The Equal Employment Opportunity Commission last week settled its first-ever lawsuit involving alleged age discrimination through the use of artificial intelligence tools in the hiring process. The result was a $365,000 settlement by the company involved, according to Bloomberg Law.

The company involved was a tutoring firm, but senior living and care providers who use AI in the hiring process will want to take note.

According to the consent decree, filed Aug. 9, the iTutor Group had programmed its application software to automatically reject female applicants aged more than 55 years and male applicants aged more than 60. In May 2022 when the EEOC sued, the agency said that more than 200 older applicants had been automatically rejected.

More than a year ago, the EEOC and the Justice Department released a technical assistance document regarding disability discrimination when employers use artificial intelligence and other software tools to make employment decisions. Now, age discrimination is under scrutiny as well.

“Obviously, the EEOC has been the primary regulatory body dealing with bias and discrimination in employment decisions. They’ve been working on these topics for a long time. In fact, there’s some stuff that’s just basic,” Arena Analytics Founder and Board Chair Michael Rosenbaum told the McKnight’s Business Daily.

“There’s bias that’s obvious, right, which is like, you can’t set up rules that exclude people based on any number of factors. I mean, that’s just a bright-line rule,” he said. “As a human interaction, you can’t say, I’m not gonna hire you because of your age, or your gender, or your race, or your ethnicity.”

Sometimes bias is unintentional in the AI parameters, he noted, but you can’t just set the program to toss out the applications of a specific group for whatever reason.

The company’s predictive analytics and artificial intelligence platform has been used by several senior living providers. McLean, VA-based Sunrise Senior Living, for instance, has used the platform to help improve its employee retention rates. And Benchmark Senior Living of Waltham, MA, announced in 2018 that it was turning to AI to recruit and retain workers.

Marion, OH-based United Church Homes signed on with the Baltimore-based firm last year to aid in the sourcing of staff members for various job categories, but a spokeswoman for the company told the McKnight’s Business Daily that the contract expired in July.

Arena also previously reported that The Arbor Company, Asbury Communities, HCF Management, Heritage Senior Living and Senior Living Communities were among its clients.

Arena, which uses techniques to predict the likelihood a candidate will be stay once hired. Rosenbaum noted that there is “a complicated set of rules that essentially compare the acceptance rate of applicants you have in the group that’s most likely to be accepted into a job compared to the group that is least likely to be accepted into the job. And if the difference between those groups is more than four-fifths — it’s called the four-fifths rule — then you have a set of issues with the EEOC.”

In using AI-powered tools properly, Rosenbaum said, “beyond complying with EEOC rules, you actually have the workforce you want and you have a moral and effective hiring and promotion process.”

Attorneys at Fisher Phillips said that they expect to see more, similar discrimination lawsuits in the future because AI-powered tools are becoming increasingly popular in the hiring process. Approximately 79% to 85% of employers now use some form of AI in recruiting and hiring, according to the law firm.

Fisher Phillips attorneys Raeann Burgo and Wendy Hughes suggested the following strategies to ensure fair use of AI-powered tools and avoid discrimination lawsuits: 

  • Test your AI tools, using diverse data sets, before you put them into action.
  • Periodically review your tools to ensure that they remain compliant.
  • Conduct bias audits, which are required in some jurisdictions.
  • Keep the human resources team up to date on applying and interpreting AI protocols.
  • Establish clear policies regarding AI tools

Importantly, according to Burgo and Hughes, keep humans involved in your hiring process.

“To the extent that you are incorporating AI technology to supplement and support your HR efforts, you need to make sure you retain a healthy dose of human judgment in your workplace decision-making,” they said.