Written by Jody Godoy
Jan 21 (Reuters) – Eightfold AI, a venture capital-backed artificial intelligence recruiting platform used by Microsoft, PayPal and many other Fortune 500 companies, is being sued in California for allegedly creating reports used to screen job applicants without knowledge of the candidates.
A lawsuit filed Tuesday alleging Eightfold violated the Fair Credit Reporting Act illustrates how consumer advocates are seeking to apply current law to AI systems that can draw inferences about individuals based on vast amounts of data.
Santa Clara, Calif.-based Eightfold offers tools that promise to speed up the hiring process by using large amounts of data from online resumes and job listings to evaluate job candidates and predict whether they’re a good fit for the job. But candidates applying to companies that use these tools are not notified or given the opportunity to dispute their mistakes, job seekers Erin Kistler and Sruti Bhowmik allege in a proposed class action lawsuit.
As a result, Eightfold violates the FCRA and a California law that gives consumers the right to view and dispute credit reports used for loans and employment, the lawsuit alleges.
“There are no exemptions for AI in these laws, and for decades it has been an essential tool to protect job applicants from abuse by third parties, such as background check companies, who profit from collecting and evaluating information about job applicants,” they said in the lawsuit.
A spokesperson for Eightfold did not immediately respond to a request for comment. Eightfold is backed by venture capital firms including SoftBank Vision Fund and General Catalyst.
Mr. Kistler and Mr. Bhowmik filed the lawsuit in California state court on behalf of all U.S. job applicants who applied for jobs and were evaluated using the company’s tools. Labor law firm Outen & Golden and nonprofit advocacy group Towards Justice will represent the proposed tiers.
According to the complaint, Eightfold creates talent profiles for job applicants, including personality descriptions such as “team player” and “introvert,” ranks their “quality of education,” and predicts future positions and companies.
According to the complaint, Kistler applied for jobs at several companies that use Eightfold, including PayPal, and Bhowmik applied to companies including Microsoft. Both have degrees in science or technology and over 10 years of experience. Neither were hired and believe Eightfold’s tools played a role.
Microsoft and PayPal are not defendants in this lawsuit. A Microsoft spokesperson declined to comment. A PayPal spokesperson did not immediately respond to a request for comment.
According to the company’s website, one-third of Eightfold’s customers are Fortune 500 companies, including Salesforce and Bayer. The New York State Department of Labor and the Colorado Department of Labor and Employment also offer Eightfold-powered platforms for job seekers.
(Reporting by Jody Godoy in New York; Editing by Matthew Lewis)
