September 20, 2023
AI Replaces HR, HR Sues, & it Makes the News!
On September 20th, a complaint was filed in a U.S. District Court alleging the employer announced that it “intends to replace thousands of employees with AI technology, particularly in [the company’s] human resources (“HR”) organization. Rather than laying off its weakest, least experienced or least knowledgeable HR employees, [the employer] has disproportionately terminated its older employees despite their high levels of performance.”
The allegations in the complaint describe:
- one of the plaintiffs, a 66-year-old HR employee who was fired, as having “excelled in her HR Manager role, and her performance reviews and her direct supervisor made that clear…[as did her] stellar engagement scores.”
- in assessing who would be laid off, the Company assessed an employee’s “runway” to refer the number of years an employee will likely remain working before they retire;
- decision-makers also often referred to the need for employees with “new skills” or “new energy” – i.e., younger employees;
- and more.
Why the reduction in force?. Reportedly, it was due in part to the introduction of “chatbots” and other AI tools that could take the place of “real humans handling human resources functions.” This would result in a reduction of approximately 50% of the company’s HR professionals.
The complaint seeks relief including and not limited to back pay, front pay, compensatory damages, emotional distress damages, liquidated damages, punitive damages, penalties available under applicable laws; fees for experts and attorneys.
As our economy may struggle, so do employers. When considering a reduction in force, be sure to work with your company’s legal counsel to avoid even the appearance of adverse impact, whether it is based on age, sex, race, or any other legally protected status.