A proposed class action lawsuit claims venture-backed Eightfold AI uses "hidden AI technology to collect sensitive and often inaccurate information about unsuspecting job applicants."

The lawsuit filed in the Superior Court of the State of California last month alleges that Softbank Vision Fund and General Catalyst-backed Eightfold ranks job applicants from zero to five based on their "likelihood of success" on the job. 

• State Street SPDR S&P 500 ETF Trust stock is trading near recent highs. What’s ahead for SPY stock?

Eightfold's technology "lurks in the background of job applicants collecting personal data such as social media profiles, location data, internet and device activity, cookies and other tracking to create a profile based on the candidate’s behavior," the lawsuit stated. This information is collected without the candidate’s knowledge and does not give them a chance to edit or remove any information that was collected.

“This characterization about our products is factually incorrect. Eightfold offers technology that enterprises use to manage their talent processes and engage with candidates. Eightfold does not ‘lurk’ or scrape personal web history, social media or the like to build ‘secret dossiers.’ Eightfold's platform operates only on data submitted by candidates to our customers or provided by our customers,” a representative from Eightfold told Benzinga in a statement.

“We use information such as skills, experience and education that applicants choose to submit to our customers and data authorized by our customers under contract. Candidates have the ability to view and, if necessary, correct the data Eightfold has gathered. This is one of many differentiators of our platform. Eightfold supports a dedicated experience where candidates can view the resume information used by our system, correct inaccuracies, and represent their skills accurately,” the statement continued.

The plaintiffs, two California residents listed in the lawsuit, claimed the AI company prevented them from moving forward in the job application process at companies such as Microsoft and PayPal, despite their necessary industry-related experience.

The lawsuit alleges that the company's practices have violated the Fair Credit Reporting Act (FCRA) and the California Investigative Consumer Reporting Agencies Act, both designed to help protect individuals from inaccurate consumer reports being used in employment decisions. 

"These are the kinds of reports that can have devastating consequences for people's jobs," the lawsuit states.  

The plaintiffs are seeking certification of the proposed classes, declaration that these practices are unlawful, along with injunctive relief to stop and remedy these practices. In addition, the plaintiffs seek attorneys’ fees, costs and any other relief the court deems fair.

Photo: Shutterstock