asks prohibited questions about the applicant’s disability or medical background

As with Title VII violations, employers may be liable for ADA violations even if they use an AI-enabled selection procedure developed by a third party. 

Stay Within the Bounds of the Law With Help From a Norfolk Employment Lawyer

AI technology can significantly ease the hiring process, but employers who use it must be aware of the legal risks it poses. For more information about safely incorporating AI into your hiring process, please speak to a Norfolk employment lawyer at Pierce / Jewett by calling 757-624-9323 or using our online contact form.