Eightfold AI recruitment start-up accused of "secret" job scoring
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Occurred: 2025-
Page published: January 2026
A proposed class-action lawsuit filed in California accuses Eightfold AI of secretly scoring job applicants using personal data and generating employment “consumer reports” without notice, consent, or disclosure, potentially violating U.S. consumer protection laws.
What happened
What happened
Job applicants Erin Kistler and Sruti Bhaumik filed a federal class-action lawsuit in California against Eightfold AI, a recruitment platform used by companies like Microsoft, PayPal, and the U.S. Department of Defense.
The core of the complaint alleges that Eightfold uses hidden AI to collect sensitive information and assign "Match Scores" (ranging from 0 to 5) to applicants. These scores, based on over 1.5 billion data points, supposedly predict a candidate's "likelihood of success."
The lawsuit claims Eightfold acts as a modern-day background check company but operates in total secrecy, and that its practices amount to creating consumer credit reports under the Fair Credit Reporting Act (FCRA) and, in some cases, relevant California consumer reporting laws, but without providing legally required disclosures, consent mechanisms, access or dispute rights.
Highly qualified candidates, including the plaintiffs with decades of experience, allege they were "discarded before a human being ever looks at their application." The suit claims the system uses "tracking cookies, internet activity, and location data" to infer personality traits like being an "introvert" or "team player," potentially based on inaccurate or misinterpreted data that candidates cannot see or correct.
Why it happened
Why it happened
The incident stems from a critical accountability gap in how AI vendors position themselves.
For years, AI hiring firms have operated under the assumption of an "AI exemption," viewing their tools as internal productivity software rather than consumer reports.
Eightfold’s proprietary algorithms are "black boxes." While the company claims they use only candidate-provided data, the plaintiffs argue the system pulls from external sources like LinkedIn and GitHub to create "secret dossiers."
Eightfold denies "scraping" social media and asserts that they are committed to responsible AI. However, the lack of a formal process for candidates to dispute or even view their scores has created a environment where errors in the AI’s "inferences" remain unchallenged.
What it means
What it means
For candidates: The lawsuit represents a push for the right to "algorithmic transparency." If successful, job seekers could gain the right to view their AI-generated scores and challenge incorrect data, similar to how one disputes a credit score.
For employers: Companies using these tools may now face "vicarious liability." They can no longer outsource the ethical risks of hiring to a third-party vendor without ensuring the tool complies with decades-old consumer protection laws such as the FCRA.
For society: This may prove a pivotal moment in the fight against "dystopian" automated decision-making. It challenges the idea that technology can operate behind the scenes to gatekeep life-altering opportunities such as employment without democratic or legal oversight.
System 🤖
System 🤖
Eightfold Match Score
Documents 📃
Documents 📃
Developer: Eightfold
Country: USA
Sector: Business/professional services
Purpose: Rank applicant job fit, success likelihood
Technology: Machine learning; Prediction algorithm
Issue: Accountability; Fairness; Privacy; Transparency
90Timetable ⏰
90Timetable ⏰
Early 2024. The CFPB issues a circular stating that AI companies generating "algorithmic scores" for employers may be classified as Consumer Reporting Agencies
May 2025. The Trump administration rescinds the 2024 CFPB guidance, creating a legal "gray area" regarding the accountability of AI hiring vendors
Late 2025. Plaintiffs Erin Kistler and Sruti Bhaumik apply to PayPal and Microsoft via Eightfold-powered portals and receive automated rejections
January 2026. Kistler v. Eightfold AI is filed in California
January 20, 2026. Legal experts note that Eightfold’s practices likely breach the newly enforced transparency requirements of the EU Artificial Intelligence Act
Regulation ⚖️
Regulation ⚖️
Fair Credit Reporting Act
Legal, regulatory 👩🏼⚖️
Legal, regulatory 👩🏼⚖️
Kistler et al. v. Eightfold AI Inc
AIAAIC Repository ID: AIAAIC2185
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