A federal judge in California has allowed Meta to move forward with planned layoffs despite allegations that the company relied on AI-driven assessments that unfairly disadvantaged employees with disabilities and workers who had taken protected medical leave.
The ruling could help define how far companies can go in using AI to make major decisions about workers.
What happened?
U.S. District Judge William Orrick rejected a request from 26 Meta employees to temporarily freeze the layoffs. Reuters reported, via The Spokesman-Review, that the workers are pursuing private arbitration claims alleging that AI-assisted systems unfairly influenced Meta's layoff choices.
The judge said a temporary restraining order was not justified because the employees had not shown "irreparable harm." Orrick is still considering a separate motion for a preliminary injunction and said he would likely rule on it next month.
Filed anonymously, the case includes engineers, managers, researchers, and designers who say Meta considered productivity tracking, AI token usage, and performance reviews tied in part to employees' use of internal AI tools, Reuters reported.
Meta says it did nothing wrong and maintains that people, not software, made the layoff decisions. Reuters noted that in May, Meta said it would cut nearly 8,000 jobs — about 10% of its global workforce — as it increases spending on AI.
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Why does it matter?
Reuters reported that the dispute could become the first major U.S. case involving claims that AI was used to carry out layoffs.
The outlet said workers claim Meta relied on several internal systems, including "Metamate," an employee-trained "second brain" that tracked communications and documents, as well as a productivity score based on scans of keystrokes, screen content, emails, and browser history. They also allege those systems were not paused during vacations or legally protected leave, which could lower scores for employees who were away for medical or caregiving reasons.
What's being done?
The dispute is now moving into arbitration, where the workers will continue pressing their claims.
Along with their jobs, lawyers argued that the decision could also cost employees stock options and employer-backed health insurance during pregnancies and ongoing medical treatment, Reuters noted.
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The case may also push companies to take a closer look at how automated tools are used in HR decisions, particularly when disability rights, family leave, or medical protections are involved. Even when a company says humans made the final call, the software shaping rankings or recommendations could still face scrutiny.
At stake is how those tools can affect people's jobs, healthcare, and financial stability.
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