EEOC Brings First-of-Its-Kind Enforcement Action Against Employer for Using Artificial Intelligence to Discriminate Against Applicants; Settles for Six Figures

Increasingly, employers are utilizing automated systems, including artificial intelligence (AI) or
machine learning, to target job advertisements, recruit applicants, and make hiring decisions.
Such systems expose employers to liability if they intentionally or unintentionally exclude or
disparately impact protected groups. According to the Equal Employment Opportunity
Commission (EEOC), that’s precisely what happened with iTutorGroup, Inc.

iTutorGroup is the brand name for three integrated companies that provide English-language tutoring
services to students in China. According to the EEOC, iTutorGroup programmed its application
software to reject female applicants over the age of 55 and male applicants over the age of 60.

A disappointed applicant, Wendy Pincus, suspected discrimination when she applied using her real
birthdate, indicating that she was over 55. However, iTutorGroup invited her for an interview when she
later applied with a more recent birthdate and otherwise identical application information.

Pincus filed a charge with the EEOC, which sued the company under the Age Discrimination in
Employment Act on behalf of the Pincus and over 200 other job applicants. The suit seeks lost wages
and liquidated damages for each class member, as well as strong injunctive relief to prevent future
age discrimination.

Last week, the parties filed a consent decree indicating that they agreed to settle the case for
$365,000, in addition to extensive compliance, employee notice, training, monitoring, reporting, and
recordkeeping requirements. The decree will become final if the court accepts it.

In January, the EEOC announced its focus on employment decisions in which employers utilize
technology that may violate employment laws. This includes software featuring algorithmic decision-
making or machine learning (such as AI), automated recruitment and selection tools, production and
performance management tools, and other existing or emerging technological tools. This
announcement can be found here.

In April, EEOC Chair Charlotte A. Burrows further emphasized this interest in a joint statement with
leaders of the US Department of Justice (DOJ), the Federal Trade Commission (FTC), and the
Consumer Financial Protection Bureau (CFPB), stating that, “that the use of advanced technologies,
including artificial intelligence, must be consistent with federal laws. America’s workplace civil rights
laws reflect our most cherished values of justice, fairness and opportunity, and the EEOC has a
solemn responsibility to vigorously enforce them in this new context. We will continue to raise
awareness on this topic; to help educate employers, vendors, and workers; and where necessary, to
use our enforcement authorities to ensure AI does not become a high-tech pathway to discrimination.”

iTutorGroup is the first enforcement action involving the use of AI in employment decisions, illustrating
that employers that misuse those tools could face serious consequences.