Meta layoffs: US judge refuses to halt job cuts amid AI discrimination lawsuit

Meta has won an early legal victory in a closely watched dispute over the use of artificial intelligence in workplace decisions, after a US federal judge declined to halt the company's planned layoffs of 26 employees who claim AI-driven systems were used to unfairly select them for redundancy.

The ruling allows the Facebook parent to proceed with dismissals that are expected to begin next week, even as the underlying legal challenge continues through private arbitration. The case has attracted attention because it raises broader questions about whether AI-powered workplace tools can inadvertently disadvantage employees who take legally protected leave for health or family reasons.

The employees, who remain anonymous in court filings, argue that Meta relied on a range of AI-assisted systems when determining which roles would be eliminated during its latest workforce reduction. They contend those tools penalised workers who had been away from work due to medical treatment, disability or caregiving responsibilities.

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US District Judge William Orrick, who heard the matter in Oakland, California, rejected the workers' request for an emergency order that would have prevented the layoffs from taking effect before their claims are resolved. However, he left open the possibility of revisiting the issue if new evidence sheds greater light on the company's use of AI in the redundancy process.

Judge leaves room for fresh evidence

The court's decision was based on the legal threshold required for emergency intervention rather than the merits of the employees' allegations. Judge Orrick concluded that the plaintiffs had not demonstrated the level of irreversible harm needed for a temporary restraining order.

At the same time, the judge noted that the court "may reconsider" its position if additional evidence is presented concerning "whether and how AI was used" during Meta's workforce reduction exercise.

Following the ruling, lawyers representing the employees emphasised that the legal battle remains active. In a joint statement cited by Reuters, they said, "The Court expressly stated that it may reconsider its determinations based on any additional evidence the parties provide regarding whether and how AI was used' in the reduction in force."

Meta did not comment on the ruling. The company has consistently denied any misconduct and maintains that human managers, rather than automated systems, made the final decisions regarding layoffs.

Court documents indicate that while the affected employees technically remain on Meta's payroll, they have been locked out of company systems since May and have not been performing their usual duties. Many of the layoffs are expected to be completed on July 22, with additional departures scheduled later in July and August.

Lawsuit puts workplace AI under scrutiny

The employees' complaint alleges that Meta incorporated several AI-assisted tools into its redundancy assessment process. Among the systems referenced are "Metamate", described as a large language model assistant, an employee-built knowledge platform referred to as a "second brain", and a productivity scoring mechanism that allegedly analysed information such as keystrokes, screen activity, emails and browsing history.

According to the lawsuit, the company also assessed employees using measures linked to AI adoption, AI token usage and productivity. The plaintiffs argue that these metrics unfairly disadvantaged workers who had spent extended periods on medical or family leave because they naturally had fewer opportunities to engage with internal AI tools.

The lawsuit further claims that performance-related information continued to be collected while employees were absent on legally protected leave, resulting in lower scores that ultimately influenced layoff decisions.

During this week's hearing, attorney Barbara Cowan argued that the consequences of losing employment extended beyond financial compensation. "There's no do-over for bonding with a new baby or giving birth or having active medical treatment," she told the court, arguing that the timing of the dismissals could cause lasting personal harm.

Representing Meta, lawyer Erin Connell countered that the workers were losing employer-subsidised health insurance rather than healthcare access altogether. She argued that any financial losses could be remedied later if the employees ultimately prevail in arbitration.

The dispute is believed to be the first lawsuit against a major US technology company to directly challenge the alleged use of AI systems in selecting employees for layoffs. As businesses increasingly integrate artificial intelligence into human resources and performance management, the case could become an important test of how existing employment laws apply when automated tools influence decisions affecting workers' careers.