From JDSupra, Richard Reibstein discusses misclassification claim made by an AI worker against the AI modeling company for whom he was working. Richard writes:
As the business of artificial intelligence is expanding, it seemed it was only a matter of time before the AI industry became the subject of an independent contractor misclassification lawsuit. Last month, one of the leading generative AI modeling companies was sued in a proposed class action in California by a worker who claims that he and similarly situated AI workers were misclassified as independent contractors instead of employees. As described below, the AI worker’s lawsuit alleges that the company for whom he provided generative AI services directed and controlled how and when he performed his tasks. While the complaint alleges a high degree of direction and control by the company over the manner and means by which the named plaintiff and other AI workers performed their services, there is nothing in particular about the AI industry that should derail AI businesses from structuring, documenting, and implementing their IC relationships in a manner that complies with federal and almost all state laws governing ICs. Like companies in many other industries, companies in the AI industry can use a process such as IC Diagnostics (TM) to maximize their IC compliance in a customized and sustainable manner consistent with their business models.
In the Courts (3 cases)
ARTIFICIAL INTELLIGENCE COMPANY SUED BY AI WORKER IN IC MISCLASSIFICATION CLASS ACTION. A class action complaint was filed against Scale AI, a $13.8 billion company that accelerates the development of artificial intelligence applications, by a worker engaged to render AI tasks, who alleges that the company has misclassified him and other similarly situated workers as independent contractors and not employees. Scale AI provides end-to-end solutions to manage the entire “machine learning” lifecycle, a subfield of artificial intelligence involving the capability of a machine to imitate intelligent human behavior. The plaintiff’s complaint alleges that Scale AI engages workers called “Taskers,” who perform AI large language model (LLM) tasks to mimic human expression by engaging in data labeling, content creation, and responding to prompts, and that it misclassifies Taskers as ICs instead of employees in violation of California labor and employment laws. Among other things, the plaintiff claims that Taskers have no control over work they are assigned, the payments they receive, the subject matter of the tasks, or the deadlines for completion. Additionally, the plaintiff contends that Taskers are not compensated for required training and project familiarization; face termination of their services for voicing concerns about working conditions or pay; are prohibited from taking breaks; must follow company policies and download specific software; have no special experience, skills, license, or educational level; and are provided with the instrumentalities that the company requires the Taskers to use to provide services. It is anticipated that the company will make a motion to compel individual arbitration of the plaintiff’s claims, assuming it included an arbitration provision with a class action waiver in the IC agreements with its AI workers. McKinney v. Scale AI, Inc., No. CGC-24-620481 (Super. Ct. San Francisco County, Cal. Dec. 10, 2024).
