Some initial thoughts on the Otey vs. CrowdFlower case

January 9, 2013


The question of whether paid crowd work violates U.S. employment and minimum wage laws may finally make it into court thanks to Christopher Otey, an Oregon resident who is suing CrowdFlower Inc. for wages he claims the company owes him as an “employee.”

You can (and should) read the full text of Otey’s complaint or coverage of the story on or MissionLocal.

I have a few preliminary, and mostly mixed, feelings about this. However, I should preface everything by saying that (1) I have known one of the defendants named in the suit, CrowdFlower CEO Lukas Biewald, for many years through mutual acquaintances at Stanford, where we were both enrolled at the same time; and (2) I worked as a paid, independent consultant with CrowdFlower on several projects between 2008-2011. That said, I have never held, nor hold at this time, any material interest, financial or otherwise, in the company.

My initial reaction is that I can’t believe it’s taken this long for someone, somewhere in the United States to sue one of the companies engaged in distributing paid crowdsourcing work for violation of the Fair Labor Standards Act (FLSA). Smart lawyers like Alek Felstiner and Jonathan Zittrain have been making some form of the argument that this is a major issue for Crowdsourcing for at least three years now. Felstiner even made the case in a series of posts on CrowdFlower’s blog here, here, and here in 2010. I am hardly the only person to regard as remarkable the fact that a whole venture-funded industry has sprung up around a set of activities that, on the surface, seem to resemble a massive minimum wage violation scheme.

At the same time, there are a lot of reasons to believe that crowdsourcing represents a fundamentally different sort of phenomenon than the varieties of “work” and workplace abuses the US congress sought to regulate with the FLSA back in 1938. For starters, crowd work is radically flexible – in terms of time and location – as well as minimal in terms of the commitment, skill, and obligations required of workers. As a result, it’s not clear that the relationships established between requesters and providers of work in this context are really anything like relational contracts that exist between traditional employers and employees. Crowd workers do what they for a variety of reasons, in a variety of ways, and under a variety of conditions, making it pretty hard to determine whether they ought to be considered employees of the organizations that may play a role in compensating them for their efforts (and this is potentially an important point since CrowdFlower plays something of a middle-man role between the individuals and companies that post tasks to its site and those who complete the tasks and receive compensation in exchange for their labor).

One particular challenge posed by the suit and the fact that Otey and his attorneys have chosen to seek compensation under US minimum wage laws ($7.50 per hour). Depending on the outcome, the impact of a ruling against CrowdFlower could therefore make paid crowd work as it exists today financially impractical within the United States. While such a ruling might represent a crucial step in enforcing legal, ethical, and financial standards of fairness in online environments, it might also undermine the growth of a valuable source of future innovation, employment, research, and creativity. Crowd-based systems (whether paid or unpaid) of distributed information creation, processing, and distribution have accounted for some of the most incredible accomplishments in the short history of the Internet, including Wikipedia, ReCaptcha, Flickr, Threadless, Innocentive, Kiva, Kickstarter, YouTube, Twitter, and the Google search engine.

As some colleagues and I have argued in a forthcoming paper, The Future of Crowd Work, there are many ways in which paid crowd work as it exists today does not look like the kind of job you would necessarily want your child to take on as a career.  And yet, while crowd work is very, very far from ideal by almost any standard, I would be disappointed if the impact of this case somehow resulted in the destruction of the industry and the stifling of the innovative research and applications that have developed around it. The outcome will boil down to the ways in which paid labor – even flexible, remote, and relatively straight-forward tasks that are paid only $0.01 – is regulated as compared with volunteer labor.

3 Responses to “Some initial thoughts on the Otey vs. CrowdFlower case”

  1. Hi Aaron, in the UK, minimum wage laws have applied to microwork for many years. During my time designing microwork platforms, I came to see how fair employment law and innovation can go hand in hand.

    • aaron Says:

      Hi Nate!

      That’s fascinating – I wasn’t aware that the UK applied minimum wage laws to microwork. Any sense as to how or why that happened?

      The larger implication of your comment is that I (or maybe some other folks involved in this conversation) are wrongly conflating innovation in crowdsourcing with labor law de-regulation. I was definitely not trying to say that. Rather, the probem I’m trying to point towards is that it’s not clear to me that wage laws should be applied to the things people do in their spare time. Certainly there are some folks out there who rely on crowd work as a primary means of income and, although it might be debatable exactly who falls into such a category, I think those folks ought to be paid a fair, living wage for their efforts. At the same time, I’m much less certain that someone who drops into Mturk for a few minutes or even hours a day while they’re bored with their other job or their schoolwork or whatever is entitled to the same treatment. Likewise, what do we do about the fact that many people pursue the exact same crowd work in exchange for virtual currency? What constitutes a fair wage in those contexts?

      I have a hard time imagining how such fuzzy standards might be translated into formal policy (or code), but I do think that the nuances of the situation merit very careful consideration before a judge decides to apply existing labor law to requesters on Mturk and other crowd work systems.

  2. My biggest problem with this is that unless crowdflower “hired” Mr. Otey as an employee there is no employer/employee relationship. Mr. Otey was not obligated to accept or perform any work for the company. With no contractual obligation on either side I don’t see why there should be a legal issue.

    Regulating an hourly wage for this type of work can be very unreasonable considering the type of work offered and the varied skills of those providing the labor. I type 50 wpm, there are those slower or faster. I have a varied IT/End User back ground that allows me to complete some tasks faster than others. I use a programmable keyboard with key mapping to cut down the time it takes to do a variety of tasks. Not to mention tasks that are “rejected” because they were not completed correctly.

    I work part time as a help desk/remote desktop support/remote network monitoring consultant for a start up company. I supplement my income with “micro-work”. I usually choose to work tasks that earn me around $6-$7/hr. There are many days I find $10-$20/hr tasks. There are even a few penny tasks out there that I can get $7/hr doing if I work hard enough at it.

    If I make less than $6/hr that’s my problem for choosing to work for less than that. I have no legal, ethical, or moral obligation to work for any of the companies providing these types of tasks.

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