From JDSupra, Richard Reibstein discusses a new case in which highly skilled professionals who train AI models and chatbots allege that they were misclassified as independent contractors. This case comes on the heels of two other cases in which workers for AI firms allege that they were misclassified. Richard writes:
In 2025, we published blog posts about two class action lawsuits by workers alleging independent contractor (IC) misclassification by two artificial intelligence (AI) companies. The first blog post involved an IC misclassification case brought against Scale AI by so-called “taskers,” workers who perform AI large language model tasks to mimic human expression by engaging in data labeling, content creation, and responding to prompts. The second blog post dealt with an IC misclassification case against Surge Labs Inc. by a data annotator engaged to perform coding assignments, distillation tasks, comparisons of AI generated responses, and data labeling to ensure that large language models become more accurate and capable of mimicking human expression. Among the legal developments from last month that we summarize below is an IC misclassification case against yet another AI firm, Mercor.io, on behalf of highly skilled professionals who train AI models and chatbots. The first two AI lawsuits were filed in Northern California courts under that state’s strict test for IC status. Notably, this new case was not brought in California but rather in Texas, and it alleges violations of ERISA and the Internal Revenue Code, both of which have far more reasonable tests for IC status than does California. We anticipate that this new lawsuit will likely prompt even more AI workers around the U.S. to file IC misclassification cases against other AI companies. We also expect that this type of case will propel savvy businesses in the AI field to use processes such as IC Diagnostics™ to enhance their compliance with state and federal IC laws and thereby minimize their exposure to IC misclassification lawsuits and liability.
In the Courts (4 cases)
AI FIRM SUED BY ‘EXPERT’ PROFESSIONALS FOR IC MISCLASSIFICATION IN CLASS ACTION SEEKING ERISA BENEFITS. AI startup, Mercor.io Corp., faces a proposed class action suit in a Texas federal court alleging IC misclassification on behalf of 30,000 “experts” who train AI models and chatbots for the startup’s clients. The proposed class includes physicians, attorneys, bankers, and software engineers. The plaintiff performed subject matter expert evaluation and peer review work for the company’s clients. She claims that by misclassifying experts as ICs instead of employees, Mercor violates ERISA by denying them benefits under the company’s 401(k) and health plans. In support of her allegations, the plaintiff asserts that the company dictates the experts’ hours and weekly availability; monitors and tracks their computer screens through a mandatory surveillance app; sets their payrates; trains and supervises them; offboards those that fail to meet expectations; and fails to pay experts for work completed outside of the tracking app including time spent on preparatory activities. The plaintiff also asserts claims for fraudulent filing of Form 1099s, breach of contract, and unjust enrichment. White v. Mercor.io Corp., No. 6:26-cv-00201 (N.D. Tex. May 8, 2026).