Artificial Intelligence (“AI”) has become intertwined with business operations and management in rapid and breathtaking new ways.  However, with such rapid growth and adoption comes new legal pitfalls for businesses.  New Jersey has just issued a clear warning to New Jersey businesses: your AI can get you sued for discrimination.  

On January 9, 2025, the New Jersey Office of the Attorney General and the Division of Civil Rights issued guidance related to algorithmic discrimination, clearly stating that such discrimination falls under New Jersey’s Law Against Discrimination (LAD). In other words, the resulting use of AI in the workplace is subject to legal scrutiny by the New Jersey Attorney General and they plan to enforce it.

According to new guidance, “In recent years, businesses and governments across the country have started using automated tools to make decisions that affect key aspects of our lives — who is hired or receives a promotion…If these tools are not designed and deployed responsibly, they can result in algorithmic discrimination.” Algorithmic discrimination is illegal discrimination on the basis of “actual or perceived race, religion, color, national origin, sexual orientation, pregnancy, breastfeeding, sex, gender identity, gender expression, disability, and other protected characteristics” that is caused by the use of “automated decision-making tools.”

Thus, if your business employs AI or other automated tools that take discriminatory actions, that technology can lead to a discrimination lawsuit against your business under the NJ LAD.  For example, if your business uses AI to screen resumes of potential employees, and that algorithm screens out older applicants, women, or individuals with disabilities, your business could be liable for discrimination under the LAD.

So, if your AI tools are not carefully designed, evaluated and tested – even if the tools was designed by a third party – their use could result in disparate treatment discrimination, disparate impact discrimination or failing to provide reasonable accommodations.

For more information about how to protect your business from algorithmic discrimination, or if your business is facing a lawsuit related to algorithmic discrimination, please contact PTGB Law at 201-569-5959. And our expert employment attorney will be able to contact you.