Can AI Hiring Tools Get You Sued? EEOC Basics in Plain English

AI is being used to scan resumes, rank candidates, and even run video interviews. But when these tools discriminate, the company—not the AI vendor—usually takes the heat.

Why bias in AI hiring matters

• The EEOC (Equal Employment Opportunity Commission) enforces U.S. anti-discrimination laws in hiring.
• If an AI system unfairly screens out candidates based on gender, race, age, disability, or other protected traits → your business can be liable.
• The fact that a vendor "provided the AI" rarely shields the employer. Courts usually treat the employer as responsible.

Common risk scenarios

1. Resume filtering bias – An algorithm trained on past "successful" hires may favor certain demographics.
2. Video interview AI – Tools that score facial expressions or voice tone risk disability or racial discrimination claims.
3. Automated rejection emails – If AI screens someone out improperly, they may never even get a human review → higher liability exposure.

What the EEOC says

The EEOC has published guidance: employers must audit and monitor AI tools to ensure they don't have a disparate impact on protected groups. "The vendor made us do it" is not a defense.

Insurance coverage

• Employment Practices Liability Insurance (EPLI) may cover discrimination claims, but coverage for AI-driven bias is untested.
• Cyber liability policies generally don't cover employment discrimination — see what's actually covered.
• Employers should ask insurers if EPLI endorsements for "AI-driven discrimination" exist. Start with our 5 key questions for insurers.

Checklist: safer AI hiring

1. Ask vendors for bias audit results or independent testing reports.
2. Offer candidates reasonable accommodations (alternative application methods).
3. Keep a human-in-the-loop for final hiring decisions.
4. Review your EPLI coverage for AI-related claims. Similar bias issues can occur in finance and lending.