Eightfold AI Sued for Allegedly Violating FCRA with Secret Job Seeker Scoring - MSFT, PYPL

Eightfold AI, a VC-backed hiring platform used by Microsoft (MSFT) and PayPal (PYPL), faces a class-action lawsuit in California for allegedly generating covert applicant assessments without disclosure or dispute rights, violating the Fair Credit Reporting Act (FCRA) and California law. Plaintiffs Erin Kistler and Sruti Bhaumik claim Eightfold built talent profiles assigning personality traits like "team player" or "introvert," ranked education quality, and predicted future roles—without applicants’ knowledge. The suit argues such practices deny job seekers the right to review or correct data, a violation of longstanding consumer protection laws. No AI exemption exists, plaintiffs assert. The complaint was filed in California state court on January 21, 2026, on behalf of all U.S. job seekers evaluated using Eightfold’s tools. They are represented by Outten & Golden and nonprofit Towards Justice. Eightfold, backed by SoftBank Vision Fund and General Catalyst, has not commented. Microsoft declined to comment; PayPal did not respond to requests.