AI Hiring Firm Eightfold Sued Over Undisclosed Job Seeker Scoring

Published: 22 Jan 2026

An artificial intelligence company whose software is used by major employers to screen job applicants is facing a lawsuit that could test how existing employment and consumer protection laws apply to automated hiring tools.

Eightfold AI, based in Silicon Valley, has been sued by job seekers who say the company created detailed evaluations about them without their knowledge and shared those assessments with employers, shaping hiring outcomes behind closed doors.

The case arrives as AI-driven recruitment tools become common across corporate America, often operating in ways applicants cannot see or question.

What the Job Seekers Are Claiming

Two applicants filed the lawsuit in California, seeking to represent people across the United States who were evaluated using Eightfold’s technology.

They allege that Eightfold collected and analyzed their data to produce hidden reports that were used in hiring decisions, without giving candidates basic rights that U.S. law guarantees.

At the heart of their claim is the idea that applicants were never told:

That an outside company was evaluating them.
What information was used to judge them?
Whether the assessments contained errors.

They argue that this lack of transparency violates laws meant to protect workers from unfair screening practices.

A Legal Test for AI in Hiring

The lawsuit relies on the Fair Credit Reporting Act, a law written long before artificial intelligence but designed to regulate third-party reports used in employment decisions.

The plaintiffs say that when technology profiles people, ranks their qualifications and influences whether they are hired, it functions much like traditional background or credit checks.

They argue that AI should not escape oversight simply because decisions are automated.

California consumer protection laws are also cited, including rules that give individuals the right to access and challenge reports used against them.

How Eightfold’s System Is Described

Eightfold markets its platform as a way to help employers hire faster by matching candidates to roles using large data sets.

According to the lawsuit, the system creates talent profiles that may include:

personality descriptions
assessments of education quality
predictions about future job roles or employers

Applicants say these judgments were made without their consent and may be inaccurate or misleading.

A Tool Used by Major Employers

Eightfold’s reach is extensive. About one third of its customers are Fortune 500 companies, and its technology is also used by government labor agencies.

The two plaintiffs say they applied to large employers that rely on Eightfold’s tools and believe the automated assessments played a role in their rejection. The companies that posted the jobs are not named as defendants.

Why the Case Matters

Eightfold has not publicly responded to the lawsuit. The company is backed by prominent venture capital firms and operates in a rapidly expanding AI hiring market.

Legal observers say the case could shape future rules for automated recruitment. A ruling in favor of the plaintiffs could require companies to be more open about how AI is used in hiring and give applicants access to the data and judgments made about them.

As technology quietly takes on a greater role in deciding who gets hired, the lawsuit raises a basic question that many job seekers are beginning to ask. Who is evaluating us, and on what basis.

Sources:
Reuters

Bloomberg Law