Automated screening promised faster, fairer hiring. In practice, it is quietly throwing away qualified people, and the legal bill for that is starting to arrive.
Somewhere in your applicant tracking system right now is a person who could do the job you are struggling to fill. They applied. They were never seen by a human being. A piece of software decided in seconds that they did not fit, and nobody at your company will ever know their name.
I run a staffing firm. My business depends on finding people other employers missed, and I can tell you that more of them are being missed by machines than by managers.
How good candidates disappear
Most screening tools work by matching. They compare a resume against a job description and a set of rules, then score, rank, or reject. The problem is that the rules are rarely as smart as the people who wrote them think they are.
A six-month gap on a resume gets penalized, even if the gap was spent caring for a parent. A candidate who ran a warehouse floor for eight years gets filtered out because the posting asked for a bachelor's degree the role never needed. A forklift operator with every certification in hand loses points because he called himself a "material handler." None of these filters are malicious. All of them cost you people.
This is not a new observation. Researchers at Harvard Business School documented the scale of it years ago in their Hidden Workers report, which found that automated hiring systems routinely screened out candidates who could have done the work. What has changed is that employers have layered more automation on top of the same flawed logic, and courts are starting to pay attention.
The legal ground is moving
The most closely watched case is Mobley v. Workday, a lawsuit alleging that AI-driven screening tools discriminated against older, Black, and disabled applicants. In June, a federal judge in California largely denied Workday's latest motion to dismiss, allowing core claims to proceed. Those are allegations, not findings. But the case has already established something every employer should absorb: the software you buy can be treated as acting on your behalf.
Some employers have taken comfort in the fact that federal enforcement has shifted. The EEOC has stepped back from disparate impact cases since an April 2025 executive order directed agencies to deprioritize them. I think that comfort is misplaced. Private plaintiffs can still sue, and states like California have their own rules. In California, the Civil Rights Council has adopted regulations addressing automated decision systems in employment.
What I tell employers
I am not against technology in hiring. We use it. When you are processing thousands of applications for high-volume roles, some automation is necessary. But there is a difference between using software to organize a pile and using it to make the decision.
Here is what I recommend to the companies we work with.
Know what your tools are doing. Ask your vendor exactly which features score or reject candidates, and on what basis. If they cannot explain it clearly, that is your answer.
Audit your rejections. Pull a sample of candidates your system screened out and have an experienced recruiter review them by hand. If that recruiter keeps finding people worth a phone call, your filters are too tight.
Rewrite job descriptions for the job. Most postings are padded with requirements nobody enforces once someone is hired. Every unnecessary requirement becomes a rule the software applies without judgment.
Keep a human in the loop for rejections. Let software sort and prioritize. Do not let it close the door on someone without a person ever looking.
The real cost
Legal exposure gets the headlines, but it is not the biggest cost. The biggest cost is the one you never see: the reliable, experienced worker who would have stayed five years, who instead went to work for a competitor whose hiring process let a human read the application.
Employers keep telling me they cannot find good people. Many of them already did. Their software just threw the applications away.
About Adam Kidan
Adam Kidan is the President of Empire Workforce Solutions, a staffing and workforce solutions firm based in Ontario, California. He writes about hiring, retention, and the changing relationship between employers and workers. Learn more at adamkidan.co.
