Eightfold AI and the Class-Action Lawsuit

Eightfold AI, a recruitment platform based in Silicon Valley and supported by SoftBank Vision Fund and General Catalyst, is currently facing a proposed class-action lawsuit. The lawsuit claims that the company secretly evaluates job candidates, potentially breaching US consumer protection regulations.

Details of the Lawsuit

The legal action, initiated on January 21 in California, was filed by candidates Erin Kistler and Sruti Bhaumik. They assert that Eightfold compiles extensive talent profiles, which include personality analyses and fit scores that qualify as consumer reports under the Fair Credit Reporting Act (FCRA).

Implications for Job Seekers

The lawsuit contends that since Eightfold allegedly fails to inform candidates or provide access to their profiles, job seekers are stripped of their right to contest inaccuracies that could influence their job opportunities.

Fair Credit Reporting Act Compliance

As per the FCRA, any companies offering consumer reports for employment reasons are obligated to inform individuals and permit them to review and contest any mistakes.

Influence on Hiring Practices

According to a report by Reuters, the plaintiffs allege that Eightfold’s evaluations impact hiring decisions at major companies, essentially positioning Eightfold as a credit reporting agency without fulfilling the necessary regulatory responsibilities associated with that status.

Company Background

Eightfold was co-founded by Ashutosh Garg and Varun Kacholia, both of whom are graduates of the Indian Institute of Technology. Garg, serving as the chief executive officer, previously held research positions at Google and IBM. Meanwhile, Kacholia, the chief technology officer, was an engineering director for Facebook’s News Feed prior to founding Eightfold in 2016.

Global Operations and Partnerships

The organisation has a significant presence in India, with its Noida-based Global Centre of Excellence acting as a key development and operational centre. Eightfold’s Indian clients include a partnership with TCS established in 2021 and a collaboration with Wipro set for 2024.

Clientele

Eightfold’s client base includes multiple Fortune 500 companies like Microsoft and PayPal. The platform is marketed as a tool that helps employers streamline the hiring process by analysing extensive data from resumes and job postings to assess candidate compatibility.

Company’s Position on the Allegations

An Eightfold spokesperson stated that the firm operates transparently. It was emphasised that the company does not scrape data from social media platforms. The spokesperson, Kurt Foeller, as reported by Reuters, reiterated their commitment to responsible AI practices and adherence to relevant data protection and employment legislation. He added that the platform functions based on data that candidates willingly share or that customers provide.

Regulatory Considerations

The lawsuit appears against a backdrop where regulators and consumer advocates are diligently striving to apply established consumer protection standards to contemporary AI-based decision-making systems. This is particularly pertinent in sectors such as hiring, lending, and housing, where algorithmic biases and unclear scoring methods have come under increased scrutiny.

Current Legal Status

As of now, Eightfold has yet to submit a formal response in court.