AI Hiring Firm Eightfold Sued Over Secret Scoring of Job Seekers

Eightfold AI, a venture capital-backed artificial intelligence company that provides hiring and talent management software, is facing a lawsuit in California over allegations that it secretly scored job applicants without their knowledge or consent. The case raises fresh concerns about transparency, data privacy and the growing use of AI-driven tools in recruitment.

Eightfold AI supplies AI-powered hiring technology to large employers, including Microsoft and PayPal, as well as numerous Fortune 500 companies. According to the lawsuit, Eightfold allegedly compiled detailed assessments of job seekers that were then used by employers to screen candidates, without applicants being clearly informed that such scoring was taking place.

The complaint claims that Eightfold’s software analyzed résumés, employment histories and other personal data to generate rankings or predictions about candidates’ suitability for specific roles. Plaintiffs argue that this process effectively created hidden profiles that influenced hiring decisions, while applicants were left unaware that an algorithm was evaluating them behind the scenes.

At the heart of the case is the question of consent and disclosure. The lawsuit alleges that job seekers were not given meaningful notice that their data would be processed in this way, potentially violating California privacy and consumer protection laws. Critics of AI-driven hiring tools have long warned that opaque systems can disadvantage candidates who have no opportunity to understand, challenge or correct algorithmic assessments.

Eightfold has positioned its platform as a way to reduce bias and improve fairness in hiring by focusing on skills and potential rather than traditional credentials. However, the lawsuit underscores the tension between those claims and concerns that automated systems can introduce new forms of bias or discrimination, particularly when their inner workings are not transparent.

The case also highlights broader regulatory uncertainty around AI in employment. As companies increasingly rely on algorithmic tools to manage large volumes of applicants, regulators and courts are being asked to determine how existing laws apply to technologies that did not exist when many privacy rules were written. California, with some of the strictest data protection laws in the United States, has become a focal point for these disputes.

Eightfold has not publicly commented in detail on the allegations but is expected to contest the claims. The outcome could have significant implications not only for the company, but for the wider HR technology sector, which has rapidly adopted AI to streamline recruitment and workforce planning.

For employers, the lawsuit serves as a warning that the use of AI hiring tools carries legal and reputational risks if transparency and compliance are not prioritized. For job seekers, it reinforces growing concerns about how personal data is used in the hiring process, often in ways that remain invisible.

As AI becomes more deeply embedded in employment decisions, cases like this are likely to shape future standards for disclosure, consent and accountability in algorithmic hiring.

Sources: AirGuide Business airguide.info, bing.com, reuters.com