Before you've had your morning coffee, artificial intelligence ("AI") has already made a dozen decisions for you, and now, it's punched its time card and is clocking into our workplaces. Employers now have access to a seemingly endless number of AI or algorithmic decision-making tools to assist in employment decisions like recruitment, resume screening, hiring, retention, evaluation, promotion, and more. These tools can be used to save time, increase objectivity, optimize performance, or reduce bias. The use of these tools, however, must align with the legal requirements under Title VII of the Civil Rights Act of 1964.

The U.S. Equal Employment Opportunity Commission ("EEOC") enforces and provides guidance on federal equal employment opportunity ("EEO") laws and recently published a letter to educate employers and stakeholders about the application of EEO laws to software, algorithms, and AI in employment decisions. This guidance accentuates the EEOC's focus on AI in the workplace and highlights potential legal compliance issues.

The guidance makes clear that an employer's use of AI must comply with Title VII of the Civil Rights Act of 1964 and may not result in a "disparate impact" or "adverse impact" that may have a disproportionately large negative effect based on factors such as race, color, religion, and sex. Moreover, employers may be held accountable under Title VII for third-party-designed tools they utilize for aiding or making employment decisions. This puts the burden of compliance on employers and emphasizes the critical need for thorough vetting of software, products, or vendors to ensure they comply with EEO laws.

AI has been a recent focal point for the EEOC. In May 2022, the EEOC provided technical guidance regarding employer use of advanced technologies, particularly how they comply with the ADA. That guidance focused on the potential to exclude or "screen out" individuals with disabilities, offering recommended practices to mitigate this risk.

The latest guidance serves as an important reminder to employers of the legal considerations associated with AI-based tools. It doesn't introduce new policies but provides further insight into the EEOC's views on the implementation of AI in the recruitment and evaluation of employees, emphasizing the use of AI technology without infringing on legal and ethical obligations. If you have any questions about this Alert or would like assistance with evaluating whether an automated process used by a particular software, product, or vendor complies with Title VII, we encourage you to contact your Shulman Rogers attorney for solutions and recommendations.

The full text of EEOC's guidance can be accessed here.

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