Meta Sued by 26 Workers Over Claims AI Software Targeted Employees on Medical Leave for Layoffs

Twenty-six Meta employees have filed a novel lawsuit claiming the company used AI-powered software that disproportionately targeted workers with disabilities or on medical leave during mass layoffs.

Twenty-six employees of Meta Platforms have filed a novel lawsuit accusing the tech giant of using AI-powered software that disproportionately targeted people with disabilities or those who took medical leave when selecting workers for mass layoffs. The case appears to be the first against a major US company to challenge the alleged use of AI in conducting layoffs, making it a potential landmark in employment law.

What the Lawsuit Claims

The lawsuit was filed late Monday in federal court in Oakland, California. According to the complaint, Meta relied on factors such as productivity and AI token usage when it cut thousands of jobs earlier this year. The plaintiffs argue this approach disadvantaged employees who missed work because of medical conditions or because they were caring for family members.

The 26 plaintiffs, who filed anonymously, accuse Meta of violating federal and state laws that prohibit discrimination or retaliation against workers who have disabilities, take medical leave, or are pregnant. They also claim Meta failed to test its AI systems for bias, which they say violates recently adopted laws in California and New York City. The workers come from six states, including California and New York, as well as the District of Columbia.

What the Plaintiffs Are Seeking

The employees were notified in May that their jobs would be eliminated starting on July 22. They are now asking the court for a preliminary ruling that would block Meta from completing the layoffs while they pursue their claims in private arbitration.

The workers say Meta’s employment agreements require staff to arbitrate workplace disputes individually, but they argue those agreements do not apply to requests for temporary relief, which is why they have turned to the court for an injunction.

Meta’s Response

Meta has pushed back firmly against the allegations. A company spokesperson said on Tuesday that the claims lack merit, adding that workforce management and organizational decisions were and are made by people, not AI.

The Bigger Picture: Meta’s Layoffs and AI Push

The lawsuit lands amid a sweeping restructuring at Meta. Key developments this year include:

• Meta laid off 10 percent of its global workforce in May, amounting to nearly 8,000 people.
• The company had been planning additional job cuts later in the year, according to earlier reporting by Reuters.
• CEO Mark Zuckerberg has since said he does not expect any more company-wide layoffs this year.
• The changes are part of a far-reaching overhaul as Meta increases its AI investments and centers AI agents in both its products and its internal approach to work.

Why This Case Matters

As companies increasingly adopt AI tools for workforce decisions, this lawsuit could set an early precedent for how courts treat claims of algorithmic bias in layoffs. New laws in California and New York City require employers to test certain AI systems for bias, and this case may become an early test of how those rules are enforced.

For workers, the case highlights growing concerns that automated or data-driven metrics, such as productivity scores, can penalise employees whose output dipped for legally protected reasons like medical leave, disability, or pregnancy. For employers, it underscores the legal risks of deploying AI in sensitive human resources decisions without transparency and bias testing.

The outcome of the plaintiffs’ request for a preliminary ruling will be closely watched, as the layoffs are set to take effect on July 22 while the broader dispute heads toward private arbitration.