Eightfold AI, a venture capital-backed artificial intelligence hiring platform used by major companies like Microsoft and PayPal, is being sued in California for allegedly compiling reports to screen job applicants without their knowledge. The lawsuit, filed on Tuesday, accuses Eightfold of violating the Fair Credit Reporting Act (FCRA), highlighting how consumer advocates are applying existing laws to AI systems that draw inferences about individuals based on vast data.
How Eightfold AI Works
Eightfold provides tools that promise to speed up the hiring process by assessing job applicants and predicting their fit for roles using data from online resumes and job listings. However, candidates applying to companies using these tools are not given notice or a chance to dispute errors, as alleged by job applicants Erin Kistler and Sruti Bhaumik in their proposed class action.
Legal Violations and Consumer Rights
The lawsuit claims Eightfold violated the FCRA and a California law that gives consumers the right to view and challenge credit reports used in lending and hiring. "There is no AI-exemption to these laws, which have for decades been an essential tool in protecting job applicants from abuses by third parties—like background check companies—that profit by collecting information about and evaluating job applicants," stated in the lawsuit.
Details of the Allegations
According to the complaint, Eightfold creates talent profiles of job seekers that include personality descriptions such as "team player" and "introvert," ranks their "quality of education," and predicts their future titles and companies. Kistler applied to roles at companies including PayPal, and Bhaumik applied to companies including Microsoft. Both hold science or tech degrees with over 10 years of experience, were not hired, and believe Eightfold's tools played a role.
Company and Defendant Status
A spokesperson for Eightfold did not immediately reply to a request for comment. The company is backed by venture capital firms like SoftBank Vision Fund and General Catalyst. Microsoft and PayPal are not defendants in the lawsuit; a Microsoft spokesperson declined to comment, and PayPal did not immediately reply.
The lawsuit was filed in California state court on behalf of all U.S. job seekers evaluated using Eightfold's tools, represented by labor law firm Outten & Golden and nonprofit advocacy group Towards Justice.
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