Adam S. Forman, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Detroit and Chicago offices, was quoted in the Bloomberg BNA Daily Labor Report, in “AI Hiring Could Mean Robot Discrimination Will Head to Courts,” by Chris Opfer.

Following is an excerpt:

As companies turn to artificial intelligence for help making hiring and promotion decisions, contract negotiations between employers and vendors selling algorithms are being dominated by an untested legal question: Who’s liable when a robot discriminates?

The predictive strength of any algorithm is based at least in part on the information it is fed by human sources. That comes with concerns the technology could perpetuate existing biases, whether it is against people applying for jobs, home loans, or unemployment insurance.

Contract talks between vendors who market artificial intelligence services and businesses looking to use algorithms to streamline recruitment are inherently tense. That’s because of the uncharted legal territory created by the adoption of artificial intelligence to perform business functions normally performed by humans. …

Both sides want to avoid the cost of being a party to a potentially drawn-out, precedent-setting case. The Equal Employment Opportunity Commission is already investigating at least two cases involving claims that algorithms unlawfully exclude certain groups of workers during the recruitment process, and seven attorneys told Bloomberg Law it’s just a matter of time until courts are asked to weigh in on similar arguments.

“We think that the next wave of litigation may be to attack the use of algorithmic hiring and recruitment software,” said Adam Forman, a business attorney in Chicago for Epstein Becker Green. …

Indemnification in Eye of Beholder

As a result of those challenges, businesses seek other ways to validate an algorithm’s effectiveness, including by asking whether the technology has been stress-tested. Attorneys told Bloomberg Law they’re also advising employers to run hiring algorithms against their existing hiring systems until they can verify the results.

Employers are also pushing vendors to agree to pay up—or indemnify—in the event the company gets sued for discrimination.

“We don’t see a downside to insisting that the vendor indemnify the employer, should the algorithm be subject to legal challenge,” Forman said. “If you validated your product and you believe in it, back it up. But we also tell the employer: Look, this vendor is selling to a lot of other customers.’ If some other company gets sued and this vendor indemnifies, how much money are they going to have left?”

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