Are AI tools likely to contribute to the increase in EEOC bias and discrimination cases?

In the fiscal year 2023, the Equal Employment Opportunity Commission (EEOC) witnessed a notable surge in discrimination and harassment lawsuits. According to a Seyfarth report, the most common discrimination lawsuits in 2023 were claims under the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964. In fiscal year 2023, the EEOC filed 48 disability-related lawsuits, which is nearly double the 27 ADA cases filed in 2022.?

The increasing use of AI, such as generative AI, in HR, is posing a challenge and exposing companies to potential EEOC violations. According to a Gartner report, 76% of HR leaders believe that organizations failing to implement AI solutions within the next 12 to 24 months may lag in organizational success compared to those embracing AI. The AI in HR market is projected to reach $9.80 billion by 2027 at a CAGR of 16.7 (The Business Research Company)

While AI holds the promise to revolutionize HR, its widespread adoption raises concerns about the rise in bias and discrimination lawsuits. The EEOC's recent announcement to crackdown on discrimination stemming from AI usage, especially in hiring tools, adds urgency to the need for organizations to address these challenges.

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EEOC's Response to AI Discrimination

In response to the surge in AI-related discrimination cases, the EEOC settled its inaugural AI discrimination lawsuit in 2023. The tutoring company iTutorGroup agreed to pay $365,000 to resolve the case, wherein the EEOC alleged that the company programmed its application review software to automatically reject female applicants aged 55 or older and male applicants aged 60 or older. This landmark case highlights the legal consequences and financial implications for organizations that fail to address bias in AI tools. Employers must take proactive measures to audit and rectify discriminatory practices associated with AI in their HR processes.

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Regulatory Landscape and Compliance Measures

With the rise in AI-related bias and discrimination claims, regulators are taking notice. In 2023, New York City passed a groundbreaking law requiring employers to conduct annual bias audits of automated employment decision-making tools. Additionally, Illinois enacted the Artificial Intelligence Video Interview Act in 2022, imposing certain requirements on employers that use AI to analyze video interviews. California, New Jersey, New York, Vermont, and Washington, D.C., have proposed legislation to regulate AI use in hiring and promotion. Employers and employment agencies must provide notice of the use of AEDTs (automated employment decision tools) to employees and candidates who reside in New York City for employment.

The regulatory landscape, however, faces challenges. New York City law, Local Law 144, mandating companies to disclose how algorithms impact hiring and promotions, has been largely overlooked, according to The Wall Street Journal. A Cornell University study revealed that only 18 out of 400 companies using "automated employment decision tools" had posted results on their websites. Local Law 144 aims to prompt companies to assess if their technology unintentionally exhibits bias in employment decisions. The law's wording has been criticized, with one researcher noting that employers have "almost unlimited discretion" to decide if they're complying.

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Legislators and industry groups are closely monitoring Local Law 144 as a test case for future AI regulation. The lack of compliance underscores the challenges in enforcing such laws effectively. However, the EEOC has taken a strong stance, but the response of states to ensure compliance remains uncertain. As we navigate this evolving landscape, it remains to be seen if other states can compel companies to adhere to regulations and whether consequences for non-compliance will be enforced. The actions of states will play a crucial role in shaping the regulatory framework for AI in employment decisions.

Mitigating Bias and Discrimination: The Role of Employers and Lawyers

Employers play a crucial role in mitigating AI-related bias and discrimination by implementing comprehensive strategies. Employment lawyers, as key advisors, can guide organizations in leveraging technology, specifically data analytics, to monitor and address potential biases—proactive measures, including AI auditing. Notably, DEI Directive's data analytics comprehensive platform is poised to be an asset for both HR and employment lawyers. We help organizations be proactive, monitoring hiring trends and attrition to combat potential biases and take necessary steps to diminish potential EEOC violations. Additionally, we have simplified and automated the EEO-1 form for easy access by stakeholders, particularly the legal team, facilitating swift resolution and evidence of compliance when dealing with EEOC matters.

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Conclusion

AI-related bias and discrimination lawsuits present significant challenges for employers in the modern workplace. Understanding the risks, staying informed about regulatory developments, and proactively addressing bias in AI tools are essential steps to navigate this complex landscape. Employers should leverage technology, particularly data analytics, to enhance their compliance efforts and diminish EEOC claims and, bias, and discrimination lawsuits.

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Interested in discovering more about DEI Directive's EEOC compliance capabilities? Contact me, and let's have a chat!