A U.S. federal judge just handed artificial intelligence ("AI") one of its first big courtroom wins that will likely ripple through every major copyright case against AI companies.

In Bartz v. Anthropic, the court ruled that it is fair use to use legally purchased books to train an AI model. Judge Alsup called the use "quintessentially transformative," comparing teaching an AI how to write to a human reading a book to learn how to write. Since the AI wasn’t copying or republishing the books, just learning from them, he found it didn’t violate copyright laws. 

This is huge for the growth of AI models. However, a real terrible moment for authors, artists, and other creators who have been arguing that using their work, especially without permission, amounts to large-scale theft. 

This decision will shape the future, unless reversed on appeal. While Judge Alsup's ruling is not binding on other courts across the U.S., every founder, judge, and lawyer working on AI copyright issues needs to take notice.

To be clear, Judge Alsup's ruling doesn’t give AI companies a free pass. He has also allowed a separate claim to move forward about allegedly using pirated books for training. As a result, the how and where data comes from still matters.

Well, here it is, a federal judge just let a discrimination lawsuit move forward against Workday, the tech giant behind hiring software used by over 10,000 companies. Who is the plaintiff? A Black man over 40 with anxiety and depression who says he was auto-rejected more than 100 times by companies using Workday's AI.

He alleges the algorithm itself is biased, filtering out applicants based on race, age, and disability. This isn't just speculation, and he argues that it is supported by studies, which have shown AI hiring tools regularly replicate the same discrimination humans are supposed to avoid.

In July 2024, we blogged about New York’s DFS warning insurers, if you’re using AI and third-party tools, you’re responsible for making sure they don’t discriminate. That means audits, transparency, and clear legal accountability, even if the tool wasn’t built in-house.

In the New York Law Journal, we outlined exactly what a proper AI audit looks like, because when the lawsuits come, and they are coming, ignorance isn’t a defense, but a proper audit and intervention are very good defenses.

Workday says it “opposes discrimination.” Great. But denying wrongdoing doesn’t stop a lawsuit from moving forward, or a reputation from unraveling. If you’re using AI in hiring or other decision-making, the Workday case is a giant red flag. Start auditing NOW.

If your software is doing the sorting, you better know how it’s doing it, and who it’s leaving out.

So here’s the question: Have you audited your AI tools yet? 

AI's rapid growth comes with significant risks, particularly the potential for unchecked discrimination. As a result, new laws may soon require mandatory audits and enhanced training to ensure compliance and fairness.

In this New York Law Journal article, attorneys Andrew Lieb and Claudia Cannam outline the essential steps for conducting a proper AI audit—helping businesses stay ahead of evolving regulations and mitigate legal risks.

🔗 Read more here

As artificial intelligence continues to transform industries, it also presents unique legal challenges, particularly in avoiding discriminatory practices embedded in AI systems. To help attorneys navigate these complexities, Lieb at Law Associate Claudia Cannam recently taught a 1-credit CLE course through Quimbee, titled “Avoiding Discrimination in AI.”

Register Now: Attorneys can register for Claudia Cannam's Avoiding Discrimination in AI CLE course here.

On October 30th, 2023, President Biden issued an Executive Order (EO) addressing discrimination caused by artificial intelligence (AI), amongst other topics. 

The White House announced this EO in seeking to prevent AI from leading to and deepening discrimination, bias, and other issues in justice, healthcare, and housing. 

Now, agencies will be empowered to combat algorithmic discrimination, while enforcing existing authorities to protect anti-discrimination rights and safety. 

In summary, the Executive Order: 

• Calls for clear guidelines to keep AI algorithms from being used to exacerbate discrimination by landlords, Federal benefits programs, and Federal contractors.
• Tackles algorithmic discrimination through training, technical assistance, and coordinates with the Department of Justice and Federal civil rights offices for best practices to investigate and prosecute AI civil rights violations.
• Ensures fairness throughout the criminal justice system by developing best practices for the use of AI in sentencing, parole and probation, pretrial release and detention, risk assessments, surveillance, crime forecasting and predictive policing, and forensic analysis.

The Biden Administration Blueprint for an AI Bill of Rights sets out steps those using AI can take to ensure fairness and equality. The steps include regularly checking for and addressing any biases in the design and use of AI systems, using diverse and representative data to avoid discrimination or unfair impacts, ensuring accessibility for people with disabilities during the design and development of AI systems, conducting tests to identify and address any disparities before and after the AI system is in use, providing clear oversight from organizations to ensure fairness, and conducting independent evaluations and sharing easy-to-understand reports, including test results and how any issues are being addressed, to ensure these protective measures are in place.

If companies fail to comply and use AI incorrectly to deepen discrimination and bias, this Executive Order will become the basis for discrimination lawsuits as a result of the incorrect use.

To learn more about the Executive Order click here. To read the Biden Administration Blueprint for an AI Bill of Rights click here. 

Welcome to the age of artificial intelligence (AI) and employment discrimination. 

The Equal Employment Opportunity Commission (EEOC) just published a new recourse on AI and Title VII, which is a reminder that employment decisions are happening more and more through the utilization of AI and employers are responsible if the AI "has an adverse impact on individuals of a particular race, color, religion, sex, or national origin." 

In fact, the EEOC makes clear that employers may be responsible even if "the tools are designed or administered by another entity, such as a software vendor." 

So, all employers, regardless of location, should pay attention to NYC's NYC Local law 144, which became effective on January 1, 2023, and attempt to comply, as it's a way to mitigate your exposure. The Local Law regulates the use of "automated employment decision tools" when it comes to employment discrimination in hiring and promotions by requiring annual audits, a summary of audit results on the employer's website, and other notice requirements to those subjected to screening by the tool. 

By following NYC's lead with audits, employers can avoid major discrimination lawsuits through the fault of AI rather than human actors. That said, the audits should go beyond NYC's requirements and hit each of the 5 areas the EEOC suggests will result in discrimination claims, including: 

1. Resume scanners that prioritize applications using certain keywords; 
2. Employee monitoring software that rates employees on the basis of their keystrokes or other factors; 
3. “Virtual assistants” or “chatbots” that ask job candidates about their qualifications and reject those who do not meet pre-defined requirements; 
4. Video interviewing software that evaluates candidates based on their facial expressions and speech patterns; and
5. Testing software that provides “job fit” scores for applicants or employees regarding their personalities, aptitudes, cognitive skills, or perceived “cultural fit” based on their performance on a game or on a more traditional test.