Can AI in Hiring Tools Lead to Discrimination Claims? What Employers Need to Know

AI in Hiring: Executive Orders vs. Legal Uncertainty

Artificial Intelligence (AI) has revolutionized the hiring process, promising efficiency, objectivity, and scalability. However, recent legal developments suggest that employers must be cautious when relying on AI-based hiring tools—particularly those involving third-party vendors.

Although a recent Executive Order from former President Trump promoted the use of AI and downplayed concerns about potential discrimination, the legal landscape tells a different story. A new complaint filed by the ACLU underscores how AI tools can still expose employers to serious legal risk.

The Case: AI Video Interviews and Discrimination Allegations

The ACLU filed a complaint involving an employer that used a third-party AI vendor to conduct video-based candidate screening. The problem? The tool included a remote video interview component that relied on voice transcription technology—a major issue for one deaf applicant.

According to the ACLU, the AI transcription service used during the interview performed poorly due to the applicant's speech patterns, which were impacted by their hearing disability. Research cited in the complaint shows that AI-driven transcription tools often fail to accurately capture the speech of deaf, hard of hearing, and non-white speakers.

The ACLU alleges that this inaccuracy translated into discriminatory hiring practices, effectively penalizing certain applicants based on disability and race. Because the employer relied on this AI vendor’s technology, they too could be held liable for discriminatory outcomes.

What This Means for Employers

Even though the Trump-era Executive Order supported AI innovation, this case is a stark reminder that executive policy does not override legal responsibilities under federal anti-discrimination laws like the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act.

Key takeaways for employers:

• Vetting AI Vendors Is Crucial: Ensure that any third-party hiring technology you use has been tested for bias across race, disability, gender, and other protected classes.
• ADA and Civil Rights Compliance Still Apply: AI tools are not exempt from federal anti-discrimination laws. If your hiring tools disadvantage candidates with disabilities or other protected characteristics, your company could be liable—even if you didn’t build the tool yourself.
• Transparency and Accommodation Are Key: Always provide reasonable accommodations for applicants with disabilities, and be prepared to offer non-AI alternatives when requested.
• Stay Informed: This case is still in its early stages, but it highlights an evolving area of law. Employers should continue to monitor guidance from the EEOC, DOJ, and other regulatory bodies on the use of AI in employment.

The Bottom Line

While AI can enhance hiring, it must be implemented responsibly. Executive support for AI does not eliminate the risk of litigation or the need for compliance. Employers must strike a balance between innovation and inclusion—and that means carefully evaluating how AI tools impact every candidate.

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