Two job seekers filed a federal class-action lawsuit Tuesday against AI hiring platform Eightfold, alleging that the company uses hidden artificial intelligence to secretly score applicants without their knowledge or consent, thereby violating consumer protection laws enacted in the 1970s.

The complaint, filed in California's Contra Costa County Superior Court, alleges that Eightfold violated the Fair Credit Reporting Act and California's Investigative Consumer Reporting Agencies Act by assembling consumer reports on job applicants without providing required disclosures or dispute rights.

Plaintiffs Erin Kistler and Sruti Bhaumik claim Eightfold's platform collects sensitive personal data, including social media profiles, location data, internet activity, and tracking cookies, from public sources like LinkedIn, GitHub, and job boards to evaluate candidates applying to companies including Microsoft, PayPal, Starbucks, and Morgan Stanley.

The plaintiffs seek actual and statutory damages between $100 and $1,000 per violation under federal law, plus up to $10,000 per violation under California law, along with punitive damages and injunctive relief requiring Eightfold to change its practices.

The lawsuit alleges that Eightfold's AI uses "more than 1.5 billion global data points" to generate "Match Scores" that rank applicants from 0 to 5 based on their "likelihood of success," with lower-ranked candidates often "discarded before a human being ever looks at their application."

Kistler, a computer science graduate with 19 years of product management experience, applied for senior PayPal roles via Eightfold in December without landing an interview, while Bhaumik, a project manager with degrees from Bryn Mawr and the University of Pittsburgh, was automatically rejected from a Microsoft role two days after applying.



The lawsuit claims that nearly two-thirds of large companies now use AI technology like Eightfold's to screen candidates, while 38% deploy AI software to match and rank applicants.

"This case is about a dystopian AI-driven marketplace, where robots operating behind the scenes are making decisions about the most important things in our lives: whether we get a job or housing or healthcare," David Seligman, Executive Director at Towards Justice and one of the attorneys representing the plaintiffs, tweeted.

"There is no AI exemption to the law—no matter how fancy-sounding the tech or how much venture capital is behind it,” he noted.

The complaint alleges that Eightfold's proprietary Large Language Model incorporates data on "more than 1 million job titles, 1 million skills, and the profiles of more than 1 billion people working in every job, profession, [and] industry," plus "inferences drawn" to create profiles reflecting applicants' "preferences, characteristics, predispositions, behavior, attitudes, intelligence, abilities, and aptitudes."

During the application process, neither plaintiff received a standalone disclosure that consumer reports would be generated, nor did they receive summaries of their consumer protection rights or information about Eightfold's role as a consumer reporting agency, the lawsuit alleges.

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