- Lawsuit alleges Meta used discriminatory AI tools in employee layoffs involving 26 plaintiffs
- Plaintiffs face challenges accessing evidence and are restricted by arbitration agreements
- Arbitration limits public disclosure and prevents class-action lawsuits on AI workplace use
A lawsuit alleging Meta Platforms used discriminatory AI tools to select employees for layoffs is highlighting the hurdles workers face in challenging employers' use of artificial intelligence. The case also illustrates why the expected wave of lawsuits over workplace AI has yet to materialise.
Legal experts said employees often have little visibility into how AI systems are used in the workplace, while many are bound by arbitration agreements that prevent disputes from being heard in court, a private process that can prevent such claims from ever being tested in public.
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U.S. District Judge William Orrick noted a key barrier for plaintiffs who claim AI discriminated against them in a decision last week that declined to stop Meta from completing the terminations of 26 plaintiffs: "they were not in the rooms where it happened."
The ruling underscored the challenge facing workers, who allege they were singled out for layoffs due to their disability or due to taking medical leave, as they often lack access to evidence showing how employment decisions were made.
The plaintiffs are also bound by arbitration agreements, preventing them from pursuing a class-action lawsuit, presenting their case before a jury or seeking damages in open court.
Lawsuits are blocked by arbitration agreements.
While worker advocates argue arbitration often favours employers and discourages claims, companies generally prefer the process because they believe it is faster and less expensive than going to court. Because arbitration proceedings are confidential, evidence uncovered in an individual case may never become public.
Christine Webber, co-chair of the civil rights and employment practice at plaintiffs' law firm Cohen Milstein Sellers & Toll, said, "Even if you establish that a particular system would produce discriminatory outcomes left and right, you have no way of sharing that information with other employees." Webber's firm is not involved in the Meta case.
These obstacles, according to Webber and other plaintiffs' attorneys, help explain why there are few high-profile court cases involving employers' use of AI, even as the technology becomes more common in workplaces, and why the complaint against Meta, which seeks only interim relief, is unusual.
One of the few prominent cases involving workplace AI targets HR software provider Workday, which has been accused of using AI that discriminated against job applicants based on race, age and disability. Since Workday does not have contracts with its clients' job applicants, arbitration is not an issue in that case. Workday has denied the allegations.
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The plaintiffs allege Meta used AI tools that measured productivity and AI token usage — a metric tracking how much employees used AI tools — when deciding which roles to eliminate.
According to the lawsuit, Meta relied on several AI-assisted internal systems, including a large language model assistant called "Metamate" and an employee-trained "second brain" that tracked employees' communications and documents. The complaint also alleges the company used productivity scores generated from scanning keystrokes, screen content, emails and browser history.
In response to the lawsuit, Meta said in court filings and public statements last week that all decisions related to the roughly 8,000 layoffs announced earlier this year were made by people. The company has denied using AI to identify employees for termination or to conduct performance appraisals. A Meta spokesperson said on Tuesday that the company had no further comment.
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