Meta is being sued over allegations that the company used artificial intelligence tools to identify and target employees with medical conditions during its recent rounds of layoffs. The lawsuit raises pointed questions about what happens when companies let algorithms make decisions that affect people’s livelihoods, and whether AI-driven workforce management can comply with disability discrimination laws.

What happened

The lawsuit alleges that Meta’s layoff process incorporated AI-assisted evaluations that disproportionately flagged workers with medical conditions for termination. In English: the algorithm may have treated health-related factors, like leave patterns or accommodation requests, as signals that an employee was less productive or less essential.

This isn’t Meta’s first rodeo with layoff-related litigation. A separate lawsuit filed by former employee Nicolas Franchet claimed that Meta’s workforce reductions disproportionately hit older workers. That suit alleged employees over 50 were 2.5 times more likely to be laid off than their younger colleagues.

Meta’s 2025-2026 restructuring plan was sweeping by any measure. The company planned to cut 10% of its workforce, transfer roughly 7,000 employees into different roles, and eliminate approximately 6,000 open positions entirely.

Courts have previously scrutinized Meta’s handling of departing employees. Past rulings criticized the company’s severance agreement language for violating labor rights protections.

Why AI in layoffs is a legal minefield

Federal disability discrimination law under the Americans with Disabilities Act prohibits employers from making adverse employment decisions based on an employee’s disability or medical condition. The Equal Employment Opportunity Commission has been increasingly vocal about the risks of algorithmic bias in hiring and firing, issuing guidance that employers can be held liable for discrimination even when the bias originates from a third-party AI tool.

A pattern of legal trouble

Meta’s labor controversies extend well beyond US borders. The company has faced lawsuits and workforce disputes in Kenya related to its outsourcing of content moderation work.

The Franchet lawsuit’s claim that workers over 50 faced 2.5 times the layoff risk is particularly relevant here. If the same AI evaluation system produced both age-skewed and disability-skewed outcomes, it suggests the tool may have had fundamental issues with how it weighted factors correlated with protected characteristics.

What this means for investors and the broader tech industry

The EU’s AI Act classifies employment-related AI as “high risk” and imposes strict transparency and testing requirements.