Job applicants sue Eightfold over “hidden” AI hiring scores, a new FCRA theory employers should watch

A new putative class action filed in Contra Costa County, California argues that AI-generated hiring scores and rankings can be treated like “consumer reports,” triggering the Fair Credit Reporting Act (FCRA) and California’s Investigative Consumer Reporting Agencies Act (ICRAA). The defendant is Eightfold AI Inc., a recruiting platform that, according to the complaint, evaluates and ranks job applicants for employer customers.

This is a complaint, so remember these are allegations, not proven facts. The Complaint has two named plaintiffs, Erin Kistler and Sruti Bhaumik. Ms. Kistler allegedly applied for positions with PayPal in December 2025, and she claims the application link included “eightfold.ai/careers” in the URL. It also alleges Eightfold failed to obtain required employer certifications and that she was not given the notices, rights information, and opportunity to dispute before adverse outcomes like a lower ranking score or rejection. The Complaint further alleges she was not interviewed and received no job offer for the positions she applied to through Eightfold.

Ms. Bhaumik alleges she applied for Microsoft roles in July 2025 and December 2025. She claims Microsoft used Eightfold’s tools in connection with those applications, and that she had to sign in through an email account linked to a site controlled by “eightfold.ai.” It also alleges Eightfold failed to obtain the required employer certifications and that the process lacked FCRA compliance.

What the Complaint alleges Eightfold is doing

The plaintiffs allege Eightfold uses “hidden” AI to collect sensitive information about applicants and then scores them from 0 to 5 for employers based on a supposed “likelihood of success.” They allege applicants often do not know Eightfold is involved and have no meaningful chance to review or dispute the AI-generated “report” before it influences whether they get a job.

The Complaint describes a process where Eightfold assembles information from the applicant, the prospective employer, and third-party online sources, then runs that data through its proprietary model. It alleges Eightfold markets its system as trained on massive datasets and as analyzing data from public sources and resume databases (it names examples such as LinkedIn and GitHub), then provides employers with ranked results that may be used to discard lower-ranked candidates before a human review.

Separately, the Complaint points to Eightfold materials describing a “Match Score” ranging from 0 to 5 (in 0.5 increments) that can be sorted into a ranked list.

The legal theory, AI hiring scores as “consumer reports”

The plaintiffs’ theory is basically: if a vendor is “making, assembling and evaluating” consumer information and furnishing that output to employers for employment decisions, the vendor can be treated as a consumer reporting agency (“CRA”), and its output can be a consumer report for employment purposes. The Complaint pleads this directly, alleging Eightfold is a CRA and that it made and furnished consumer reports using its “Evaluation Tools.”

That framing matters because FCRA has specific requirements when consumer reports are procured for employment purposes, including a certification from the “user” (the employer or end user) that it complied with the disclosure and authorization requirements and will comply with adverse-action obligations, and that the CRA provides a summary of rights with the report (or has previously provided it).

The Consumer Financial Protection Bureau (CFPB) has also taken the position that “background dossiers” and “algorithmic scores” obtained from third parties and used for hiring, promotion, reassignment, or retention decisions are often governed by the FCRA, and it emphasizes both employer obligations (permission, adverse-action notices) and CRA obligations (accuracy procedures, file disclosures, dispute investigations).

Class claims and requested relief

The Complaint proposes a nationwide class of U.S. residents who applied to jobs and were subjected to Eightfold’s evaluation tools during the limitations period. It also seeks a California class for the state-law claims. It asserts claims under the FCRA, the ICRAA, and California’s Unfair Competition Law, with the UCL claim expressly predicated on the alleged FCRA and ICRAA violations.

The likely defenses

Even when the allegations are given due consideration, this case presents substantive legal and technical complexities. One is whether the Eightfold output is actually a “consumer report,” or whether it is better characterized as an internal recruiting tool that processes applicant-provided information on behalf of the employer, without functioning like a traditional third-party reporting agency. The more a product is built on third-party data ingestion, opaque inferences, and standardized scoring sold across customers, the more plaintiffs will argue it belongs in the FCRA box. The less it looks like that, the harder the plaintiffs’ theory gets.

Another issue is allocation of responsibility: even when a vendor is involved, employers can still have their own disclosure, authorization, and adverse-action obligations if they are procuring consumer reports for employment purposes.

What Florida employers should do right now

If you use AI screening, this is a good time to review your process, even if you are nowhere near California. Now is the time to take inventory of every hiring tool that ranks, scores, or auto-filters applicants, not just background check vendors. Ask AI vendors, in writing, what data sources the tool uses, including whether it pulls third-party online sources or builds inferred traits, then confirm whether those outputs are provided back to you as a score, ranking, profile, or “match” result. It would also be prudent to review your vendor contract package for FCRA-style compliance provisions: certifications, disclosure and authorization workflow, adverse-action support, and dispute handling.

Finally, remember that a vendor's claim that they are not a CRA should be treated as a legal position, not a control. The control is whether your process, end to end, satisfies the FCRA guardrails if the tool is later characterized as furnishing consumer reports for employment purposes.