Cheng-chi (Kirin) Chang (New York University School of Law), Algorithm as Agent: AI Vendor Liability for Title VII Hiring Discrimination After Loper Bright, 79 Stanford Law Review (Online) (forthcoming 2026) on SSRN. Here is the abstract:
Mobley v. Workday is the most consequential AI-discrimination case in litigation, but it is poised to be misread. Mobley survived a motion to dismiss in July 2024 and reached collective certification in May 2025 on an agency theory: that an AI vendor whose algorithm autonomously screens applicants is an “agent” of the employer under Title VII. Conventional wisdom now treats Mobley as collateral damage of the 2024 to 2026 administrative-law cascade, in which Loper Bright Enterprises v. Raimondo overruled Chevron, the EEOC withdrew its 2023 AI hiring guidance, and Executive Order 14,281 directed federal agencies to deprioritize disparate-impact enforcement. On the conventional reading, the agency theory loses its footing once the EEOC’s interpretive support is stripped away.
This Article argues the opposite. Mobley’s foundation was never EEOC interpretation; it was Title VII’s text. Section 701(b) defines “employer” to include “any agent,” and under Nationwide Mutual Insurance Co. v. Darden, undefined common-law terms in federal employment statutes carry their common-law meaning, supplied by the RESTATEMENT (THIRD) OF AGENCY. Loper Bright’s textualism reinforces, rather than displaces, this route. The Article articulates the doctrinal label, Functional Control Inversion, for the form-versus-function principle Judge Lin already invoked: the employer retains ultimate legal control even as the vendor exercises operational discretion within the delegation, satisfying section 1.01’s control element. A boundary test grounded in decisional weight distinguishes substantive vendor participation, the Mobley archetype, from mere tool provision, the database-vendor floor. The algorithm was always the agent; Loper Bright and Darden together force courts to remember why.
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