AI Battle Headlines Workplace Bias Cases To Watch In 2026

A worker's pioneering discrimination lawsuit over Workday's artificial intelligence-powered hiring tools is poised to shed light in the new year on the murky liability issues arising when high-tech software is deployed in workplaces.

Here, Law360 looks at this and other employment discrimination cases worth watching in 2026.

Workday Fight Set to Have "Great Impact"

Significant rulings may come down in 2026 in a cutting-edge lawsuit lodged by job candidate Derek Mobley, who alleges that applicant screening software made by Workday and deployed by companies dictates which resumes are passed on, and disfavors certain categories of candidates.

Mobley, who filed his proposed class suit in 2023 and has degrees and experience in finance and information technology, said he applied for more than 100 jobs since 2017 that used the Workday platform and was rejected from each one.

He's Black, above 40, and disabled, and he alleged these characteristics were what repeatedly knocked him out of the running. Mobley said Workday's system, not the prospective employer, made early decisions on his applications, and automation was evidenced by the short turnaround times on the rejections he received and the odd, middle-of-the-night hours they hit his inbox.

Mobley sued under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act and the Americans with Disabilities Act. He has said that Workday fits underneath some categories in these federal laws designed to capture less typical players in the employment sphere that still have some power over workers' opportunities.

Workday has argued that it's not subject to federal employment laws in this context because there's no evidence its program procures applicants.

The use of AI for workplace operations has exploded in recent years, but it's still an open question if technology developers can be held accountable under federal laws governing employers if their products yield biased results.

Mobley's case could offer early answers. Last year, a California federal judge cleared the lawsuit to head into the fact-finding stage, finding it was plausible that employment bias laws could stretch to reach the software vendor.

Management-side attorney Brent D. Hockaday, a partner at K&L Gates, said beyond the specific facts in Mobley's case, the case could offer some clarity on the interplay between decades-old civil rights statutes and the high-tech tools employers are increasingly using.

"We're determining how we're fitting these 30- to 60-year-old employment statutes in the modern workplace," Hockaday said. "2026 is going to be a pretty important year in this case, because you'll have some early decisions on these questions."

"This case could have a great impact on how employers conduct business generally," Hockaday said.

The case is Derek Mobley et al. v. Workday Inc., case number 3:23-cv-00770, in the U.S. District Court for the Northern District of California.

EEOC Pumping Break Suit at the Fore

A U.S. Equal Employment Opportunity Commission lawsuit over a security officer's denied lactation-related accommodation requests is one of the front-running cases on the Pregnant Workers Fairness Act, and could create some early case law on PWFA compliance, experts said.

The PWFA, signed by President Joe Biden in December 2022, requires employers to offer job-related adjustments — such as the ability to sit, carry a water bottle, take breaks or time off — to workers who are pregnant or have pregnancy-related conditions. It went into effect in mid-2023.

The EEOC has been at the forefront of the PWFA litigation, so far filing a dozen lawsuits under the law. But the PWFA case law is still in its infancy. Three of the EEOC cases settled and eight are in the earliest phases, with no substantive briefings completed or rulings handed down.

One early decision has come down, however, in a D.C. federal case the commission filed in January. The EEOC alleged that Security Assurance Management gave its former employee Simone Cooper the runaround as she repeatedly asked for a late-morning break and a proper, private location to pump her breast milk, resulting in her leaking through her shirt at least twice on the job.

The company directed her one time to a room that other security employees could access anytime — she found men's clothes hanging in the bathroom — and another time sent her in the direction of a room that didn't actually exist, the EEOC said. To manage, Cooper was forced to call out of work, resulting in penalties, or pump in her car, according to the agency's complaint.

The security company asked the court in March to trim some of the allegations in the EEOC suit, alleging they were duplicative, but U.S. District Judge Rudolph Contreras refused in an October ruling.

Cooper brought five claims under the PWFA: failure to accommodate, adverse action on account of requesting an accommodation, denial of employment opportunities based on her request, retaliation and interference with her statutory rights.

Security Assurance said the adverse action, denial of employment opportunities and interference claims need to be thrown out because they're premised on all the same alleged misconduct.

Judge Contreras rejected those arguments, finding the claims are rooted in the company's purported differing motivations and premised on different legal standards.

Hockaday, of K&L Gates, said this decision may sketch out some rules for what kinds of claims can be brought under the PWFA.

"If this is allowed to go forward, and there's precedent here, it could effectively create five causes of action under the PWFA," he said. "Instead of getting three shots, you now have five."

Generally, experts added that they're getting a lot of calls on the PWFA. Any court input is welcome, said Jenna M. Lakamp, a senior associate at Armstrong Teasdale who represents employers.

"The PWFA is certainly tripping employers up right now," Lakamp said.

The case is U.S. Equal Employment Opportunity Commission v. Security Assurance Management Inc., case number 1:25-cv-00181, in the U.S. District Court for the District of Columbia.

Eyes on Starbucks' DEI Fights

Workplace diversity, equity and inclusion initiatives have become legally fraught in light of the Trump administration's hostility toward these programs, and experts told Law360 they're keeping a close eye on the rising tide of litigation over DEI policies.

One such case was filed by Florida Attorney General James Uthmeier in December, as he sued coffee giant Starbucks Corp. in state court claiming its DEI policies "cross the line into illegal, race-based quotas."

In its 21-page complaint, filed Dec. 10, Florida claimed Starbucks has "excluded or disfavored nonminorities in numerous employment practices and programs" over the past five years, allegedly setting "racial quotas and goals for hiring" as well as paying employees different wages based on their race.

The company also rewarded executives for boosting participation in "race-based mentorship programs" and "race-based retention rates of employees," Uthmeier's office alleged, and it excluded "people of disfavored races" from networking and mentorship.

The suit at one point describes "disfavored races" as "white people" and in some circumstances "multiracial and Asian people."

A Starbucks spokesperson told Law360 that the company disagrees that its policies are discriminatory and that its programs and benefits "are open to everyone and lawful."

Missouri's attorney general lodged similar accusations against Starbucks in February, claiming in federal court that the company's hiring practices violate state and federal anti-discrimination laws.

Starbucks has moved to dismiss what it called Missouri's "defective" suit, saying the state lacks jurisdiction because there's no evidence the company's policies caused actual harm to residents.

Tom Spiggle, a former prosecutor and founder of The Spiggle Law Firm, a worker-side employment firm, said the litigation over DEI will force courts to weigh in on what programs are aboveboard, including aspirational programs or affinity groups.

"It will be helpful for companies and for plaintiffs to see where courts start to draw the line on this," Spiggle said.

The Florida case is Office of the Florida Attorney General v. Starbucks Coffee Co., case number 2025-CA-000653, in the Tenth Judicial Circuit Court of the State of Florida. The Missouri case is State of Missouri v. Starbucks Corp., case number 4:25-cv-00165, in U.S. District Court for the Eastern District of Missouri.

EEOC Under Scrutiny in Battle Over LGBTQ+ Pivot

The EEOC has drawn legal heat this past year for the dramatic policy reversals it has undertaken under President Donald Trump's second administration. Among the pivots facing staunch pushback, the EEOC has scaled back its enforcement against LGBTQ+ discrimination.

Under the leadership of Chair Andrea Lucas, who Trump placed at the agency's helm in January, the EEOC dropped its entire docket of lawsuits alleging transgender discrimination, deprioritized the processing of charges involving LGBTQ+ bias and scrubbed its online resources on LGBTQ+ employee protections, among other changes.

FreeState Justice, a social justice organization in Baltimore that provides legal services, outreach and education, sued the EEOC in Maryland federal court in July over this suite of actions.

FreeState said the agency's retreat on the issue contravenes the U.S. Supreme Court's 2020 decision in Bostock v. Clayton County , in which the justices said Title VII of the Civil Rights Act prohibits discrimination based on sexual orientation and gender identity.

Congress originally established the EEOC to enforce Title VII, and it remains among the laws the commission is tasked with implementing.

In addition to bucking Title VII, the denial of services to a specific subset of workers, FreeState said, contravenes the constitutional right to equal protection, as well as the Administrative Procedure Act, a federal law establishing the process government agencies must follow before carrying out certain formal actions.

The EEOC asked the court to throw out the case in October, arguing it has discretion on how it enforces anti-discrimination law, and how it carries out that function is "generally insulated from judicial review."

FreeState responded in November that its current posture is a "derogation" of its "congressional command," and the agency's investigative discretion "does not encompass blanket refusal to investigate certain charges."

Worker-side attorney Spiggle said this is a "huge" case to watch, because it raises questions about the extent of the EEOC's authority.

"What does this mean for Title VII? If they decide in the favor of the EEOC, what does that mean for other types of protected cases?" Spiggle said. "It has a lot to say about Title VII, it has a lot to say about EEOC priorities."

The case is FreeState Justice v. Equal Employment Opportunity Commission et al., case number 1:25-cv-02482, in the U.S. District Court for the District of Maryland.

--Additional reporting by Patrick Hoff, Braden Campbell, Ben Adlin and Emmy Freedman. Editing by Amy Rowe and Leah Bennett. 

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