Amidst the whirlwind of Executive Orders flying out of the White House, you might have missed the one that rescinded President Biden’s E.O. 14110, which required federal agencies to use regulatory and enforcement tools to address discrimination concerns related to artificial intelligence (AI). As a result of that repeal, the EEOC and Department of Labor have purged their websites and removed a half-dozen employer guidance documents on AI in the workplace. (For a great recap, see the Cooley Law Firm article Gone but Not Forgotten: Federal Laws Still Apply Despite Guidance Disappearance Act.)
But, when federal guidance is absent, states, counties, and municipalities step in. For instance, since 2023 New York City Local Law 144 has regulated employer use of automated decision-making tools, and mandates independent bias audits of those tools annually.
And here in the Garden State, the New Jersey Attorney General has just issued its Guidance on Algorithmic Discrimination and the New Jersey Law Against Discrimination . While AI and other technology may offer benefits, the AG points out that there is potential to violate the laws against discrimination when these tools are use used in making employment decisions. As the report puts it: “The LAD prohibits algorithmic discrimination.”
Illegal algorithmic discrimination can be intentional, such as programming a resume screener to reject applicants over a certain age. (Real 2023 case!) It is also illegal when a seemingly neutral employment practice has an unjustifiable disparate impact based on a protected characteristic. For instance, suppose an employer relies on a software program’s recommendations to discipline an employee for taking breaks when the employee is allowed additional break time as a reasonable accommodation for disability, pregnancy, or lactation. That would be unlawful discrimination and retaliation under NJ law.
What does this mean to you? A recent survey by Rutgers University revealed that New Jersey employers are increasingly using AI-enabled tools in hiring. Of employers surveyed, 63% use one or more tools to recruit job applicants and/or make hiring decisions. Nonetheless, 47% of surveyed employers agreed that using AI-enabled tools in hiring might lead to unfair outcomes.
So. if you are looking at AI-powered tools for your workforce, do your homework. Make sure that you evaluate the design and testing of automated decision-making tools before they are used. Remember, as the NJ AG points out, that you are liable for unlawful algorithmic discrimination, even if the tool was designed or even administered by a third party. (And the software company can be liable too–Mobley v. Workday, Inc., 2024 U.S. Dist. LEXIS 11573 (N.D. Cal. Jan. 19, 2024).
