Employment Law article by Lamb McErlane attorney Lauren M. Law, Esq.

Artificial intelligence (AI) is rapidly changing the way employers recruit, screen, and hire employees. From resume-screening software to automated interview analysis, AI promises faster hiring decisions and reduced administrative burdens. However, many employers are overlooking a critical question: Is AI technology creating employment-law exposure?

Federal and Pennsylvania employment laws apply regardless of whether a hiring decision is made by a manager or an algorithm. Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Pennsylvania Human Relations Act all prohibit certain forms of discrimination in employment and the hiring process.

One of the biggest risks involves “disparate impact” claims. In Griggs v. Duke Power Co., 401 U.S. 424 (1971), the United States Supreme Court held that facially neutral hiring practices may violate Title VII if they disproportionately exclude members of a protected class and are not sufficiently related to job performance. That principle did not disappear when employers began using AI.

For example, an AI tool trained on historical hiring data may unintentionally favor certain applicants while screening out others based on factors that correlate with age, disability, race, or sex. Even if the employer had no discriminatory intent, the resulting hiring patterns may still attract scrutiny from applicants, regulators, or plaintiffs’ attorneys.

Employers should also remember that purchasing software from a third-party vendor does not necessarily eliminate liability. The employer remains responsible for all of the employment decisions made on its behalf. As a result, businesses should understand how their AI tools operate, regularly review hiring outcomes, and ensure that reasonable accommodations remain available for applicants with disabilities.

Employees should likewise be aware that a rejection generated by an automated system is not automatically immune from legal challenge. Existing employment laws may provide protection where technology is used in a way that unlawfully disadvantages certain applicants or employees.

Artificial intelligence is here to stay. Employers who review their hiring tools now may reduce the risk of costly litigation in the future. Employees who believe an automated process unfairly affected their job opportunities should consider seeking legal advice to better understand their rights.

As AI continues to reshape the workplace, employers’ compliance obligations remain unchanged. Employment decisions must still comply with federal and Pennsylvania anti-discrimination laws. Understanding where technology ends and legal responsibility begins will be one of the defining employment-law issues of the coming decade.

Questions About AI in Hiring?

As employers increasingly use artificial intelligence to make hiring and employment decisions, the legal landscape continues to evolve. Lamb McErlane represents both employers and employees in navigating workplace issues involving AI, including hiring practices, discrimination claims, compliance, and risk management. Whether you are implementing AI tools or believe an automated decision may have affected your rights, we can help you understand your options and protect your interests. If you have any questions or if we may be of further assistance regarding workplace matters, contact Lamb McErlane attorney Lauren M. Law.

Lauren M. Law is a Senior Associate at Lamb McErlane. She focuses her practice on complex civil and business litigation, labor and employment law, and personal injury.

Lauren is a dedicated trial attorney with over a decade of experience in civil litigation. She exhibits proficiency across employment counseling, including policy development, conducting internal investigations for workplace discrimination, harassment, wrongful termination, retaliation, wage and hour disputes, whistleblower claims, as well as the negotiation of employment contracts, non-compete agreements, and severance packages.

Lauren can be reached by email at llaw@lambmcerlane.com or by phone at
267-388-2886.

*This alert is for educational purposes only and is not intended to be legal advice.