April 04, 2024

Lies, Damned Lies, and AI: Lie-Detecting AI May Expose Employers to Liability

4 min

It's that time of year again—hiring season! And right on cue, your director of human resources has scheduled a meeting to pitch you a quick fix: artificial intelligence (AI). As the meeting gets under way, you are quick to express your skepticism. After all, you've recently read that despite the best of intentions, the use of AI in the hiring process may lead to discrimination against certain applicants and may expose employers to potential liability. Brushing your skepticism aside, your director presses on, and, hearing him out, you must admit this new tool could be a game changer: video-interview technology that claims that by watching how applicants answer questions, it can make judgments about their credibility and trustworthiness. In other words, AI lie detection. No doubt, you think, this could boost efficiency. But is it too good to be true? A recent lawsuit suggests that, yes, it very well might be.

Previously, we alerted employers about how the Equal Employment Opportunity Commission (EEOC) is putting employers on notice that it is scrutinizing how employers utilize AI for potential employment discrimination, and warned that liability is not limited to the traditional employer who manages the workforce and issues the paychecks.

Now, as employers across the country continue utilizing AI technology to streamline and automate the recruiting and hiring process, creative plaintiffs' attorneys are seeking to apply time-worn lie detector laws to new video-interview technology.

State Law

Recently, a job applicant in Massachusetts brought a class action lawsuit against CVS Health Corporation and CVS Pharmacy, Inc. (CVS) alleging that the drugstore chain's use of AI in the hiring process without a disclaimer violated a Massachusetts law prohibiting the use of lie detector tests in hiring. According to the complaint, CVS utilizes video-interviewing AI that advertises the "potential to provide the ability to scale your lie detection, screen out embellishers, and home in on those who are actually a fit for the role." Furthermore, the plaintiff alleges that the AI promises to screen for candidates with "an innate sense of integrity and honor."

While AI interview technology may not be the first thing that comes to mind when we think of lie detection and polygraph tests, the Massachusetts ban on lie detection in employment is unmistakably broad. The law defines a lie detector test as:

[A]ny test utilizing a polygraph or any other device, mechanism, instrument or written examination, which is operated, or the results of which are used or interpreted by an examiner for the purpose of purporting to assist in or enable the detection of deception, the verification of truthfulness, or the rendering of a diagnostic opinion regarding the honesty of an individual.

While the Massachusetts law was clearly written well before the advent of AI and the use of AI in the hiring process, its broad scope may enable courts to apply it to automated interviews.

Furthermore, Massachusetts is far from the only state with a law on its books banning employers' use of lie-detection technology. For example, under Maryland law, "an employer may not require or demand, as a condition of employment, prospective employment, or continued employment, that an individual submit to or take a polygraph examination or similar test." Similarly, New York law prohibits employers from requiring or requesting that an employee or applicant submit to a "psychological stress evaluator examination," which New York broadly defines as "any mechanical device or instrument which purports to determine the truth or falsity of statements made by an employee or prospective employee."

Federal Law

Even in states without robust bans on lie detection in employment, employers may still face the possibility of liability under the federal Employee Polygraph Protection Act (the "Act"). Generally, the Act prevents employers from using lie-detecting tests either for pre-employment screening or during the course of employment. Like the state laws mentioned above, the Act contains a fairly broad definition of "lie detector" that includes "a polygraph, deceptograph, voice stress analyzer, psychological stress evaluator or similar device (whether mechanical or electrical) used to render a diagnostic opinion as to the honesty or dishonesty of an individual."

It remains unclear whether courts will be receptive to applying decades-old lie-detection laws to cutting-edge AI. What is clear, however, is that the use of AI in the hiring process is only becoming more prominent, and, as it does, employers must remain vigilant in warding off new causes of potential liability. If your company has any questions about the latest challenges to the use of AI in the hiring process, or how to utilize AI while reducing legal liability and reputational harm, please contact the authors of this article or any attorney in Venable's Labor and Employment Group.