A U.S. judge has ruled against a group of 26 Meta Platforms employees seeking to halt layoffs while they pursue claims that the company's artificial intelligence tools unfairly targeted them for job cuts due to disabilities or medical leave.
District Judge William Orrick stated in a written order that he would not prevent Meta from carrying out layoffs scheduled to begin July 22. The judge determined that the employees could not demonstrate the "irreparable harm" necessary for an emergency order to block the job reductions while their legal claims are decided in private arbitration.
Meta has denied wrongdoing, asserting that human decision-making was responsible for the layoff decisions. The company notified nearly 8,000 employees, approximately 10% of its global workforce, about the job cuts in May, citing increased investment in AI.
The lawsuit, filed recently, alleges that Meta utilized AI tools to assess productivity and AI token usage when selecting roles for elimination. The plaintiffs claim these tools disadvantaged individuals who had taken time off for medical conditions or to care for family members. The company also reportedly used performance reviews that incorporated employees' adoption of AI.
This case is believed to be the first major legal challenge against a U.S. company over the alleged use of AI in layoff processes.
Plaintiffs' attorneys had sought a temporary restraining order and a pending motion for a preliminary injunction to halt the layoffs while their arbitration claims proceed. They argued that losing their jobs would result in the loss of stock options and employer-subsidized health insurance, which could impact medical care for conditions such as pregnancy.
Meta's legal team countered that the damages, including insurance coverage, are typically recoverable if the plaintiffs prevail in arbitration. The workers' motion argued that while Meta's agreements mandate individual arbitration for workplace disputes, they do not prohibit requests for temporary relief.
Most employees at large companies agree to arbitration clauses, which generally require individual claims to be resolved outside of court. Companies often cite arbitration as a faster and more cost-effective alternative to litigation, though critics argue it can favor employers.
The plaintiffs, who filed suit anonymously, include engineers, managers, researchers, and designers. They were informed of the layoffs in May, with finalization dates varying from late July to August.
Meta stated in court filings that laid-off workers remained on the payroll but lost access to company systems on May 20 and had not performed work since.
The lawsuit details the use of AI-assisted systems, including a large language model assistant named "Metamate" and a "second brain" that tracked communications and documents, as well as a productivity score derived from analyzing keystrokes, screen content, emails, and browser history. The plaintiffs contend that these systems were not paused during vacations or protected leave periods, leading to lower AI adoption scores that influenced their selection for layoffs.