US EEOC's first settlement in AI hiring discrimination

On August 9, 2023, the Federal Equal Employment Opportunity Commission (EEOC) entered into a proposed settlement with iTutorGroup,Inc. and its affiliates (ITG) and with respect to the EEOC's claims that ITG programmed its software to reject female job applicants age 55 or older, and male job applicants age 60 or older. ITG has denied all allegations. The proposed settlement is subject to court approval. Equal Employment Opportunity Comm'n v. iTutorGroup, Inc., case no. 1:22-cv-02565-PKC-PK (ED NY filed Aug. 9, 2023).

ITG offers tutoring to individuals in China. The EEOC filed its complaint in May of 2022, claiming that 200 qualified US applicants for tutoring positions had been denied jobs because of their age, in violation of the Age Discrimination in Employment Act (ADEA). The EEOC sought back pay for the rejected applicants as well as injunctive relief under ADEA.

Under the proposed settlement, ITG would be required to pay US$365,000 to a claims administrator, with amounts to be paid to rejected claimants that can prove (1) they were rejected by ITG in March or April of 2020 and (2) they meet the eligibility criteria and provide the EEOC with required information. The proposed settlement specifies that amounts paid will be treated as 50 percent compensatory damages and 50 percent as backpay. In addition, the proposed settlement would require that ITG contact the rejected applicants and invite them to reapply for the position of tutor.

With respect to injunctive relief, the proposed settlement would require both initial and ongoing training. The initial training would (a) be required to be provided by a third party approved by the EEOC, (b) require attendance by all ITG supervisory and management employees as well as any employees or independent contractors involved in the screening, hiring or supervising of tutors or tutor applicants, and (c) last for 4 hours, covering such topics as obligations under US federal anti-discrimination laws, ADEA, Americans with Disabilities Act, Equal Pay Act, the Genetic Information Nondiscrimination Act and Title VII of the Civil Rights Act of 1964, as well as ITG's policies and procedures. The training would also include examples of unlawful conduct and an employee's or applicant's right to file a complaint with the EEOC.

Ongoing training would need to be provided on an annual basis, as well as training for new employees who are hired by ITG as supervisory and management employees as well as any employees or independent contractors involved in the screening, hiring or supervising of tutors or tutor applicants.

In addition, the proposed settlement would prohibit ITG from requesting dates of birth from applicants, or screening applicants based on age. The proposed settlement would, however, permit ITG to ask applicants to confirm that they are over the age of 18 to determine compliance with any laws, regulations or ordinances.

The proposed settlement would include reporting and monitoring obligations for ITG. The term of the proposed settlement is the later of (a) five years from the date of the settlement or (b) 3 years from ITG's resumption of soliciting, receiving or considering applications for tutors or similar positions.

Lessons learned

Employers need to know what technology or artificial intelligence is being used for their recruiting and hiring practices, and to make sure that any programs comply with applicable requirements. Specifically, Employers will need to scrutinize the programming and application of any screening software used for candidates. For screening software that falls within the parameters of artificial intelligence, the EEOC has issued technical assistance documents on the use of artificial intelligence and the Americans with Disabilities Act, and for Title VII of the Civil Rights Act of 1964. As we discussed in our previous update, New York City begins enforcing restrictions on the use of artificial intelligence in employment decisions, New York City's law and regulation with respect to the use of AI in employment went into effect on July 5, 2023.