As businesses implant AI tools deeper into hiring, the litigation keeps coming – and the courts are expected to fill in the gaps left by the absence of settled precedent. The latest guidance arrives from the Northern District of California, where a magistrate judge has issued a discovery ruling in the closely watched Mobley v. Workday, Inc. litigation that tells employers a great deal about how these cases will be fought.
In Mobley, the putative nationwide collective action alleged that Workday’s AI-based applicant screening system disqualified job seekers aged 40 and older in violation of the Age Discrimination in Employment Act. After the court preliminarily certified the collective action in 2025, the parties turned to discovery: who has to hand over the applicant data needed to prove (or disprove) alleged discrimination?
On May 29, 2026, the court denied the plaintiffs’ motion to compel two key categories of evidence.
Notably, the court held that Workday cannot be forced to produce its customers’ applicant data. Under the Federal Rules of Civil Procedure, a party must produce only what is in its “possession, custody, or control.” Because Workday’s Master Subscription Agreement provides that the “Customer [referring to employer that utilized the AI services] owns all right, title and interest to its Customer Content,” the court found Workday lacked the requisite control.
Additionally, the court held Workday’s internal bias-testing...
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