26 Meta Employees Sue, Alleging AI System Discriminated Against Workers on Leave in Layoffs

As of the July 16 close, Meta Platforms (META) was at $664.54, down 2.46% (-$16.77) from the prior close of $681.31. The stock opened at $677.275, hit a high of $681.9, and a low of $660.16. With U.S. markets closed for the holiday, the stock is frozen at that close with no pre-market or intraday movement. Twenty-six Meta employees filed the lawsuit on Monday, July 14, in Oakland, California federal court, accusing the company of using an AI system to screen for layoffs in its May mass cuts, disproportionately targeting workers on medical, parental, or family leave.

Lawsuit Alleges: How the AI System Screened Layoff Targets

The lawsuit details the AI toolchain Meta allegedly used in the layoff process. According to the complaint, Meta did not compile the layoff list through "the careful judgment of managers who know their employees’ work," but instead relied on "a series of internal AI systems" to score, rank, and filter employees.^{[Ars Technica]} These systems included an internal large language model assistant called "Metamate," a "second brain" agent trained on employee communications and documents, an algorithmic productivity score based on data like keystrokes and browser history, and AI-assisted performance evaluation tools.^[Gizmodo]

The complaint specifically notes that an internal dashboard categorized employees based on their use of AI tools, with labels like "AI Native," "AI First," and "AI Enabled."^{[Ars Technica]} These scores and ratings "by their nature, cannot be accumulated by employees on protected medical or family leave, or by employees whose output is reduced due to a disability," the lawsuit claims.^{[CBS News]} Meta allegedly did not account for protected leave when considering employee scores, nor did it "pause the system to conduct the legally required, individualized, leave- and accommodation-neutral review."^[Fortune]

Plaintiff Background: Employees on Leave Disproportionately Targeted

All 26 anonymous plaintiffs had taken protected leave or requested disability accommodations within the 24 months before the layoffs. Though they have received layoff notices, they are still employed by Meta, with a termination date set for July 22.^{[CBS News]} About half had taken caregiver or pregnancy-related leave, including eight women on maternity or pregnancy leave, four men on paternity leave, and one woman who took caregiver leave followed by bereavement leave.^[Fortune]

The lawsuit cites several specific cases: a scientist was flagged by the system just two days before her due date; a manager on approved pregnancy-related disability leave was the only person on her team selected by the system.^[Gizmodo] Another employee disclosed "serious health conditions and a disability" and had received approval from Meta's own vendor, but according to the suit, his manager "discouraged and prevented him from taking the leave," warning it would lead to his selection in the anticipated layoffs.^{[CBS News]}

Legal Basis: Citing Multiple Federal and State Laws

The lawsuit alleges Meta's layoffs violated several federal and state laws, including the Family and Medical Leave Act, the Americans with Disabilities Act, the Pregnancy Discrimination Act, and the Pregnant Workers Fairness Act.^{[CBS News]} The complaint also invokes the long-standing civil rights concept of "disparate impact liability," which holds that a seemingly neutral policy or practice can be discriminatory if it disproportionately burdens a protected class of employees and is not job-related.^{[CBS News]}

Notably, the Trump administration has ordered federal agencies to deprioritize enforcement of disparate impact liability, arguing its use undermines "meritocracy."^{[CBS News]} However, the suit points out that despite the government's efforts to curb its enforcement, companies still face disparate impact litigation risk in the AI era. The plaintiffs' lawyers argue that Meta's "algorithm-assisted selection process, by systematically recording such absences as a decline in performance, has a greater impact on women than men," as women are more likely to take pregnancy- and parenting-related leave.^{[CBS News]}

Meta Response and Next Steps

Meta denied the allegations in statements to multiple media outlets. "These allegations are without merit and not based on facts," a Meta spokesperson told Gizmodo. "Personnel management and organizational decisions are made by people, not AI."^[Gizmodo] The company offered no further comment on the lawsuit.^{[Ars Technica]}

The plaintiffs are seeking a preliminary ruling to block Meta from completing the layoffs on July 22, giving them time to resolve their claims through private arbitration. Under Meta's employee agreement, workers must resolve workplace disputes individually through arbitration, but the plaintiffs argue the agreement does not apply to requests for temporary relief.^[Gizmodo] According to Reuters, this appears to be "the first lawsuit challenging the use of AI in layoffs against a major U.S. company."^[Reuters] The suit comes months after Meta was sued by another former employee alleging the company disproportionately targeted older workers in its February 2025 layoffs.^[Gizmodo]

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