Mobley v. Workday: March 2026 Order Reaffirms ADEA Applicant Coverage and Vendor Agency Status Post-Chevron

In the closely watched lawsuit Derek L. Mobley v. Workday, Inc. (Case No. 3:23-cv-00770-RFL, N.D. Cal.), Judge Rita F. Lin issued a critical, split ruling on March 6, 2026, on Workday's motion to dismiss. The decision marks a pivotal moment in establishing how traditional civil rights statutes apply to modern AI-driven recruiting software.

The court's ruling delivered a major victory to the plaintiffs by rejecting Workday's argument that the Age Discrimination in Employment Act (ADEA) does not allow job applicants to bring disparate impact claims. Workday had argued that the Supreme Court's landmark 2024 decision in Loper Bright Enterprises v. Raimondo (which ended Chevron deference) should invalidate prior district court precedent on this issue. However, Judge Lin held that Loper Bright was inapplicable because the prior precedent did not rely on Chevron, and that the EEOC's longstanding interpretation that the ADEA covers job applicants remains highly persuasive under Skidmore deference.

The ruling cements the case's progress toward discovery and potential trial, following the court's 2025 preliminary certification of a nationwide age-discrimination collective action.

Key Elements of the March 6, 2026 Order

• ADEA Disparate Impact Allowed: The court firmly established that job applicants are protected under the ADEA from automated hiring filters that have a disparate impact on older workers.
• Persuasiveness of EEOC Guidance: The court confirmed that Loper Bright does not prevent courts from adopting well-reasoned agency interpretations. Under Skidmore v. Swift & Co., the EEOC’s position that the ADEA applies to applicants was deemed legally sound and persuasive.
• Dismissal of Weak Physical Disability Claims: In a partial win for Workday, the court dismissed the ADA (disability) claim of one plaintiff who has cancer and asthma. The court noted that the complaint failed to allege facts showing how Workday's automated screening tools could detect or discriminate against physical disabilities like cancer or asthma. However, the dismissal was granted with leave to amend.
• Dismissal of Extraterritorial Claims: The court dismissed California state-law (FEHA) claims brought by non-California plaintiffs due to a lack of factual allegations tying their applications to California, also with leave to amend.
• Amended Complaint Filed: On March 27, 2026, the plaintiffs submitted an amended complaint addressing these specific deficiencies, re-alleging the physical disability and state-law claims with additional factual details.

Verbatim Quotes

"Plaintiffs in a closely watched lawsuit against HR vendor Workday may bring disparate-impact age discrimination claims under the Age Discrimination in Employment Act, a federal judge held Friday, rejecting an argument previously advanced by Workday. [...] Lin also held that prior district court precedent affirming the ADEA’s coverage of applicants was not disturbed by the end of Chevron deference." — HR Dive, March 2026 Update

"This is going to be an argument we see a lot—that AI can extract information from the data it has, combine it with other information it has, and can discriminate based on stuff a job applicant never said. It didn’t work this time, but it will with different facts. [...] So monitor and audit your hiring outcomes by protected classes." — Heather Bussing, HRExaminer

Compliance Takeaways for Employers and AI Vendors

The Mobley litigation establishes that third-party software vendors who design and control automated screening tools can be held liable as "agents" of employers. This means employers cannot escape liability simply by outsourcing screening to an AI vendor, and vendors cannot escape liability by claiming they are not the direct "employer."

Furthermore, this litigation is progressing even as the executive branch deprioritizes federal enforcement of disparate impact claims. Under Executive Order 14281 (issued April 23, 2025), federal agencies were directed to reduce disparate impact enforcement, prompting the EEOC to deprioritize these cases. However, Mobley demonstrates that individual class-action litigants remain fully empowered to enforce these theories in federal court, making independent audits and bias testing essential for all enterprise deployers.