Meta (NASDAQ: META) is being sued by twenty-six of its current and former employees. They sued the company on Monday, July 13, 2026. They claim Meta’s layoff process was driven by an AI system designed to cut workers on medical, pregnancy, or disability leave. The case could set a judicial precedent in an area affecting the whole tech sector: who is accountable when software systems are used for layoffs.The suit, filed in the Northern District of California, was assigned to U.S. District Judge William Orrick. Meta initially informed its staff on May 20 that there would be job cuts at the company.What do the Meta plaintiffs allege?The crux of the matter is how the layoff list was built. Plaintiffs allege that layoffs were left to “a constellation of internal artificial-intelligence systems,” rather than managers who know their jobs pretty well. The internal AI systems included a tool called Metamate, employee-trained “second-brain” agents, keystroke and activity monitoring, AI-token-usage dashboards, and algorithmic performance calibration.The challenge isn’t with the systems themselves but with what they measure. Metrics like code commits, productivity output, and AI-tool usage can only be tracked when an employee is in the seat. Any employee on approved leave would find it impossible to generate any of these metrics. The plaintiffs, therefore, argued that those on protected leave were actually penalized for exercising their legal rights to these leaves.There are specific instances stated in the complaint. One of such instances is when a scientist who happened to be on approved pre-birth pregnancy leave was sacked, two days before her child’s delivery. Another instance is that of a manager who traced his “broken time” to a period when he was injured and had to stay off work. The plaintiffs are from several states in the U.S., including California, Florida, Illinois, New York, Pennsylvania, and Washington. What they all have in common is that each of them had taken, requested, or been approved for protected leave within the past twenty-four months. They made recourse to statutes like the Family and Medical Leave Act, the Pregnancy Discrimination Act, the Americans with Disabilities Act, and state leave laws.Meta’s responseMeta flatly rejects the plaintiff’s argument. The company claims the plaintiff’s case is not based on facts and has no merit whatsoever, adding that Meta’s management decisions are made by people and not AI systems.The plaintiffs are filing their claims individually and not as a class action suit. This is due to the mutual arbitration agreement that all Meta employees are requested to sign. The plaintiffs seek an injunctive relief to suspend their terminations and restore their jobs at Meta.Meta has been cutting staff in its AI pivotThe layoffs are all part of Meta’s push to become an AI-first company. The company has cut 8,000 jobs and reassigned ~7,000 staff to new AI teams to further its goals of becoming AI-friendly. The cuts were made after Meta posted record revenue and raised its capital-expenditure guidance in 2026 to a range of $125 billion to $145 billion, almost twice its 2025 spending figures.At the core of the case is the debate over employee monitoring. Meta’s AI system is described by the plaintiffs as one that captured keystrokes, screen content, mouse activity, browser history, messages, emails, and voice, video, and location data on company devices, using the harvested data to feed Meta’s AI tools. Employees have expressed discontent with the surveillance program, with 1,600 of them signing a petition against the click-and-keystroke tracking. ,Meta faces other layoff-related suits. In a recent case, a former senior director, Nicolas Franchet, claimed that Meta’s 2025 cuts disproportionately affected employees 40 and above.If you're reading this, you’re already ahead. Stay there with our newsletter.