Employee Survival Guide® - Illegal AI Job Applicant Screening: EEOC v. Itutor Group and DHI Group Settlements

Episode Date: March 17, 2025

Comment on the Show by Sending Mark a Text Message.Age discrimination in the digital workplace takes an alarming turn when algorithms become the gatekeepers of opportunity. The landmark case against iTutor Group reveals how technology can systematically exclude qualified workers based solely on age—with women over 55 and men over 60 automatically rejected by software regardless of their teaching qualifications or experience.When applicant Wendy Pincus discovered she was rejected but later offered an interview after reapplying with a younger birth date, she exposed a troubling reality facing many older workers in the digital economy. The Equal Employment Opportunity Commission's investigation uncovered evidence that over 200 qualified applicants were similarly denied consideration based on age thresholds programmed into hiring algorithms.At the heart of this case lies a critical question that affects millions of remote workers: does the traditional distinction between employees and independent contractors still make sense in the digital age? iTutor Group attempted to evade age discrimination laws by classifying its tutors as contractors despite controlling their schedules, lesson plans, and monitoring their work through video—highlighting how companies may use classification loopholes to circumvent worker protections.The $365,000 settlement represents more than just compensation—it signals that discrimination laws apply even in virtual workplaces. As remote work continues expanding globally, this case establishes important precedent for how anti-discrimination protections extend into digital environments.Perhaps most fascinating is technology's dual role as both problem and potential solution. While iTutor Group allegedly used algorithms to discriminate, other companies are now implementing AI to detect and prevent bias in hiring processes—raising complex questions about privacy, ethics, and the future of work. Who's monitoring your job application, and what criteria are they really using to evaluate you? If you enjoyed this episode of the Employee Survival Guide please like us on Facebook, Twitter and LinkedIn. We would really appreciate if you could leave a review of this podcast on your favorite podcast player such as Apple Podcasts. Leaving a review will inform other listeners you found the content on this podcast is important in the area of employment law in the United States. For more information, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150, www.capclaw.com.Disclaimer: For educational use only, not intended to be legal advice.

Hey, it's Mark here and welcome to the next edition of the Employee Survival Guide where I tell you as always what your employer does definitely not want you to know about and a lot more. All right, let's dive in. We've got a pretty interesting case this time around, some legal documents and press releases all about this company, iTutor Group. I tutor group, yeah. They provide online English tutoring.

Right. Mostly connecting tutors here in the US with students in China. Yeah. But things get a little messy here because there are accusations of age discrimination. It is a fascinating case. We've got court filings from the EEOC, that's the Equal Employment Opportunity Commission, the agency that investigates these kinds of claims,

and from ITUDA Group itself. We also have some press releases, each side trying to control the narrative, and a docket report which gives us a timeline of what happened in court. So a lot to unpack here. Our goal is to really walk you through what happened, what each side argued,

and what it all means for folks who work online. Right. Especially when it comes to age discrimination. Exactly. To understand the case, we really need to understand how iTutor Group operates. Okay, okay. So we're actually talking about

three interconnected companies, all under the iTutor Group umbrella. They were hiring tutors here in the US to teach English online. Right now? And these tutors could work from their homes or anywhere with an internet connection. Sounds pretty convenient. Very much so. Yeah.

But that's where things take a bit of a turn. The EEOC stepped in and filed a formal complaint. Right. Alleging that iTutor Group was using software to automatically reject any applicant over a certain age Yeah, we're talking 55 for women 60 for men pretty blatant Yeah, that's pretty hard cut off and a pretty clear violation of the ADA the age discrimination and employment act Right which protects folks 40 and over from discrimination in all aspects of employment. Gotcha

So the EUOC was using this law to argue that iTutor Group was breaking the rules. OK. And they had some compelling evidence to back that up, right? Didn't they highlight a specific person's story? Yeah, they did. They used the story of Wendy Pinkus. OK.

She applied to be a tutor with iTutor Group and was immediately rejected. Wow. But she reapplied using a younger birthdate. Oh, interesting. And guess what? She was offered an interview. Really? Yeah. This combined with data that over 200 qualified applicants over the age of 55 were automatically rejected by the software really helped build the EEOC's case. So how did iTutor Group respond? Did they try to explain these age cutoffs? Well in their

response to the complaint they denied the allegations point by point. Okay, so basically pleading not guilty, but did they offer any specifics to back up their position? Not really. They claimed to have legitimate business reasons for their actions, but those reasons weren't specified in the documents. They also hinted that maybe the applicants hadn't done enough to lessen any potential harm. Okay. And they also suggested that the EEOC's demands were a little bit over the top. So a lot of legal maneuvering there.

Yeah. But there's one argument they made that I found really interesting. They tried to claim that the tutors weren't employees, but rather independent contractors. This is a key point because it gets to the heart of how worker classification affects legal protection. Because the ADEA that law protects employees. Okay. So the question is are these people employees or not? Especially in the world of online work where more and more people are working remotely setting their own hours taking on these project-based gigs.

Exactly. So ITUTER Group, even though they were controlling things like lesson plan schedules, even videotaping the sessions, they were still trying to say these individuals weren't technically employees. That's right. And this really raises a very interesting question of how we define employees, especially in an increasingly digital world, where the line between employee and contractor can be pretty blurry. Yeah, we'll have to come back to that because I think that has huge

implications for worker rights. Huge. But before we get too deep into that, let's get back to the iTutor group case. What happened with all this back and forth? Did it go to trial? Well, ultimately it was settled with a consent decree. Okay, so what does that mean? It means iTutor group agreed to certain terms but they didn't admit any wrongdoing The classic we're not saying we're guilty, but we'll pay you to go away, right? So what did this settlement involve? Well it tutor group agreed to pay? $365,000 which was to be distributed among those who were potentially affected by the hiring practices

That's a significant amount of money. It is. But aside from the money, did iTutor Group have to change anything about how they did business? They did, even though they had stopped hiring tutors in the U.S. by that point. They agreed to put anti-discrimination policies in place and provide training on those policies. And if they ever decided to start hiring in the U.S. again, they would have to notify and interview anyone that they had previously rejected. Interesting.

Particularly those they might have rejected because of their age. I see. Smart move on their part if they ever plan to come back to the US market. You know, this whole situation reminds me of another case involving the EEOC and a company called DHI Group, which runs the website Dice.com. Yes. A pretty popular job search platform. And in that case, the EEOC found that the company was allowing employers to post job

ads that discriminated against certain people based on their national origin. Yeah. Specifically, whether they were American or not. That was a key factor. So it wasn't DHI themselves discriminating, but they were providing a platform for others to do it. Yeah, that's the gist of it. And what's interesting is that as part of their settlement,

DHI agreed to use artificial intelligence, or AI, to scan job postings and flag any potentially discriminatory language. Yeah, they're trying to essentially automate the detection of discrimination. AI policing job ads. That's both impressive and kind of unsettling at the same time.

It is. It really raises some interesting questions about how technology can be used to combat discrimination. Huge questions. Huge questions. Could this type of AI be applied to other parts of the hiring process? What are the ethical implications?

A lot to ponder there for sure. But let's circle back to that distinction ITUDA Group was trying to make, employee versus independent contractor. It seems like that's at the heart of a lot of these issues. It is. And in part two, we're gonna explore exactly why that distinction matters,

especially in the context of discrimination laws. We'll also look at what it could mean for the future of work, where more and more people are finding jobs online. Looking forward to it. Yeah. Stay tuned. Okay. So we're back and ready to dig into this employee versus independent contractor

thing. Right. It sounds like it gets pretty complicated, especially with these online jobs, these discrimination laws. Yeah, it definitely can be a thorny issue. As we mentioned before, the ADEA is there to protect employees. Right. But when you have someone working as an independent contractor, those protections might not apply. So iTutor Group was basically trying to argue that they were off the hook because their tutors weren't technically employees. Right. But it seems kind of tricky because they had so much control over how those people worked.

Yeah, that's where the legal waters get a little bit murky. Okay. Because there isn't one simple test to determine if someone is an employee or an independent contractor. Courts and agencies like the EEOC look at a lot of different factors. So what are some of the things they look at? Is it just whether you work from home or set your own hours? No, no.

It's definitely more complex than that. One of the most important things they look at is the level of control the company has over the worker. So for example, if the company dictates the worker's schedule, tells them how to do their job, provides all the tools and materials, that points towards an employment relationship. And it sounds like that aligns with what we know about iTutor Group. They set the schedule, they provided the lesson plans, they even monitored the sessions by video.

Exactly. Does it sound very independent? No, not really. Okay. So other factors they look at include whether the worker is integrated into the company's operations, the nature of the relationship between the two parties, how payment is handled, and whether the work requires specialized skills. Gotcha. So it's really about the big picture, not just a couple little details.

Exactly. It's about the totality of the circumstances. And in this case, even though a tutor group said these tutors were independent contractors, the EEOC argued, and I think pretty convincingly, that the company had enough control over their work to call them employees and therefore bring them under the protection of the ADEA. So that's why they settled, even though they didn't admit wrongdoing. They knew they were playing with fire. And this whole situation, it kind of makes you wonder about gig workers and how vulnerable they are to discrimination.

Because if they're considered independent contractors, they might not have those legal protections. Absolutely. That's a huge concern, especially with the rise of remote work and these online platforms. It makes you wonder if our laws are really equipped to deal with the changing nature of work. It's not your typical nine to five office job anymore. No, it's not.

Policymakers and legal experts are definitely grappling with these questions as technology transforms the way we work. I mean, are we even going to have offices in the future? That's a good question. I don't know. But we need to make sure the laws keep pace to protect workers from discrimination, regardless of where or how they do their jobs. So it feels like this case is just the tip of the iceberg.

Yeah, I think so. What are some of the bigger implications for the future of work? Well, for one, it shows how important it is for companies to be really careful about their hiring practices, even if they operate online or use remote workers. They can't just hide behind algorithms

or automatically label everyone as a contractor. Right. And for anyone out there looking for work online or in the gig economy, it's a good reminder to know your rights and to understand the risks of being an independent contractor. Absolutely. This case also raises important questions about how technology can both contribute to and potentially help fight discrimination. A double-edged sword.

It is. We saw how ITUTER Group allegedly used software to screen out older applicants. But we also saw how DHI Group is using AI to try to prevent discriminatory language in those job postings. So technology can be used for good or for bad. And it's up to us to make sure it's being used responsibly. I completely agree. You know, speaking of DHI and using AI to monitor job postings, this brings up a really interesting question. Could similar technology be used to monitor

other aspects of the hiring process? You mean like analyzing application data, interview transcripts, even social media profiles, to look for potential bias. That's right. It's a fascinating idea. It is. But also a little bit scary. It does raise some serious questions about privacy and the potential for these systems to be misused.

But on the flip side, if these AI systems are designed and used responsibly, with transparency and fairness in mind, they could be incredibly powerful tools in the fight against discrimination. So it's a tough balance to strike, harnessing the power of technology without compromising our values or our individual rights. That's the challenge and the opportunity I think we're facing. It is. Hopefully this deep dive into the ITUDA Group case

and the broader issues we've discussed has given you a better understanding of the complex issues at play. It has. When it comes to age discrimination, employee classification, and the role of AI in hiring. It feels like uncharted territory. It does.

As technology keeps changing the way we work. It is definitely changing rapidly. But this case gives us some valuable insights and things to think about as we move forward. I agree. Wow, we've covered a lot of ground in this deep dive. We have. Age discrimination, employee classification, AI and hiring. It feels like everything's sort of converging

in this world of online work. Yeah, it really does. The iTutor Group case really just highlights all these challenges we face as our laws and really our understanding try to keep up with this digital world. It's like trying to fit a square peg in a round hole, right? We're trying to apply these old rules

to this new way of working. I mean, think about it. The ADEA was enacted back in 1967, long before remote work or online platforms like iTunes groups even existed. That's right. So the question is, how do we bridge this gap? What needs to happen to make sure workers are protected in this digital age? Well, legislative reform seems like an obvious step, right? Couldn't Congress update the ADEA to specifically include independent contractors? Or maybe even create new laws tailored to

the gig economy? Yeah, those are definitely possibilities. laws tailored to the gig economy. Yeah, those are definitely possibilities. Updating the legal framework could give us clearer guidelines and stronger protections for workers who don't bit those traditional employment models. But legislation can be a slow process. It can be very slow. So while we wait for the lawmakers to catch up, what can we do? Well, the courts will continue to play a crucial role. They'll be the ones interpreting these laws and applying them to new situations. Right, like we saw with iTutor Group.

Exactly. As more cases like this go through the system, they'll help establish precedence and refine our understanding of how these laws work in the digital world. So it's a combination of legislation and court decisions that will really shape the future of work in this new landscape. That's right. And it's not just up to lawmakers and judges. Companies have a responsibility too.

They need to make sure their hiring practices are fair no matter how they classify their workers. So what can they do? What are some steps companies can take? Well, for one, they can be more proactive about designing algorithms and AI systems that minimize bias. Being transparent and thinking carefully about potential problems is key. But even beyond that, they can foster a culture of inclusivity, valuing diversity and equal

opportunity for everyone. It sounds like we all have a role to play in creating a fairer future of work. We absolutely do. Before we wrap up, I want to circle back to the idea of using AI to monitor for bias in hiring. It's a complex issue, and it has a lot of potential, but it also raises ethical questions. You know, I'm still a little unsure about that. I see the potential benefits.

But the idea of AI scrutinizing applications, interviews, even social media profiles, feels a little too big brotherish. I understand your concerns. It's definitely something we need to approach carefully. We know that AI can sometimes perpetuate existing biases if it's not developed thoughtfully. Right. But if we can build AI systems that are transparent and accountable and designed with fairness as a core principle, then they could be really powerful tools to fight discrimination.

So it's about finding that balance. It is. We want to use technology without sacrificing our values or our rights. Exactly. That's the challenge and that's the opportunity. We've got a lot to think about. Hopefully this deep dive into iTutor Group and all these broader issues has given you a better understanding of what we're dealing with.

Oh, it definitely has. It's a reminder that the old rules don't always apply in this new world of online work. They don't. And it's a call to action for everyone, lawmakers, judges, companies, and individuals. We need to be aware, think critically, and work together to make sure there's fairness and opportunity in this digital age. I couldn't agree more. The future of work is being written right now, and it's up to all of us to make sure it's a future where everyone can thrive. Thanks for joining us on this Deep Dive. Until next time. If you like the Employee Survival Guide, I'd really encourage you to leave a review. We try really hard to produce information to you that's informative, that's timely,

that you can actually use and solve problems on your own and at your employment. So if you'd like to leave a review anywhere you listen to our podcast, please do so. And leave five stars because anything less than five is really not as good, right? I'll keep it up. I'll keep the standards up. I'll keep the information flowing at you. If you'd like to send me an email and ask me a question, I'll actually review it and post it on there. You can send it to mcaru at capclaw.com.