Twenty-six Meta employees have sued the company for allegedly using AI systems to disproportionately select workers with disabilities or medical leave for elimination in its May layoff of nearly 8,000 people.
The lawsuit, the first of its kind against a major U.S. company, claims Meta violated federal and state anti-discrimination laws and failed to test its AI systems for bias as required by California and New York City law.
Meta denies the allegations, stating that workforce decisions were made by people, not AI.
What happened
Twenty-six Meta employees filed a federal lawsuit in Oakland, California, claiming the company used AI-powered systems to disproportionately target people with disabilities or who took medical leave when it cut 10% of its global workforce—nearly 8,000 people—in May. The lawsuit says Meta relied on factors such as productivity and AI token usage in selecting workers for elimination, with layoffs set to begin July 22.
Why it matters
The lawsuit appears to be the first against a major U.S. company to challenge the alleged use of AI in conducting layoffs. The workers claim Meta violated federal and state laws banning discrimination against employees with disabilities, those on medical leave, or pregnant workers, and also failed to test its AI systems for bias as required by recently adopted California and New York City laws. Meta denies the claims, saying workforce decisions were made by people, not AI.
What to watch
The plaintiffs are seeking a preliminary court ruling to block Meta from completing the layoffs while they pursue their claims in private arbitration. The case names several internal AI systems Meta allegedly used to score and rank employees, including Metamate (a large language model assistant), an employee-trained "second brain" that tracked workers' communications and documents, and a productivity score drawn from scanning keystrokes, screen content, emails and browser history.
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Meta's May layoff of nearly 8,000 employees—10% of its global workforce—has now become the subject of a novel legal challenge that may set a precedent for AI use in corporate decisions. The lawsuit marks a significant moment in the regulatory scrutiny of AI in hiring and employment, coming as California and New York City have recently adopted laws requiring companies to test AI systems for bias. The plaintiffs' allegation that Meta's AI-assisted scoring systems—including Metamate and keystroke-monitoring tools—disproportionately disadvantaged workers with disabilities or medical absences touches on a core tension in AI deployment: even systems designed to optimize for productivity metrics can embed or amplify discrimination against protected groups. Meta's response—that people, not AI, made final workforce decisions—does not directly address whether the AI systems' outputs biased human judgment. The case occurs as Meta CEO Mark Zuckerberg has refocused the company toward AI investments and AI agents, making employment practices a visible test of how the company integrates AI into sensitive decisions.
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