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Eightfold AI sued for alleged covert candidate ranking

As hiring tools evolve, AI companies need to comply with the legal safeguards provided by the Fair Credit Reporting Act, former EEOC Chair Jenny Yang said.

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“I’ve applied to hundreds of jobs, but it feels like an unseen force is stopping me from being fairly considered. It’s disheartening, and I know I’m not alone in feeling this way,” one of the plaintiffs said in a statement released Wednesday.

The AI-generated evaluations created during California-based Eightfold AI’s screening process allegedly failed to comply with rules for consumer reports set out in the Fair Credit Reporting Act and state law. This includes disclosure of a report being created, access to the report and the ability to dispute the report, the lawsuit said.

“There is no AI-exemption to these laws, which have for decades been an essential tool in protecting job applicants from abuses by third parties — like background check companies — that profit by collecting information about and evaluating job applicants,” per the lawsuit.

Notably, more recruiters are using AI right now to meet hiring demands, according to LinkedIn. The majority of talent acquisition professionals surveyed (93%) said they’re increasing AI use in 2026 to meet hiring goals and evaluate talent.

“As hiring tools evolve, AI companies like Eightfold must comply with these common-sense legal safeguards meant to protect everyday Americans,” Jenny Yang, partner at Outten & Golden LLP and former Chair of the U.S. Equal Employment Opportunity Commission, said in a statement.

These potential harms to workers, Yang said, are what “Congress sought to prevent when it enacted the FCRA.”

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