Federal Court Approves Settlement in Crowdsourcing Labor Company Wage Suit

Federal Court Approves Settlement in Crowdsourcing Labor Company Wage Suit

SAN FRANCISCO — A federal court approved a settlement agreement that would put to rest claims by a class of employees against Crowdflower Inc., a crowdsourcing labor company, for alleged violations of the Fair Labor Standards Act (FLSA). The settlement totaled $585,507, which settles the claims of a class consisting of nearly 20,000 employees. The settlement awards $196,894 in costs and attorneys’ fees, $98,898 in claims administration costs, and a total of $11,000 in service awards to the two representative plaintiffs.

The judge had initially approved this settlement earlier, but the parties sought modifications over issues such as how class members would be contacted, excluding class members who are estimated to be due less than $5, and changing the allocation to the claims administrator from $70,000 to nearly $100,000. However, the court rejected these requests for modification because it included a proposal to exclude class members without U.S. mailing addresses. Additionally, one modification would have required some class members to provide identification to receive their settlement checks.

Minimum Wage Claims

According to the suit, Crowdflower assigned the employees in the class menial, repetitive tasks and paid them a set fee rather than fully compensating them for the time they spent to actually complete their tasks. One of these tasks included identifying the content of photographs, and Crowdflower assigned tasks such as this through a process called crowdsourcing without sufficient compensation. Under the settlement agreement, the workers who performed jobs for Crowdflower through postings on a website from October 2009 to the present will receive a prorated amount from the remaining settlement depending on what they initially earned.

Employee Status Determinative of Minimum Wage

In determining whether an employment relationship exists between a worker and a company, courts look at the economic realities of their relationship. In doing so, courts apply a number of factors to determine whether a worker is economically dependent on a company and is thus engaged in an employment relationship with its rights and legal protections. Some of these factors include whether the employer has the power to direct, control, or supervise the worker or the work performed, whether an employer has the power to hire or fire, modify the employment conditions, or determine the pay rates. If a company is considered an employer of a worker under FLSA, then the employer must comply with FLSA’s overtime and minimum wage requirements.

Employers cannot avoid FLSA by erroneously classifying workers as independent contractors when a legitimate employment relationship exists. If you feel that you have been misclassified and, thus, deprived of your minimum wage and overtime rights, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action.

Text Now For Free Case Review