"Customers are seeing value from Workday AI, says CEO Carl Eschenbach": Highlight Workday's centralized control over its AI systems

In the article titled "Customers are seeing value from Workday AI, says CEO Carl Eschenbach", several statements by CEO Carl Eschenbach highlight Workday's centralized control over its AI systems.. Key points include:

1. Standardized AI Deployment Across Customers: Eschenbach highlights that Workday's AI capabilities are integrated into the core platform and delivered uniformly to all customers. This uniformity suggests that any inherent biases in the AI systems could systematically affect all users.

2. Emphasis on AI-Driven Decision Making: Eschenbach discusses the increasing reliance on AI for decision-making processes within Workday's platform. If these AI-driven decisions are based on flawed algorithms, they could result in discriminatory outcomes they could result in discriminatory outcomes across the customer base.

3. Centralized Control Over AI Features: The article notes that Workday maintains centralized control over its AI features, including updates and configurations. This centralization implies that individual customers have limited ability to modify or audit the AI tools, potentially leading to widespread, unmitigated biases.

4. Lack of Transparency in AI Operations: The article points out that there is limited transparency regarding how Workday's AI systems operate, which can hinder customers' ability to identify and correct potential biases.

   Key Statements Indicating Centralized Control

   1. Integration of AI into Core Platform:

      "Our customers are leaning into us with a core platform that already has a whole bunch of AI built into it. It’s not bolted on."

      This suggests that AI functionalities are embedded within Workday's primary systems, not as optional add-ons, indicating uniform deployment across clients.

   2. Standardized AI Capabilities Across Clients:

      "We now have more than 70 million users under contract conducting more than 800 billion transactions on the Workday platform annually."

      The vast number of users and transactions implies that any AI tools, including those used in hiring, are consistently applied across a broad user base.

   3. Centralized Data Utilization for AI:

      "Workday AI is fueled by the quality and quantity of our data set and Workday’s understanding of our customers’ HR and finance processes."

   This indicates that Workday leverages aggregated data from its clients to train and refine its AI models centrally.

Centralized Control and Liability

DEREK MOBLEY v. WORKDAY INC (2024)

The centralized control that Workday exercises over its AI-driven hiring tools has significant implications for liability in the ongoing class action lawsuit, Mobley v. Workday. The court's analysis and findings provide a framework for understanding how this centralization can lead to legal responsibility under anti-discrimination laws.

In the case, the court examined whether Workday could be held liable as an "agent" of its employer-clients under federal anti-discrimination statutes. The court found that:

"Workday's customers delegate traditional hiring functions, including rejecting applicants, to the algorithmic decision-making tools provided by Workday."

This delegation implies that Workday's AI tools are not merely passive instruments but active participants in employment decisions. The court noted:

"Workday's software is not simply implementing in a rote way the criteria that employers set forth, but is instead participating in the decision-making process by recommending some candidates to move forward and rejecting others."

Such participation indicates that Workday's centralized AI systems are performing functions traditionally reserved for human decision-makers within hiring processes.

Legal Implications

The court emphasized that accepting Workday's argument—that it is merely a software provider—would create a loophole in anti-discrimination laws:

"Accepting Workday's argument... would allow companies to escape liability for hiring decisions by saying that function has been handed over to someone else (or here, artificial intelligence)."

To prevent such an outcome, the court applied the agency theory, stating:

"A third-party agent may be liable as an employer where the agent has been delegated functions traditionally exercised by an employer."

This reasoning underscores that when a company like Workday centrally controls AI tools that perform essential hiring functions, it can be held liable for any discriminatory outcomes resulting from those tools.