Meta employees sue over alleged AI role in layoffs

A group of current and former Meta employees is suing the company over allegations that artificial intelligence played a discriminatory role in selecting workers for layoffs. For Meta investors, the case adds a legal-risk angle to the company’s broader AI push: tools built to measure work can become a liability if courts find they penalize protected leave or disability-related accommodations.

The complaint, filed Monday in the U.S. District Court for the Northern District of California, was brought by attorneys for 26 unnamed workers. The plaintiffs say they were part of the 10% of Meta’s workforce cut during the company’s May layoff round, according to the legal filing.

The workers allege Meta violated laws covering protected leave and discrimination tied to pregnancy, disability and other categories. They are seeking to pursue their claims individually in arbitration, according to the complaint.

What the employees allege

The central claim is that Meta used a set of internal AI systems to help decide who would lose their jobs, and that those systems did not properly account for approved time away from work.

In the filing, the employees’ attorneys said Meta’s internal AI tools relied on inputs such as performance ratings, calibration scores, productivity measures, output metrics, “AI-native” ratings and AI-token consumption. In AI systems, a token is a unit of text or data processed by a model, so token consumption can be used as a rough measure of how much someone uses AI tools.

The plaintiffs argue those measures can disadvantage employees who are on medical or family leave, or whose work output is affected by a disability, because they may have fewer opportunities to generate the same activity data as colleagues who are actively working full schedules.

The complaint says the disputed metrics became part of the layoff process and that lower readings for workers on leave were used against them. Courthouse News Service previously reported on the lawsuit.

Meta denies the claims

A Meta spokesperson told CNBC by email that the “claims lack merit and are not based on facts.”

“Workforce management and organizational decisions were and are made by people, not AI,” the spokesperson said in the statement to CNBC.

The employees are asking the court for a preliminary injunction that would preserve their employment status at Meta while an independent audit reviews the allegedly algorithm-assisted selection process and while their arbitration claims are resolved, according to the complaint.

AI hiring and firing tools face more scrutiny

The Meta lawsuit arrives shortly after a separate court development involving Workday, the enterprise software company. In June, a federal judge in California ruled that Workday must face claims that its AI-powered job-screening services allegedly violated state and federal anti-discrimination laws, according to CNBC.

Workday denied those allegations at the time. The company said its recruiting software does not make hiring decisions “in California or anywhere else,” and that its technology evaluates job qualifications rather than protected traits such as race, age or disability.

For public companies, AI is now tied to both growth plans and operating efficiency. These lawsuits show another side of that shift: when companies use automated tools in employment decisions, workers may challenge not only the outcome, but also the data and scoring systems behind it.

This story draws on original reporting from CNBC.