Source: JD Supra

JD Supra discusses the emerging legal risks for employers utilizing artificial intelligence in their hiring processes, noting a significant jump in AI adoption by HR leaders in 2025. The article emphasizes that the Equal Employment Opportunity Commission (EEOC) holds employers liable for discriminatory outcomes under Title VII of the Civil Rights Act, even when such outcomes result from third-party algorithmic tools. The legal analysis warns that neutral-appearing technologies, such as resume scanners and video interviewing software, can create a disparate impact by prioritizing keywords or behavioral cues that correlate with protected characteristics like race, disability, or national origin.

The piece highlights the evolving regulatory environment, pointing to New York City's Local Law 144, which mandates annual bias audits, and new California regulations effective October 2025 that prohibit discriminatory automated decision systems. Employers are advised to implement robust compliance measures, including conducting independent bias audits, ensuring human oversight in decision-making, and renegotiating vendor contracts to address liability for algorithmic bias. The article stresses that ignorance of a tool's internal mechanics is not a defense, and that proactive management of AI tools is essential to avoid costly litigation and enforcement actions.