US Judge Allows Meta Layoffs to Proceed Despite AI Discrimination Claims

Facebook-parent Meta Platforms can reportedly go ahead with its planned layoffs of 26 employees who have sued the company, a US judge has ruled. According to a report by the news agency Reuters, the decision comes after the Meta employees had asked the court to block the layoffs, alleging that the company selected them for job cuts using AI-powered evaluation tools that discriminated against workers with disabilities or those who had taken medical leave. However, while declining to halt the layoffs which are scheduled to begin next week, US District Judge William Orrick in Oakland, California, said the court “may reconsider” its decision if the employees provide additional evidence regarding “whether and how AI was used” in the company's workforce reduction. In a joint statement after the ruling, the employees' lawyers told Reuters, “The Court expressly stated that it may reconsider its determinations based on any additional evidence the parties provide regarding whether and how AI was used' in the reduction in force.”

The Reuters report notes that the US District Judge Orrick rejected the employees' request for a temporary restraining order that would have prevented Meta from carrying out the layoffs while their claims proceed through private arbitration. In his written order, Orrick said the employees had not shown that losing their jobs would amount to the "irreparable harm" required for an emergency order blocking the layoffs. Meta declined to comment on the ruling. The company has also denied wrongdoing and has said that decisions related to the layoffs were made by humans.

The lawsuit, filed earlier this week by 26 anonymous employees, claims Meta relied on AI-assisted systems to help determine which jobs would be eliminated during its latest workforce reduction. According to the complaint, the company used AI tools that measured productivity, AI token usage and AI adoption, which the employees allege disadvantaged workers who had taken medical leave or time off to care for family members. The plaintiffs also claim Meta used several internal AI-assisted systems to score and rank employees for layoffs, including a large language model assistant called “Metamate,” an employee-trained “second brain” that tracked communications and documents, and a productivity score generated from scanning keystrokes, screen content, emails and browser history. They allege these systems continued to collect performance-related data while employees were on legally protected leave, resulting in lower AI adoption scores that were later used in layoff selection. The employees remain on Meta's payroll but lost access to company systems in May and have not performed work since then, according to court filings. The layoffs are scheduled to be finalised on July 22 for many employees, with others expected to leave later in July or August. During a hearing this week, plaintiffs' lawyer Barbara Cowan argued that employees would lose more than salaries, saying, “There's no do-over for bonding with a new baby or giving birth or having active medical treatment.” Meta's lawyer Erin Connell responded that the workers were losing employer-subsidised health insurance rather than coverage altogether, and argued that such losses could be compensated later if the employees succeed in arbitration. The lawsuit is believed to be the first against a major US company alleging the use of AI tools in selecting employees for layoffs.