CrowdFlower Lawsuit Could Change Crowd Labor Industry Forever

29 Jul

Should crowd laborers be paid as contractors or employees? According to Christopher Otey, who has launched a lawsuit against crowd labor platform CrowdFlower, the answer is the latter. The results of this suit could carve a huge gash in the face of crowd labor providers, and forever change how the industry functions.

The Rundown

I’ve reported on this case before, back when I was writing for Ziptask, and you can see the full article there. The gist is that CrowdFlower, much like Amazon Mechanical Turk, is a labor platform where workers perform “tasks” for employers and receive payment according to how many they complete. It’s typically not a substantial amount of money;  CrowdFlower’s own CEO has allegedly claimed that its workers are paid far below minimum wage, sometimes as low as $2 an hour.

This does not sit well with Otey, who submits that CrowdFlower’s workers should be classified as employees and receive all the monetary benefits that go with that status. He has launched a lawsuit against the crowd labor provider, and intends to obtain collective and class-action status for it, which would allow other people to join in if they also feel that CrowdFlower has treated them unfairly.

Deciding Factors

I’ve personally spoken to representatives from both sides of this case. On the CrowdFlower side, we have Rich Arnold, the Chief Financial Officer of the company, who claims that Otey’s contributions and relationship with the company are nowhere near the level that would qualify him as an employee. Otey had contributed less than twenty hours of work to CrowdFlower in the two years he worked for the site, and had also done work for many other sites like CrowdFlower. As such, he was not solely dependent on their compensation as his primary source of income. He had also failed to develop the worker/employee relationship that typically defines these arrangements; prior to this suit, Otey had not met and could not name a single person working for CrowdFlower, and no one from the site had ever heard of him, either.

Otey’s representative, labor law attorney Mark Potashnick, approaches the issue with a more big-picture perspective, viewing Otey as a stand-in for the millions of individuals contributing to CrowdFlower. These individuals, he states, do the bulk of CrowdFlower’s work, making the site completely reliant on them. Their contributions are essential to CrowdFlower’s business model, and as such, they are as crucial as any traditional employee would be. He also cites a number of other Ninth Circuit and Fair Labor Standards Act factors that would place Otey and those like him squarely in the “employee” category.

It seems like the primary deciding factor, however, will be the amount of control CrowdFlower has over its contributors while they complete tasks for the site. One of the main sticking points may be how each side defines “control”. Arnold reminds us that by the nature of crowd labor, much of the control is in the hands of the contractor in that they have the ability to decide where and when they work, and on what projects. Whether they’re passing the time completing tasks at Starbucks on their lunch breaks, or completing them at home in their underwear while watching Pulp Fiction, the power is ultimately in the workers’ hands.

Potashnick would rather direct our attention to the rigorous methods CrowdFlower has of vetting their contributors, grading their labor, and assigning high-level tasks. Through the sophisticated infrastructure CrowdFlower has set up, they have all sorts of powers, Potashnick claims, that are not dissimilar to those one would find in a traditional employer. They can track success rates of individual workers to provide feedback, or exclude them from certain jobs altogether if their skills prove unworthy. Again, since the two sides are approaching this topic from very different perspectives, it is difficult to tell which side has more heft to their arguments.

Further complicating matters are recent discovery rulings passed down to CrowdFlower, barring them from further investigating the work history of Otey. The court has ruled that such knowledge is irrelevant to the case, and that the only thing that matters is the relationship between CrowdFlower and Otey.

Endgame: The Fate of an Industry

No matter who wins the suit, crowd labor’s role in the workforce could be forever altered. There are multitudes of sites that operate under a similar structure as CrowdFlower. If it’s found that Otey, and by extension those like him, are employees rather than contractors, the ramifications would be far-reaching.  This ruling would force CrowdFlower to bar its contributors in the U.S. from taking on low-paying tasks. Other companies similar to CrowdFlower may find themselves forced to close up shop rather than face the dramatic restructuring this verdict would require.

On the flip side, if it’s found that Otey and his ilk are indeed contractors, the exact opposite would occur. The precedent set by this case would protect companies similar to CrowdFlower, instead of undermining the very concepts that helped them flourish in the first place.

I found myself at a difficult crossroads when considering which side of this case has more leverage. The fact that the industry will be forever altered, regardless of the verdict, put me in a position where I really had to consider what either side’s victory would represent. A win for the plaintiffs would force some crowd labor sites to restructure and others to cease existing, but would also bring them in line with modern-day U.S. labor laws and perhaps even cement those remaining as a legitimate way to earn a living.

A victory for the defendants, on the other hand, would establish that there is a place in America for this type of labor. I like to think of crowd labor as akin to a snack vending machine; the work is convenient and there when you need it, and anyone can access it, but it’s not really substantial. It’s best used to supplement a main source of income, or as filler when you don’t have one, and I think such a service is unique and useful. Were there a defendant victory, I would love to then see U.S. labor laws restructured to allow such companies to continue comfortably existing.

Either way, I’ll be keeping a close eye on this case as it continues developing. I just hope I don’t have to watch the industry that I love die a slow, red-tape-swaddled death.

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11 Responses to “CrowdFlower Lawsuit Could Change Crowd Labor Industry Forever”

  1. Musical_Life August 2, 2013 at 3:03 am #

    I’m on SSI, the fact that CS work exists means that I have a loophole in a system that has far too few for those in my situation. If Otey were to get his way and have things restructured that loophole for me and others like me would quickly close. [Otey] Wants minimum wage but doesn’t understand the price that such things would come with, even for those with full paying jobs.

    • Seth Weinstein August 2, 2013 at 1:40 pm #

      I agree; while CS work is not for everyone, the people who need it find it to be a uniquely useful service.

      You should check out the discussion on the MTurk forums about this article, I feel like they would be very receptive to your story.
      (http://mturkforum.com/showthread.php?8386-CrowdFlower-Lawsuit-Could-Change-Crowd-Labor-Industry-Forever)

    • tcgirl7 August 24, 2013 at 9:19 pm #

      It is a great source of extra income for those who are disabled and on disability. I think that you can make up to $200 a month or something like that without worrying about it affecting SS benefits (not sure about SSI). And the flexibility is an outstanding reason to improve and keep CS work going for everyone.

      I’m all for trying to get an increase in what we get paid doing CS work, but regulating it as a “employer/employee” relationship isn’t it. I’m not sure that any regulation would help. Overall I think it would harm the industry.

      Otey wants minimum wage and he has the same right as everyone else to refuse to work for less. He had no contractual obligation to Crowdflower or anyone else to perform any tasks making less than minimum wage.

  2. Bob August 7, 2013 at 8:04 pm #

    I work along side a company that has a very similar pay structure (I’ve never heard of the company in this article though). My story isn’t like the previous commenter. I am just your average American who is capable of working at a “standard” place of employment. I chose to quit standard jobs (I was fully employed) to work in the cloud as a contractor. I don’t have any children or any circumstances to cause this type of work to be required or overly preferred.

    That being said, I actually am for the contract pay and for CrowdFlower just based on what I know from this article. Working at this capacity, you are able to choose what you do, when, and how you do it. If I want to take a week off then I can. I don’t have to report to any one. (I do, its courtesy, of course.) If I don’t want to do something, I can respectively decline. If it’s not paying enough, I can respectively decline.

    Do I agree with $2 an hour? No! However, the community will level things out. Not many folks are willing to work for $2 an hour. If you don’t have people willing to work for that amount, the company will have no choice but to pay out more in order to keep the (contracted) staff needed to do the job.

    It’s simple economics and follows the same theories as supply and demand.

    • Seth Weinstein August 7, 2013 at 10:20 pm #

      I too support the existence of companies that operate along the lines of CrowdFlower and the like.

      I’m not so sure, however, that the community will “level things out”. While you, personally, may not be willing to work for $2 an hour, CrowdFlower is a global service. Somewhere on Earth, there are absolutely people who would not only work for those prices, but would be thrilled to do so.

      But as for the rest of your comment, I can’t find anything I don’t agree with. I love the freedom and self-sufficiency cloud labor offers.

      • Smash August 20, 2013 at 4:54 pm #

        So companies like CrowdFlower decide they are above/beyond US labor laws and don’t have to pay established minimum wages like everybody else? Accordingly, $2 per hour is heralded as a good thing for workers? What nonsense. It’s because of exploitative companies like this that labor laws were passed in the first place.

      • tcgirl7 August 24, 2013 at 9:08 pm #

        I have to agree that the community will not level out as long as there are people willing to work for less. Especially with the disparity in such factors as the value of the dollar, cost of living, and economic conditions in the world.

        I would like to see more sites that are US based hiring US workers for Crowdsourcing & Freelance. I think it would help the US economy for more companies to hire US workers for jobs when possible.

        I don’t particularly like Crowdflower tasks (have nothing against the company itself) mostly because of their QC and they are not a profitable option for me for a number of reasons. Quite a few of their tasks are low paying and their interface is slow and cumbersome on my slow connection (high speed, high lag). Preferring not to make $2/hr is my choice just as not accepting a contract or odd job for $2/hr is my choice. It’s also my choice to accept them.

  3. tcgirl7 August 24, 2013 at 8:46 pm #

    Actually the point is not that $2/hr is a good thing. This is about independent contractor vs employee. And our choices in performing CS tasks. Would I work for $2/hr? Not unless it was just something fun or interesting to do, or I’m bored. In that case it’s not a job. It’s a hobby.

    To turn CS into a job it takes work just like any other contract or freelance job. You have to find your stable of clients, figure out what is profitable, perform to the clients satisfaction, and be prepared to have some lean times starting out.

    It’s not a job you sign up for online and then sit down and expect to get an hourly wage. You don’t work for a single company. I’ve performed tasks for more than 400 CS providers in the last year. Imagine filling out 400 employment applications, W-4′s, etc. Then filing W-2′s for 375 companies that you made less than $10 for. Another 25 that you made less than a $100 for and maybe 1-5 that you made $300 to $1000 for. I like filing self employed with just my income statement and a few 1099′s.

    I usually perform CS tasks that make $6/hr+ actually working on the tasks themselves. I just finished a CS project yesterday where I made $400 in about 4 days at a little over $13/hr. Today I can’t find anything above $5/hr.. So I think I’ll go clean out the garage. That’s my choice. No one is forcing me to accept less than minimum wage.

    There are a lot of factors in CS earnings. Among them are the skill level of the person performing the tasks, internet speed, how fast you are at correctly performing the tasks,etc. The faster and more accurate you are the more money you can make. I may be able to make $12/hr on a task that Jane Doe has absolutely no aptitude for and she makes $4/hr. It’s Jane’s choice to perform those tasks or not.

    I’d like to see outrageously low paying tasks disappear. This lawsuit is not the way to improve things. I see it taking away our control of when, where, and how long we spend performing tasks. Performing tasks for recreational “fun” and extra spending money will be a thing of the past.

    I can see a majority of CS tasks moving almost completely outside the US if this lawsuit is won unless they stipulate an exemption for individuals,sole proprietors,small businesses, students, etc. If they don’t include an exemption then most of those who currently post their own CS tasks could outsource them out to companies like Crowdflower to avoid the headache. In turn I see companies like Crowdflower that stay in the US and farm out those tasks requiring set hours and quotas and also losing our choice of what tasks we perform. Being required to perform whatever is provided to us.

    • somi September 25, 2013 at 9:26 am #

      Sir is there any site near u which is best to done crowdflower tasks plz reply me at my mail=snj_am1@yahoo.com or somi4153@gmail.com plz i need crowdflower task work

  4. Kathleen Clohessy October 14, 2013 at 2:00 pm #

    I’m a little late reading this, but I was looking up information on Crowdflower and came across this article, so here I am.

    First, I want to say that Crowdflower is a horrible company. Like most American businesses, they make obscene profits using foreign labor: the bulk of their tasks pay less than $1.00, and most pay under $0.05. The goal is to recruit workers in third world countries who can live well on $5.00 per day, not to contribute to the well-being of Americans who, like myself, need to supplement disability or retirement pay. They post most of their work on Amazon Turk, but do not accept inquiries from workers on the interface AMT provides. Instead, workers must go to the Crowdflower support site, ironically named “Get Satisfaction.” There are threads there that are over a year old and contain hundreds of questions from workers that have never once been addressed by a member of the Crowdflower staff. I wrote to their CEO, a 30-something entrepreneur, asking why this was the case, and never received a reply. They are the absolute worst example of the “crowd-sourcing” business model in the United States.

    With that said, I have to say that Mr. Otey’s lawsuit is nonsense. Crowd sourced workers are not employees; we are independent contractors. We choose the work we want to do and willingly accept the proffered pay. We can work for a company or not, move around at will, and refuse to participate if we are sick, not in the mood or just don’t like the work (called human intelligence tasks, or HITS) that is up for grabs. Furthermore, tasks that require higher skill levels pay more than those that don’t. I recently worked for a company that paid me $13.50 to write a 400 word article–close to minimum wage. Do I think that’s a fair payment for my efforts? Of course not. But considering the fact that I get to choose when, where and how I work, take time off whenever I want, and pay my taxes myself, it’s OK.

  5. John Cooper April 8, 2014 at 12:57 pm #

    Opportunism, plain and simple; both by plaintiff and by counsel. The bigger controversy looming over the horizon is with “The Man” aka conflicting political interests and tax “authorities” who will come knocking sooner than expected.

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