AI Hiring Nightmare: Eightfold Faces Lawsuit Over Hidden Applicant Scoring

Two job seekers, Erin Kistler and Sruti Bhaumik, filed a federal class-action lawsuit against AI hiring platform Eightfold on Tuesday, January 21, 2026, in California’s Contra Costa County Superior Court.

The plaintiffs allege that Eightfold secretly scores job applicants using artificial intelligence without their knowledge or consent, violating the Fair Credit Reporting Act (FCRA) and the California Investigative Consumer Reporting Agencies Act (ICRAA).

According to the complaint, Eightfold collects sensitive personal data, including social media activity, location tracking, and internet usage, from public sources such as LinkedIn, GitHub, and online job boards.

The platform allegedly uses this data to evaluate candidates applying for positions at companies including Microsoft, PayPal, Starbucks, and Morgan Stanley.

AI Tools Don’t Bypass Employment Laws

The lawsuit claims that Eightfold’s AI generates proprietary “Match Scores” ranging from 0 to 5, estimating a candidate’s “likelihood of success.” Plaintiffs contend that lower-ranked candidates are often rejected before a human reviewer sees their application.

Kistler, a product manager with nearly two decades of experience, reportedly applied for senior roles at PayPal without receiving an interview.

Bhaumik, a project manager, was allegedly rejected from a Microsoft role just two days after applying. Legal representatives note that nearly two-thirds of large companies now use AI screening technology, and 38% employ AI to rank applicants.

David Seligman, Executive Director of advocacy group Towards Justice and attorney for the plaintiffs, described the case as “a dystopian AI-driven marketplace, where automated systems make critical decisions about employment, housing, and healthcare.” He emphasized that advanced AI tools do not exempt companies from consumer protection laws.

Eightfold’s AI Uses 1.5 Billion Global Data Points

The lawsuit seeks actual and statutory damages ranging from $100 to $1,000 per violation under federal law, and up to $10,000 per violation under California law, in addition to punitive damages. Plaintiffs are requesting injunctive relief to force Eightfold to revise its hiring practices.

The complaint details that Eightfold’s AI reportedly integrates more than 1.5 billion global data points, along with over 1 million job titles and skills, to generate applicant profiles. The plaintiffs allege they never received disclosure that consumer reports would be created, nor summaries of their rights, or information about Eightfold’s role as a consumer reporting agency.

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