Feds Intervene in xAI’s Lawsuit: Colorado’s AI Anti-Discrimination Law Is Unconstitutional, DOJ Argues

The U.S. Department of Justice has moved to intervene in a lawsuit brought by xAI challenging a Colorado law that regulates the use of artificial intelligence in decision-making systems.

The case centers on a 2024 state statute, known as SB24-205, which imposes requirements on developers and users of certain AI systems. The law applies to tools used in areas such as mortgage lending, hiring and college admissions, and requires companies to take steps to prevent discriminatory outcomes, as well as to meet disclosure and reporting standards.

Federal officials argue the law violates the Equal Protection Clause of the Fourteenth Amendment. In its filing, the Justice Department contends that requiring companies to address potential disparate impacts—outcomes that may disproportionately affect certain groups even if unintended—amounts to an unconstitutional mandate tied to race or sex. The department also raised concerns about a provision that exempts some uses of AI designed to promote diversity or address past discrimination.

The lawsuit was initially filed by xAI on April 9, seeking to block enforcement of the statute. The company argues the law imposes burdensome and unclear requirements on AI developers.

Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division said the federal government is challenging what it views as unconstitutional provisions in the law. Assistant Attorney General Brett A. Shumate of the Civil Division said the measure could affect the development and use of AI technologies.

“Laws that require AI companies to infect their products with woke DEI ideology are illegal,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “The Justice Department will not stand on the sidelines while states such as Colorado coerce our nation’s technological innovators into producing harmful products that advance a radical, far left worldview at odds with the Constitution.”

“America’s success in the AI race will depend on removing barriers to innovation and adoption across sectors,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “Laws like Colorado’s that force AI models to produce false results or promote ideological bias threaten national and economic security and must be stopped.”

Colorado officials have not yet publicly responded in court filings to the Justice Department’s motion to intervene.

You can view the lawsuit here.

Fake Email, Real Bias: DOJ Sues Cloudera for Shutting Out U.S. Workers While Favoring Visa Holders

The U.S. Department of Justice has filed a lawsuit against Cloudera Inc., alleging the company discriminated against U.S. workers in its hiring practices for certain technology jobs.

The complaint, filed with the Office of the Chief Administrative Hearing Officer, accuses the California-based firm of violating the Immigration and Nationality Act by favoring workers on temporary visas over U.S. applicants.

“Employers cannot use the PERM sponsorship process as a backdoor for discriminating against U.S. workers,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “The Division will not hesitate to sue companies who intentionally deter U.S. workers from applying to American jobs.”

According to federal officials, Cloudera created a separate recruitment process for positions it intended to fill through the permanent labor certification, or PERM, program. The lawsuit alleges the company took steps to discourage U.S. workers from applying, including directing applicants to submit materials to an email address that could not receive external messages.

Main Allegations

Cloudera created a separate, discriminatory hiring process for at least seven PERM‑related positions between March 31, 2024 and January 28, 2025.
U.S. workers were effectively blocked from applying because Cloudera required applications to be sent to an email address that did not accept external messages.
Applicants received bounce‑back errors such as: “the group you tried to contact may not exist, or you may not have permission to post messages to the group.”
Cloudera did not advertise these PERM jobs on its normal careers website and did not allow applications through its standard online system.
For at least nine months, Cloudera received zero external applications and made no effort to investigate why.
Despite this, Cloudera certified to the Department of Labor that it had conducted good‑faith recruitment and found no qualified U.S. workers.
Cloudera’s actions favored temporary visa holders and were allegedly designed to ensure PERM sponsorships could proceed without competition from U.S. workers.
The DOJ’s Immigrant and Employee Rights Section found reasonable cause that Cloudera engaged in a pattern or practice of citizenship‑status discrimination.

Legal Theory

The complaint is grounded in violations of the Immigration and Nationality Act (INA) and Department of Labor PERM regulations:

Citizenship‑Status Discrimination (INA § 1324b)

The INA prohibits employers from treating U.S. workers less favorably in hiring or recruitment based on citizenship or immigration status.
The DOJ alleges Cloudera intentionally created a hiring process that excluded U.S. workers, constituting a pattern or practice of discrimination.

Failure to Conduct Good‑Faith Recruitment (PERM Requirements)
Employers must genuinely recruit U.S. workers before sponsoring a temporary visa holder for permanent residency.

Failure to Conduct Good‑Faith Recruitment (PERM Requirements)

Employers must genuinely recruit U.S. workers before sponsoring a temporary visa holder for permanent residency.
Cloudera allegedly misrepresented its recruitment efforts by certifying that no qualified U.S. workers applied, despite using a nonfunctional email system that prevented applications.
This undermines the PERM process, which requires employers to attest—under penalty of perjury—that U.S. workers were considered and rejected only for lawful, job‑related reasons.

3. Creating a Separate, Less Favorable Hiring Process for U.S. Workers

By diverting PERM‑related applicants to a broken email address and excluding these jobs from its normal hiring channels, Cloudera allegedly treated U.S. workers differently from other applicants.
This separate process is the basis for the DOJ’s claim of unfair immigration‑related employment practices.

This separate process is the basis for the DOJ’s claim of unfair immigration‑related employment practices.

Federal prosecutors allege that Cloudera did not conduct a good-faith effort to recruit U.S. workers for the roles, as required under the PERM program. The program allows employers to sponsor foreign workers for permanent residency, but only after testing the labor market and demonstrating that no qualified U.S. workers are available.

Cloudera has not publicly responded to the allegations in the lawsuit.

Read lawsuit here.