Introduction

Derek Mobley, a Black man over forty with a disability, applied for more than one hundred jobs with companies that used Workday, Inc.’s applicant-screening platform. Mobley was rejected from every job he applied to, often within minutes and frequently before any humans at the employer had opened his file. 1Open this footnote Close this footnote 1 See Third Amended Complaint ¶¶ 29-52, Mobley v. Workday, Inc., No. 23-cv-00770 (N.D. Cal. Mar. 27, 2026), ECF No. 287 [hereinafter TAC]; Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 807 (N.D. Cal. 2024) (order granting in part and denying in part motion to dismiss). …Open this footnote Close In February 2023 he sued not the employers but Workday itself. Mobley based the suit on the theory that Workday was an “agent” of the employers under Title VII, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA). 2Open this footnote Close this footnote 2 TAC ¶¶ 9, 130-34; see 42 U.S.C. § 2000e(b); 29 U.S.C. § 630(b); 42 U.S.C. § 12111(5)(A). …Open this footnote Close In July 2024, the district court partially denied Workday’s motion to dismiss, and in May 2025, Judge Rita Lin certified a nationwide collective on the ADEA claim, aggregating approximately 1.1 billion processed applications. 3Open this footnote Close this footnote 3 Mobley, 740 F. Supp. 3d at 813-14; Mobley v. Workday, Inc., No. 23-cv-00770, 2025 WL 1424347, at *11 (N.D. Cal. May 16, 2025) (order granting preliminary collective certification). …Open this footnote Close That said, nearly a year before that certification order, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo had handed Workday its most natural defense.

In Loper Bright Enterprises v. Raimondo, the Court overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., ending forty years of judicial deference to agency interpretations of ambiguous statutes. 4Open this footnote Close this footnote 4 Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2273 (2024); Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). …Open this footnote Close In Chevron’s place, Loper Bright instructed that courts use ordinary tools of statutory interpretation to ascertain a statute’s “single, best meaning.” 5Open this footnote Close this footnote 5 Loper Bright, 144 S. Ct. at 2266. …Open this footnote Close Six months later, the Trump Administration revoked the Biden artificial intelligence (AI) executive order. 6Open this footnote Close this footnote 6 Exec. Order No. 14179, 90 Fed. Reg. 8741 (Jan. 31, 2025) (revoking Exec. Order No. 14110, 88 Fed. Reg. 75191 (Nov. 1, 2023)). Executive Order 14110 directed federal agencies to develop AI safety standards and to address algorithmic discrimination, including in hiring. …Open this footnote Close Then, on January 27, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) withdrew its 2023 AI hiring guidance from its website. 7Open this footnote Close this footnote 7 See Erinn L. Rigney, Ninamarie C. Moore & Isabella F. Sparhawk, The Changing Landscape of AI: Federal Guidance for Employers Reverses Course with New Administration, K&L Gates (Jan. 31, 2025), https://perma.cc/‌YZA2-Q6BX; see also EEOC, Select Issues: Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964 (May 18, 2023), https://perma.cc/‌P6JR-FE57. …Open this footnote Close By April 2025, Executive Order 14281 had directed federal agencies to deprioritize disparate-impact enforcement entirely. 8Open this footnote Close this footnote 8 Exec. Order No. 14281, 90 Fed. Reg. 17537, 17538 (Apr. 28, 2025). Section 2 declares it “the policy of the United States to eliminate the use of disparate-impact liability in all contexts”; Section 4 directs agencies to deprioritize enforcement of disparate-impact provisions, expressly including Title VII’s, 42 U.S.C. § 2000e-2. …Open this footnote Close

Workday’s defense assumes that holdings resting on the EEOC’s interpretive support cannot survive its withdrawal; Workday has already pressed exactly that argument against Mobley’s parallel ADEA holding, and conventional wisdom extends it to the agency theory. 9Open this footnote Close this footnote 9 See Defendant Workday, Inc.’s Motion to Dismiss Second Amended Complaint and to Strike at 6-7, Mobley v. Workday, Inc., 2026 WL 1711302 (N.D. Cal. Jan. 21, 2026) (No. 23-cv-00770), ECF No. 237, (arguing that Rabin v. PricewaterhouseCoopers LLP, 236 F. Supp. 3d 1126 (N.D. Cal. 2017), on which the court relied to hold that the ADEA reaches disparate-impact claims by job applicants, rested on Chevron deference to the EEOC’s interpretation, and that its “reliance on Chevron deference is thus no longer valid” after Loper Bright); Defendant Workday, Inc.’s Motion for Interlocutory Appeal Pursuant to 28 U.S.C. § 1292(b) at 6, Mobley v. Workday, Inc., No. 23-cv-00770 (N.D. Cal. Mar. 27, 2026), ECF No. 286 (renewing that argument and acknowledging the district court’s response that Rabin was “not contingent on deference to agency interpretation” and that Skidmore deference extends to the EEOC guidance). …Open this footnote Close

This Essay makes three doctrinal moves. First, Mobley’s real foundation is not EEOC interpretation but Restatement (Third) of Agency sections 1.01 and 7.07. 10Open this footnote Close this footnote 10 Restatement (Third) of Agency §§ 1.01, 7.07 (A.L.I. 2006). …Open this footnote Close The route into Title VII is textualist, because under Nationwide Mutual Insurance Co. v. Darden, the undefined term “agent” in 42 U.S.C. section 2000e(b) carries its common-law meaning. 11Open this footnote Close this footnote 11 Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (“[W]here Congress uses terms that have accumulated settled meaning under . . . the common law, a court must infer . . . that Congress means to incorporate the established meaning of these terms.” (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989)). …Open this footnote Close Second, the formal-control problem under sections 1.01 and 7.07(3)(a) is solved by a doctrinal label this Essay calls Functional Control Inversion, which Judge Lin’s reasoning in the July 2024 motion to dismiss order already invokes. 12Open this footnote Close this footnote 12 Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 806-08 (N.D. Cal. 2024). …Open this footnote Close Third, the boundary between substantive participation (Workday) and mere tool provision (a database vendor without a scoring layer) tracks the decisional-weight axis already implicit in Mobley itself and in Walters v. OpenAI, L.L.C.’s defamation framework.

Part I canvasses the Mobley docket and the 2024 to 2026 administrative-law cascade that followed Loper Bright, that is, the rapid sequence of executive orders and agency reversals the decision set in motion. Part II defends the common-law foundation; Part III draws the boundary between vendors that substantively participate in hiring decisions and those that merely supply a tool. Part IV addresses industry-burden objections. The Essay begins where Mobley’s posture meets Loper Bright’s reversal, questioning whether the doctrine that survived July 2024’s motion to dismiss can survive June 2024’s earthquake.

I. Background

A. The Mobley Docket

Mobley filed in February 2023 under Title VII, section 1981, the ADEA, and the ADA; the complaint named no employer. 13Open this footnote Close this footnote 13 Complaint, Mobley v. Workday, Inc., No. 23-cv-00770 (N.D. Cal. Feb. 21, 2023), ECF No. 1. …Open this footnote Close Judge Lin granted Workday’s first motion to dismiss with leave to amend in January 2024, then granted in part and denied in part the second in July 2024. 14Open this footnote Close this footnote 14 Mobley v. Workday, Inc., No. 23-cv-00770, 2024 WL 208529, at *7 (N.D. Cal. Jan. 19, 2024); Mobley, 740 F. Supp. 3d at 813-14. …Open this footnote Close The intentional-discrimination claims fell, while the disparate-impact claims survived on an agency theory. The agency theory holds that, because Title VII reaches not only employers but also “any agent” of an employer, a vendor to which an employer delegates part of the hiring function can itself be liable as the employer’s agent. 15Open this footnote Close this footnote 15 Mobley, 740 F. Supp. 3d at 804-07. …Open this footnote Close The pivotal sentence in the decision read Workday’s software as “not simply implementing in a rote way the criteria that employers set forth, but . . . instead participating in the decisionmaking process by recommending some candidates to move forward and rejecting others.” 16Open this footnote Close this footnote 16 Id. at 807. …Open this footnote Close Later, in May 2025, Judge Lin certified a nationwide ADEA collective, finding that “[a]llegedly widespread discrimination is not a basis for denying notice.” 17Open this footnote Close this footnote 17 Mobley v. Workday, Inc., No. 23-cv-00770, 2025 WL 1424347, at *1 (N.D. Cal. May 16, 2025). …Open this footnote Close Workday’s disclosure of approximately 1.1 billion processed applications during the relevant period made this potentially the largest collective ever certified. 18Open this footnote Close this footnote 18 Id. at *11; see TAC ¶ 30. …Open this footnote Close A July 2025 expansion order folded HiredScore Spotlight and Fetch features, part of an entity acquired by Workday in 2024, into the certified class. 19Open this footnote Close this footnote 19 Mobley v. Workday, Inc., No. 23-cv-00770, slip op. at 1-2 (N.D. Cal. July 29, 2025) (order re HiredScore dispute). …Open this footnote Close

B. The Loper Bright Cascade

In Loper Bright, Chief Justice Roberts’s six-justice majority overruled Chevron, holding that the Administrative Procedure Act requires courts to exercise independent judgment in deciding whether an agency has acted within its statutory authority and that courts may not defer to an agency interpretation simply because a statute is ambiguous. 20Open this footnote Close this footnote 20 Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2273 (2024). …Open this footnote Close An administrative law cascade followed at speed: Executive Order 14179 revoked Biden Executive Order 14110; 21Open this footnote Close this footnote 21 Exec. Order No. 14179, supra note 6, at 8741. …Open this footnote Close the EEOC removed its AI guidance on January 27, 2025; 22Open this footnote Close this footnote 22 The withdrawn guidance had explained that Title VII’s adverse-impact framework applies to employers’ use of algorithmic and AI selection tools. See EEOC, supra note 7. …Open this footnote Close Executive Order 14281 directed agencies to deprioritize disparate-impact enforcement; 23Open this footnote Close this footnote 23 Exec. Order No. 14281, supra note 8. …Open this footnote Close and the Department of Justice rescinded its Title VI disparate-impact regulations on December 10, 2025. 24Open this footnote Close this footnote 24 Rescinding Portions of Department of Justice Title VI Regulations, 90 Fed. Reg. 57141 (Dec. 10, 2025) (to be codified at 28 C.F.R. pt. 42) (eliminating the disparate-impact provisions of 28 C.F.R. § 42.104 on the ground that Title VI bars only intentional discrimination). The rescission is regulatory only and does not affect Title VII (private-employer) disparate-impact claims, which remain codified at 42 U.S.C. § 2000e-2(k). …Open this footnote Close On the surface, every one of these developments is a headwind for AI-civil-rights litigation. But each operates at a different doctrinal layer, and the doctrinal path that carries Mobley’s agency theory into Title VII (§ 701(b)’s text, Darden, and the Restatement of Agency) does not depend on any of them.

C. The Common-Law Layer

What none of the 2024-2026 developments touched was Title VII’s text. § 701(b) defines “employer” to include “any agent of such a person.” 25Open this footnote Close this footnote 25 42 U.S.C. § 2000e(b). Parallel agent provisions appear at 29 U.S.C. § 630(b) (ADEA) and 42 U.S.C. § 12111(5)(A) (ADA). …Open this footnote Close Congress did not define “agent” in the statute. The controlling case is Darden, decided unanimously by Justice Souter in 1992, which addressed undefined statutory terms generally rather than Title VII’s “agent” specifically 26Open this footnote Close this footnote 26 Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989)). …Open this footnote Close : Undefined common-law terms in federal employment statutes carry their common-law meaning unless the statute clearly indicates otherwise. Loper Bright’s instruction that courts use ordinary tools of construction to find a statute’s “single, best meaning” also points federal courts to that common-law meaning, supplied here by the Restatement (Third) of Agency. The doctrinal level on which Mobley’s agency theory operates is therefore not regulatory; it is common law, statutorily incorporated by Title VII § 701(b), and required by Darden’s textualist canon. 27Open this footnote Close this footnote 27 See 42 U.S.C. § 2000e(b); Darden, 503 U.S. at 322-23. …Open this footnote Close What follows shows why that floor holds.

II. The Common-Law Foundation

A. The Restatement Framework

The agency relationship the Restatement of Agency defines is not a creature of administrative interpretation; it is a doctrinal structure with four discrete elements, 28Open this footnote Close this footnote 28 Restatement (Third) of Agency § 1.01 (A.L.I. 2006). …Open this footnote Close each of which is either plainly satisfied in the AI-vendor scenario or is the subject of a doctrinal puzzle this Essay must solve. Section 1.01, which defines the principal-agent relationship, requires (1) the principal’s manifestation of assent, (2) that the agent act on the principal’s behalf, (3) subject to the principal’s control, and (4) the agent’s manifestation of assent or performance of the requested service. 29Open this footnote Close this footnote 29 Id.; id. cmt. d. …Open this footnote Close The first two elements are uncontested. When an employer signs a master services agreement with Workday and uploads job postings, the employer has manifested assent, and Workday’s screening serves the employer’s hiring goals, not Workday’s own. 30Open this footnote Close this footnote 30 See Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 806-08 (N.D. Cal. 2024). …Open this footnote Close The fourth element is satisfied under section 1.01 comment d, which clarifies that an agent’s assent need not be communicated to the principal. 31Open this footnote Close this footnote 31 Restatement (Third) of Agency § 1.01 cmt. d (A.L.I. 2006). …Open this footnote Close However, the third element, control, is where black-box AI breaks the traditional analysis, 32Open this footnote Close this footnote 32 See infra Part II.B. …Open this footnote Close and where Functional Control Inversion enters in Part II.B.

Section 7.07 governs whether vicarious liability flows to the principal. 33Open this footnote Close this footnote 33 Restatement (Third) of Agency § 7.07(1) (A.L.I. 2006). …Open this footnote Close That is a separate question from the one section 1.01 answers. Section 1.01 asks whether the vendor is an agent at all, which § 701(b) makes directly actionable; section 7.07 asks the further question whether that agent is also an employee the principal answers for vicariously. Section 7.07(3)(a) defines an “employee” as “an agent whose principal controls or has the right to control the manner and means of the agent’s performance of work.” 34Open this footnote Close this footnote 34 Id. § 7.07(3)(a). …Open this footnote Close Some courts treat this as more demanding than section 1.01’s “subject to control” language. 35Open this footnote Close this footnote 35 See, e.g., Alfaro-Huitron v. Cervantes Agribusiness, 982 F.3d 1242, 1254 (10th Cir. 2020) (contrasting the “minimal level of control” that establishes an agency relationship with the “much more significant and intrusive right of control that makes an agent an employee” under section 7.07(3)(a)); Quigley v. Rosenthal, 327 F.3d 1044, 1064 (10th Cir. 2003) (deeming control of “the manner of work performed” by the agent “a requirement necessary only if an agent is alleged to be an employee as opposed to an independent contractor”). …Open this footnote Close However, the gap closes once the right-versus-exercise distinction in the comments is taken seriously. 36Open this footnote Close this footnote 36 See Restatement (Third) of Agency § 1.01 cmts. c, f. …Open this footnote Close That distinction separates the right to control from its actual exercise: Section 7.07(3)(a) is met so long as the principal retains the right to control the manner and means of the agent’s work, even if it rarely or never exercises that right. The Supreme Court already imported common-law agency principles into Title VII analysis for harassment liability in Burlington Industries, Inc. v. Ellerth and Faragher v. City of Boca Raton. 37Open this footnote Close this footnote 37 Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 754-55 (1998) (drawing on the Restatement (Second) of Agency to ground Title VII supervisor-harassment liability in common-law agency principles); Faragher v. City of Boca Raton, 524 U.S. 775, 791-92, 808 (1998) (applying the same agency principles to hold an employer vicariously liable under Title VII). …Open this footnote Close Common-law agency is the standard route into Title VII, not a novel one; 38Open this footnote Close this footnote 38 See Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 72 (1986) (declining to set a definitive rule but directing courts to look to common-law agency principles for guidance on Title VII employer liability); Ellerth, 524 U.S. at 754-55; Faragher, 524 U.S. at 791-92. …Open this footnote Close the Essay’s contribution is showing why this standard route survives Loper Bright while the agency-deference route does not. Plaintiffs need not invoke section 7.07 for vicarious liability; section 1.01 establishes the vendor’s status as agent, which triggers direct liability under § 701(b)’s textual inclusion of “any agent.” 39Open this footnote Close this footnote 39 42 U.S.C. § 2000e(b) (including “any agent” of an employer within the statutory definition of “employer”). …Open this footnote Close

Workday’s principal Ninth Circuit defense is Miller v. Maxwell’s International Inc., 40Open this footnote Close this footnote 40 Miller v. Maxwell’s Int’l Inc., 991 F.2d 583, 587-88 (9th Cir. 1993). …Open this footnote Close which Judge Lin distinguished in the July 2024 order. 41Open this footnote Close this footnote 41 Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 806 (N.D. Cal. 2024). …Open this footnote Close Miller addressed individual-supervisor liability driven by concerns about exposing individual employees with limited resources; that rationale does not extend to corporate algorithmic vendors. 42Open this footnote Close this footnote 42 See id. (distinguishing Miller). …Open this footnote Close Beyond that distinction, Miller sits inside a broader Ninth Circuit pattern that has long extended Title VII obligations to non-direct-employer entities under common-law principles. In Bates v. Pacific Maritime Ass’n, then-Circuit Judge Kennedy applied the successorship doctrine to bind a non-original-party entity to the obligations of a Title VII consent decree, observing that “[a]n employer is not necessarily relieved of successor obligations simply because it displaces the former employer.” 43Open this footnote Close this footnote 43 Bates v. Pac. Mar. Ass’n, 744 F.2d 705, 708-10 (9th Cir. 1984) (Kennedy, J.) (extending Title VII obligations to non-original-party entity). …Open this footnote Close Slack v. Havens applied the same principle nearly a decade earlier. 44Open this footnote Close this footnote 44 Slack v. Havens, 522 F.2d 1091, 1094-95 (9th Cir. 1975). …Open this footnote Close The Supreme Court, along with the First, Second, and Eleventh Circuits, have all applied an “agent of the employer” theory to non-direct employers across decades. 45Open this footnote Close this footnote 45 See City of L.A., Dep’t of Water & Power v. Manhart, 435 U.S. 702, 718 n.33 (1978); Williams v. City of Montgomery, 742 F.2d 586, 589 (11th Cir. 1984) (per curiam); Spirt v. Tchrs. Ins. & Annuity Ass’n, 691 F.2d 1054, 1063 (2d Cir. 1982); Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler’s Ass’n of New England, Inc., 37 F.3d 12, 17-18 (1st Cir. 1994). …Open this footnote Close Workday’s Miller argument is a regional outlier. A corporate vendor exercising a delegated screening function is not Miller’s middle-manager defendant; it is exactly the kind of intermediary § 701(b) was meant to reach. 46Open this footnote Close this footnote 46 See 42 U.S.C. § 2000e(b); Slack, 522 F.2d at 1094-95. …Open this footnote Close

B. The Control Inversion

The traditional formulation of agency control, where the principal directs and the agent executes, is inapplicable to the AI-hiring scenario. That failure is not, however, fatal to agency liability. Typically, the principal tells the agent what to do and monitors performance. 47Open this footnote Close this footnote 47 Restatement (Third) of Agency § 1.01 cmt. f (A.L.I. 2006) (defining principal-agent control). …Open this footnote Close However, in black-box AI hiring, the employer cannot inspect proprietary decision rules 48Open this footnote Close this footnote 48 See TAC ¶ 101. …Open this footnote Close or supervise their operation in real time. Read formally, the principal-controls-agent element is missing. 49Open this footnote Close this footnote 49 See Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 808 (N.D. Cal. 2024) (acknowledging the formal-control gap). …Open this footnote Close This formal gap is the source of the independent-contractor argument that a vendor whose decision rules the employer can neither direct nor monitor is an independent contractor rather than an agent, and thus outside § 701(b). 50Open this footnote Close this footnote 50 See Restatement (Third) of Agency § 1.02 (A.L.I. 2006) (providing that how the parties characterize their relationship is not controlling; agency arises only when the elements stated in section 1.01 are present). …Open this footnote Close Nevertheless, section 1.02 of the Restatement (Third) of Agency forecloses this move. A contractual “independent contractor” label is not controlling, because agency turns on whether section 1.01’s elements are present in fact. 51Open this footnote Close this footnote 51 Id. …Open this footnote Close

Functional Control Inversion is not a new doctrine. It is the label this Essay coins for the form-versus-function principle Judge Lin invoked in the July 2024 motion-to-dismiss order. 52Open this footnote Close this footnote 52 See Mobley, 740 F. Supp. 3d at 806-08. …Open this footnote Close This order read Workday’s software as participating in the decisionmaking process rather than implementing employer criteria in a rote way and observed that nothing in the federal anti-discrimination statutes distinguishes between delegating functions to an automated agent and to a live human one. 53Open this footnote Close this footnote 53 Id. (citing Williams v. City of Montgomery, 742 F.2d 586, 589 (11th Cir. 1984) (per curiam)). …Open this footnote Close The Restatement (Third) of Agency confirms this reading. 54Open this footnote Close this footnote 54 See Restatement (Third) of Agency § 1.01 cmt. c (A.L.I. 2006). …Open this footnote Close Section 1.01 comment c states that “a person may be an agent although the principal lacks the right to control . . . the agent’s exercise of professional judgment” and that “[a] principal’s failure to exercise the right of control does not eliminate it.” 55Open this footnote Close this footnote 55 Id. …Open this footnote Close Section 1.01 comment f adds that “a principal has the right to give interim instructions or directions to the agent once their relationship is established.” 56Open this footnote Close this footnote 56 Id. § 1.01 cmt. f. …Open this footnote Close And section 7.07 comment f, applying these principles to employees specifically, holds that “all employers retain a right of control, however infrequently exercised.” 57Open this footnote Close this footnote 57 Id. § 7.07 cmt. f. …Open this footnote Close That right is what employers who use Workday retain, through control levers such as terminating the contract, disabling or reconfiguring features, auditing the vendor’s outputs, and overriding individual determinations. 58Open this footnote Close this footnote 58 See id. § 7.07 cmt. f. …Open this footnote Close What these employers have delegated is the moment-to-moment screening function. Thus, section 1.01’s control element is satisfied. 59Open this footnote Close this footnote 59 Id. § 1.01. …Open this footnote Close Functional Control Inversion describes how that delegated discretion takes algorithmic form.

Judge Lin did not name the Functional Control Inversion concept, but it is the underlying logic of her opinion. The class-certification order uses two phrases that, read together, articulate the insight precisely. Quoting the July 2024 motion-to-dismiss order, the court observes that “Workday’s customers delegate traditional hiring functions, including rejecting applicants, to the algorithmic decisionmaking tools provided by Workday.” 60Open this footnote Close this footnote 60 Mobley v. Workday, Inc., No. 23-cv-00770, 2025 WL 1424347, at *3 (N.D. Cal. May 16, 2025) (quoting Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 808 (N.D. Cal. 2024)). …Open this footnote Close And the certification reasoning rests on the finding that collective members “were allegedly required to compete on unequal footing due to Workday’s discriminatory AI recommendations.” 61Open this footnote Close this footnote 61 Id. at *1. …Open this footnote Close That delegation and that unequal footing are the inversion. The principal has surrendered substantive screening, and the agent’s decisional weight produces the disparate outcome. 62Open this footnote Close this footnote 62 See id. at *2, *9-10. …Open this footnote Close

C. The Textualist Reinforcement

The conventional reading of Loper Bright, that the AI-civil rights litigation pipeline collapses with EEOC guidance, misreads what Loper Bright actually did. The misreading assumes Mobley’s agency theory leaned on the EEOC’s interpretation, so that withdrawing the guidance pulls the theory down with it. That assumption accords with Workday’s framing and conventional wisdom. Neither Mobley’s complaint nor Judge Lin’s orders invoked agency deference, and the EEOC’s guidance only confirmed the common-law meaning of “agent.” 63Open this footnote Close this footnote 63 .See TAC ¶¶ 9, 130-134 (alleging Workday “acts as an agent of its client-employers by exercising delegated authority over the hiring process”); Mobley, 740 F. Supp. 3d at 804-07 (construing “any agent” in 42 U.S.C. § 2000e(b) as a matter of statutory text and common-law delegation); Mobley, 2025 WL 1424347, at *7 (certifying the collective on that agency theory). None of these sources relies on Chevron deference or the EEOC’s guidance. …Open this footnote Close Loper Bright relocated statutory interpretation from agency deference to text. 64Open this footnote Close this footnote 64 Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2266, 2273 (2024). …Open this footnote Close For Title VII’s term “agent” in § 701(b), that relocation is a benefit, not a cost. Darden supplies the controlling canon: “Where Congress uses terms that have accumulated settled meaning under . . . the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.” 65Open this footnote Close this footnote 65 Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989)). …Open this footnote Close Title VII’s “agent” is a classic common-law term, undefined in the statute, with centuries of doctrinal content under the Restatements. 66Open this footnote Close this footnote 66 See Restatement (Third) of Agency § 1.01 (A.L.I. 2006). …Open this footnote Close Under Darden, courts must apply that common-law meaning. 67Open this footnote Close this footnote 67 Darden, 503 U.S. at 322-23; see Pauline T. Kim, Data-Driven Discrimination at Work, 58 Wm. & Mary L. Rev. 857, 866-67 (2017) (arguing Title VII § 703(a)(2) prohibits classification bias). …Open this footnote Close Loper Bright’s instruction that courts use ordinary tools of construction, including the common-law presumption, directly reinforces this reading. 68Open this footnote Close this footnote 68 See Loper Bright, 144 S. Ct. at 2273. …Open this footnote Close

There are three additional reasons this theory survives. First, no Chevron deference is invoked: The Essay asks courts to apply Restatement definitions as Darden requires, and Loper Bright is irrelevant to this common-law application. 69Open this footnote Close this footnote 69 See id.; Darden, 503 U.S. at 322-23. …Open this footnote Close Second, Skidmore deference survives in a supporting role. Loper Bright explicitly preserved Skidmore v. Swift & Co., which gave persuasive weight to agency interpretations with “power to persuade.” 70Open this footnote Close this footnote 70 Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944); Loper Bright, 144 S. Ct. at 2262, 2267; see Brief for EEOC as Amicus Curiae, Mobley v. Workday, Inc., No. 23-cv-00770 (N.D. Cal. Apr. 9, 2024), ECF No. 60 (Skidmore-eligible EEOC interpretation of Title VII agency). …Open this footnote Close Therefore, the EEOC’s April 2024 amicus brief in Mobley remains Skidmore-eligible, not as binding interpretation but as confirmatory evidence of the common-law analysis under Darden. 71Open this footnote Close this footnote 71 See Skidmore, 323 U.S. at 140 (according persuasive weight to an agency’s judgment based on “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade”); Brief for EEOC as Amicus Curiae, supra note 70, at 2 (arguing that Mobley plausibly alleged Workday is an “agent of employers because employers have purportedly delegated authority to Workday to make at least some hiring decisions”). …Open this footnote Close Third, the Burlington–Faragher line supplies a proof of concept. In both decisions the Supreme Court resolved Title VII employer liability through common-law agency, drawing the governing standard from the Restatement (Second) of Agency to hold employers vicariously liable for their supervisors’ harassment. 72Open this footnote Close this footnote 72 See Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 72 (1986); Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 754-55 (1998);Faragher v. City of Boca Raton, 524 U.S. 775, 791-92, 808 (1998). …Open this footnote Close Importing the Restatement into Title VII is thus nothing new. This Essay asks only that courts take the same step with the Restatement (Third), which has since succeeded the Second. The doctrinal channel is well-worn; only the edition of the Restatement has changed. The Loper Bright earthquake reshaped administrative-law deference, but in doing so it required courts to read federal statutes in the textualist, common-law sense in which Title VII’s “agent” was always meant to be read.

III. The Decisional-Weight Boundary

A. The Archetype: Mobley

Workday autonomously screens, scores, and rejects applicants before any human at the employer reviews their files; within-minutes rejection emails confirm autonomous operation. 73Open this footnote Close this footnote 73 TAC ¶¶ 50, 62. …Open this footnote Close That timing is an Iqbal marker: Rejection faster than plausible human review is itself a non-conclusory allegation of substantive delegation of decisional weight to the vendor. 74Open this footnote Close this footnote 74 See id.; Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) (distinguishing well-pleaded factual allegations, which are entitled to the assumption of truth, from conclusory assertions, which are not); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (requiring factual allegations that state a plausible, rather than merely conceivable, claim to relief). …Open this footnote Close The Third Amended Complaint pleads the agency theory in its operative form: “Workday, Inc. acts as an agent of its client-employers by exercising delegated authority over the hiring process, including screening, ranking, and filtering applicants through its platform. Employers rely on the results of Workday’s selection procedures in making hiring decisions.” 75Open this footnote Close this footnote 75 Id. ¶ 9; see Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 808 (N.D. Cal. 2024). …Open this footnote Close Where the algorithm operates as a gating mechanism, with rejected applicants never reaching human decisionmakers, the vendor has been delegated substantive decisional authority and is an agent of the employer for Title VII purposes. 76Open this footnote Close this footnote 76 Mobley, 740 F. Supp. 3d at 808. …Open this footnote Close

B. The Floor: Tool Provision

A vendor that supplies a candidate database without scoring or filtering exercises no decisional weight. 77Open this footnote Close this footnote 77 See id. (drawing a boundary line). …Open this footnote Close The principal-agent control inquiry never reaches the inversion problem because there is no decision being inverted. Judge Lin applies the same logic, rejecting agency liability for a software vendor whose product would only function as “a spreadsheet software program to sort workers by birthdate and then filtered out all applicants over the age of forty.” 78Open this footnote Close this footnote 78 Id.; see also Mobley v. Workday, Inc., No. 23-cv-00770, 2025 WL 1424347, at *7 (N.D. Cal. May 16, 2025) (adopting same boundary). …Open this footnote Close The vendor is a tool provider, not an agent; Title VII liability does not attach to the vendor, and the employer remains primarily liable for whatever discriminatory practices it operates downstream. 79Open this footnote Close this footnote 79 See 42 U.S.C. § 2000e-2(k) (Title VII disparate-impact provision). …Open this footnote Close

C. The Hard Case: Recommendation Layers

HiredScore, acquired by Workday in 2024, generates AI recommendations that an employer’s recruiters later review. 80Open this footnote Close this footnote 80 Mobley v. Workday, Inc., No. 23-cv-00770, slip op. at 1 (N.D. Cal. July 29, 2025) (describing HiredScore Spotlight and Fetch features). …Open this footnote Close For these products, the vendor does not autonomously reject applicants. Consequently, the inversion question is fact-specific: Does the recruiter substantively follow the recommendation, or treat it as one input among several? If recruiters functionally rubber-stamp the AI output, the vendor is an agent; if not, the vendor is not. Decisional weight is a matter of degree. A recommendation that recruiters remain formally free to reject, yet in practice almost never override, carries the decisional weight of an autonomous rejection, so the vendor that supplies it is an agent. And where the recommendation layer predictably steers a protected group toward rejection, the recruiter’s formal final say does not defeat agency, because a biased input that proximately drives the adverse decision remains actionable even when a human ratifies it, and a discriminatory component of a selection process is not cured by a balanced overall result. 81Open this footnote Close this footnote 81 See Connecticut v. Teal, 457 U.S. 440, 455-56 (1982) (holding that a discriminatory component of a selection process is actionable even where the overall “bottom line” is balanced); 29 C.F.R. § 1607.4(C) (2024) (providing that where the total selection process shows adverse impact, the individual components are evaluated for adverse impact); cf. Staub v. Proctor Hosp., 562 U.S. 411, 420-21 (2011) (holding that a decisionmaker’s exercise of judgment does not prevent a biased subordinate’s act from being the proximate cause of the adverse employment action). …Open this footnote Close At the pleading stage, plaintiffs can plausibly allege functional rubber-stamping by pointing to objective public markers, including vendor marketing claims that the product reduces recruiter screening time by a stated percentage, or statistical evidence that candidates below an algorithmic threshold are uniformly bypassed without human interview. 82Open this footnote Close this footnote 82 See generally Ifeoma Ajunwa & Cheng-chi (Kirin) Chang, Provenance, 73 UCLA L. Rev. (forthcoming 2026) (proposing an input- and output-provenance framework for verifying and auditing A.I.-generated content, including automated hiring systems that encode historical discrimination). …Open this footnote Close Judge Lin’s July 2025 expansion order folded HiredScore Spotlight and Fetch features into the certified class, expressly rejecting Workday’s arguments that HiredScore was acquired post-FAC and that it was “a separate product, built on a wholly separate technology platform,” and deferring to the decertification stage Workday’s argument that the HiredScore features used materially different scoring algorithms. 83Open this footnote Close this footnote 83 Mobley, slip op. at 1-2 (N.D. Cal. July 29, 2025) (quoting Letter Brief – Parties Joint Letter Regarding HiredScore at 2, Mobley v. Workday, Inc., No. 23-cv-00770 (N.D. Cal. July 16, 2025), ECF No. 157). …Open this footnote Close Vendor liability follows the product-line family, not a single stock-keeping unit (SKU); the agency analysis travels with the integration. 84Open this footnote Close this footnote 84 See id. at 2 (rejecting the product-separation defense). …Open this footnote Close The mechanism is the unit of analysis the court itself used. The expansion order defines the collective by the “unified policy” of using Workday’s AI recommendation system “to score, sort, rank, or screen applicants,” a definition that turns on what the software does within the employer’s hiring process, not on which acquisition, code base, or brand supplies it. 85Open this footnote Close this footnote 85 Id. at 1 (holding that the collective’s “unified policy” includes the HiredScore AI features). …Open this footnote Close The order polices the same functional line at the margins: Workday may exclude a customer only by showing that the customer received no scores or rankings, or never scored or screened candidates based on the AI features; exclusion negates the delegated function, not the product label. 86Open this footnote Close this footnote 86 Id. at 2 (setting out the customer-exclusion mechanism). …Open this footnote Close

D. The Anchors: Open-Source, the Fair Credit Reporting Act, and Walters

Three boundary cases anchor the framework, fixing its outer edges by showing where agency liability attaches and where it does not. First, under open-source models, where a publisher releases model weights and an employer self-deploys, no principal-agent relationship arises between the model author and the deploying employer. 87Open this footnote Close this footnote 87 See Restatement (Third) of Agency § 1.01 (A.L.I. 2006) (requiring the principal’s manifestation of assent that the agent act on the principal’s behalf and subject to the principal’s control, and the agent’s consent so to act). …Open this footnote Close Liability attaches to the deploying employer; the framework does not extend to model publishers because there is no contractual delegation. Second, the Eightfold pivot: In Kistler v. Eightfold AI, Inc., filed January 20, 2026 by counsel including former EEOC Chair Jenny Yang, plaintiffs chose the Fair Credit Reporting Act 88Open this footnote Close this footnote 88 15 U.S.C. §§ 1681–1681x. …Open this footnote Close and California’s Investigative Consumer Reporting Agencies Act (ICRAA) 89Open this footnote Close this footnote 89 Cal. Civ. Code § 1786. …Open this footnote Close over Title VII agency theory. 90Open this footnote Close this footnote 90 Complaint at 28, 31, 33, Kistler v. Eightfold AI, Inc., No. C26-00214 (Cal. Super. Ct. Contra Costa Cnty. Jan. 20, 2026). …Open this footnote Close Eightfold’s recommendation-only profile placed it lower on the decisional-weight axis than Workday, since Eightfold only surfaces recommendations for a human recruiter to review rather than autonomously rejecting applicants, and counsel routed through a different statutory framework. 91Open this footnote Close this footnote 91 Id. at 3. …Open this footnote Close Third, Walters v. OpenAI: 92Open this footnote Close this footnote 92 Walters v. OpenAI, L.L.C., No. 23-A-04860-2, slip op. at 4, 7-8 (Ga. Super. Ct. Gwinnett Cnty. May 19, 2025) (granting summary judgment to OpenAI and finding that Riehl, a journalist, recognized the output’s falsity “within about an hour and a half”). …Open this footnote Close Here, the Georgia court’s grant of summary judgment to OpenAI illustrates the framework’s outer edge. ChatGPT was queried by a journalist who chose the prompt, read the output, and recognized its falsity within ninety minutes; 93Open this footnote Close this footnote 93 Id.; cf. Cheng-chi (Kirin) Chang, Hallucinated Authority: AI Citations as Reckless Misrepresentation, 115 Geo. L.J. Online (forthcoming Sept. 2026) (manuscript at Part III) (on file with author) (locating responsibility for AI-generated falsehoods in the attorney who adopts and submits them, rather than in the tool that generated them). …Open this footnote Close on the framework advanced here, OpenAI was not exercising any function the user had traditionally exercised, and the user remained the decisional actor. 94Open this footnote Close this footnote 94 See Walters, slip op. at 6-8. …Open this footnote Close The framework distinguishes the two not by technology but by who has been delegated decisional authority. 95Open this footnote Close this footnote 95 Cf. Sandra G. Mayson, Bias In, Bias Out, 128 Yale L.J. 2218, 2221 (2019) (arguing that algorithmic disparity reflects structural inequality). For the canonical analysis of algorithmic disparate impact under Title VII, see Solon Barocas & Andrew D. Selbst, Big Data’s Disparate Impact, 104 Calif. L. Rev. 671, 694 (2016). …Open this footnote Close In Walters, the user chose the prompt and judged the output, so the user remained the decisionmaker; in Mobley, the employer handed the screening decision itself to the vendor. The controlling question is which actor holds the power to decide; whether that actor is an algorithm or a human is beside the point. Thus, the boundary between substantive participation and tool provision tracks decisional weight directly and gives federal courts a workable test at the pleading stage.

IV. The Industry-Burden Objection

The strongest counterargument is pragmatic, not doctrinal. Defendants will argue holding AI vendors directly liable as agents will paralyze the Software as a Service industry. Such a complaint fails. First, agency liability has applied to staffing agencies, professional employer organizations, and traditional recruiters for decades, and those industries have not collapsed. 96Open this footnote Close this footnote 96 See Spirt v. Tchrs. Ins. & Annuity Ass’n, 691 F.2d 1054, 1063 (2d Cir. 1982); Williams v. City of Montgomery, 742 F.2d 586, 589 (11th Cir. 1984) (per curiam); Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler’s Ass’n of New England, Inc., 37 F.3d 12, 17-18 (1st Cir. 1994). …Open this footnote Close Second, the framework’s boundary test in Part III explicitly limits agency status to substantive-participation vendors; pure tool providers are excluded. 97Open this footnote Close this footnote 97 See supra Part III.B (describing database vendor as floor). …Open this footnote Close Third, vicarious liability has historically been a feature of mature service industries, not a bug. 98Open this footnote Close this footnote 98 See Restatement (Third) of Agency § 7.07 (A.L.I. 2006). …Open this footnote Close

Contractual risk allocation is the actual mechanism, not a problem to be avoided. Workday already negotiates indemnity provisions with its more than ten thousand enterprise customers; 99Open this footnote Close this footnote 99 See TAC ¶ 30. …Open this footnote Close standard indemnity language allocates exactly this kind of legal risk between vendor and employer. The question is not whether the risk is allocated, because it always is, but which allocation the law endorses. Agency liability under common-law doctrine endorses an allocation that holds the substantive decisional actor accountable; 100Open this footnote Close this footnote 100 Cf. Restatement (Third) of Agency § 7.07(1) (A.L.I. 2006) (vicarious liability for tortious agent conduct). …Open this footnote Close contractual indemnity then reallocates between vendor and employer through arms-length negotiation.

California’s October 2025 Fair Employment and Housing Act (FEHA) regulations codify the agency theory at the state regulatory level. 101Open this footnote Close this footnote 101 Cal. Code Regs. tit. 2, § 11008(a) (2025). …Open this footnote Close The operative definition treats as an “agent” “any person acting on behalf of an employer, directly or indirectly, to exercise a function traditionally exercised by the employer or any other FEHA-regulated activity . . . including when such activities and decisions are conducted in whole or in part through the use of an automated decision system.” 102Open this footnote Close this footnote 102 Id. …Open this footnote Close That language closely tracks Judge Lin’s Functional Control Inversion formulation in the July 2024 motion-to-dismiss order, and was finalized after that order was issued. The implication of this new regulatory language transforms the Essay’s posture: This is no longer a piece of doctrinal advocacy asking courts to recognize a new theory of vendor liability. It is doctrinal mapping, describing a functional-control principle that has now been codified into California regulatory text and adopted by the Mobley plaintiffs’ counsel in their operative complaint, the Third Amended Complaint. 103Open this footnote Close this footnote 103 TAC ¶ 9. …Open this footnote Close Federal common-law analysis under the Restatement (Third) of Agency, the Mobley line of orders, and California’s regulatory text now point in the same direction. 104Open this footnote Close this footnote 104 Compare Restatement (Third) of Agency § 1.01 (A.L.I. 2006) (defining an agent as one who acts on the principal’s behalf and subject to the principal’s control), with Mobley v. Workday, Inc., 740 F. Supp. 3d 796, 806-08 (N.D. Cal. 2024) (treating a vendor whose software participates in the hiring decision as the employer’s agent), and Cal. Code Regs. tit. 2, § 11008(a) (2025) (defining “agent” to include any person acting on behalf of an employer, directly or indirectly, to exercise a function traditionally exercised by the employer, including through an automated decision system). …Open this footnote Close Convergence across three independent drafters, a federal judge, the California Civil Rights Council, and the Mobley plaintiffs’ counsel, is itself strong evidence that the doctrinal architecture is sound. The framework does not paralyze the industry, nor does it depend on any single agency’s enforcement priorities. Instead, it places liability where decisional weight rests, mirrors what California has already codified, and lets contractual indemnity handle the rest. 105Open this footnote Close this footnote 105 The pathway here is complementary to regulatory and ex ante alternatives. See Ifeoma Ajunwa, An Auditing Imperative for Automated Hiring Systems, 34 Harv. J.L. & Tech. 621, 630-31 (2021) (mandated audits); Aziz Z. Huq, Constitutional Rights in the Machine-Learning State, 105 Cornell L. Rev. 1875, 1884 (2020) (ex ante regulation plus aggregate litigation). …Open this footnote Close

Conclusion

Loper Bright did not destroy AI-civil-rights litigation; it relocated the doctrinal discussion from administrative-deference to the older, sturdier ground of common-law agency, exactly the ground Darden marked thirty-three years ago. 106Open this footnote Close this footnote 106 Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992). …Open this footnote Close The route runs through Title VII § 701(b)’s “agent,” Darden’s textualist common-law canon, section 1.01 of the Restatement (Third) of Agency, and the Functional Control Inversion principle. 107Open this footnote Close this footnote 107 Id.; 42 U.S.C. § 2000e(b); Restatement (Third) of Agency § 1.01 (A.L.I. 2006); see Mobley, 740 F. Supp. 3d at 806-08. …Open this footnote Close The boundary between substantive participation and tool provision tracks the decisional-weight spectrum, not a metaphysical line between AI and non-AI. Put differently, what triggers liability is the employer’s handoff of the decision to someone else. A vendor that decides who advances is an agent, whether it decides by algorithm or by human judgment. And federal-state convergence, with California’s FEHA regulations tracking Judge Lin’s reasoning almost verbatim, confirms that the doctrinal analysis holds. 108Open this footnote Close this footnote 108 See Cal. Code Regs. tit. 2, § 11008(a) (2025). …Open this footnote Close

The Mobley litigation will likely reach summary judgment within the next few years, and the courts that decide it will be working on common-law agency ground that Loper Bright and Darden left firmer than the conventional reading assumes. The algorithm was always the agent; Loper Bright and Darden together simply force us to remember why.

*Cheng-chi (Kirin) Chang (張正麒), Research Fellow, U.S.-Asia Law Institute, NYU Law; Affiliate Research Fellow, AI and the Future of Work Program, Emory Law (formerly Associate Director and Academic Fellow). I am grateful to Katherine A. Wilhelm, Ifeoma Ajunwa, and the many friends and colleagues whose generosity and encouragement have meant so much to me, in this work and well beyond it. Thanks to Lawrence B. Solum for his encouraging “Highly Recommended” of a draft of this Essay on the Legal Theory Blog. I also thank Sandra Chen, Hannah Lynn Dahleen, Raj Gambhir, Elise Faith Miner, Jane Alice O’Connell, William Summers, Megan Tran, and Jessica Jiaxi Zhu, and the other editors of the Stanford Law Review for their care and dedication in bringing this Essay to publication. Any errors or oversights are my sole responsibility.