On August 9, the U.S. Equal Employment Opportunity Commission (“EEOC”) and iTutorGroup, Inc. filed a joint notice of settlement and consent decree announcing the settlement of a discrimination in hiring lawsuit. This settlement marks the first instance in which the EEOC settled a lawsuit alleging unlawful discrimination stemming from the use of Artificial Intelligence (“AI”) in recruiting software.

The lawsuit was centered around allegations that iTutorGroup programmed its recruiting software to automatically reject applicants over a specific age. In the settlement, iTutorGroup has agreed to pay $365,000.

AI tools are gaining traction in various employment-related areas, including recruitment and hiring. However, in the United States this swiftly evolving technology remains largely unregulated, creating a complex landscape and ambiguities for employers attempting to comply with existing legal standards. Our previous reporting has addressed some of the preliminary measures being taken by the EEOC and other federal, state, and local entities to address this regulatory gap and provide guidance for employers navigating this complex new terrain.

The lawsuit against and settlement with iTutorGroup is likely the first of many and underscores the necessity for clear guidance surrounding the use of AI and the importance of understanding the legal ramifications of reliance on automated decision-making processes. This case serves as a pertinent reminder of the legal obligations employers bear and the vigilance required in ensuring that innovative tools like AI are used in compliance with existing laws.