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[P]
AOL may be violating labor laws

By wiredog in News
Fri Feb 09, 2001 at 02:57:14 AM EST
Tags: News (all tags)
News

A major investigation by Forbes, with some commentary about AOLs use of volunteers possibly being in violation of employment laws.


A lawsuit has been filed claiming that existing labor laws, some more than 70 years old, apply to New Economy companies. Those laws apparently make it illegal for volunteers to work for for-profit companies. According to the article AOL knew this in 1995. Seems Forbes got access to some memos from the legal department.

Requisite scary quote(from the commentary): "we may conclude that much of the volunteer work being done today on the Web is, in fact, a very sophisticated form of serfdom. And if that is the case, there will be hell to pay." Especially since sites like K5 (Is this a business? Or a non-profit?) run on volunteers.

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AOL may be violating labor laws | 42 comments (38 topical, 4 editorial, 0 hidden)
If you listen closely... (2.14 / 7) (#1)
by ignatiusst on Thu Feb 08, 2001 at 03:01:05 PM EST

If you listen closely, you can hear the laughter from Redmond.

This should give a lot of open-source entrepreneurs nightmares. Imagine how quickly Linux will be dropped as a business model if something like this is taken seriously by the politicians/investors.

When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him. -- Jonathan Swift

Laughter? (3.50 / 2) (#2)
by wiredog on Thu Feb 08, 2001 at 03:08:07 PM EST

This should give a lot of open-source entrepreneurs nightmares

That,of course, is why I submitted this. Open Source companies, Slashdot, K5, any place that uses volunteers as part of its business. Although, MSN uses volunteers as well. And think of all the companies that have user groups to help with the marketing. Forbes thinks that this could be major, and I agree.

The idea of a global village is wrong, it's more like a gazillion pub bars.
Phage
[ Parent ]

your sig (none / 0) (#3)
by electricbarbarella on Thu Feb 08, 2001 at 03:15:58 PM EST

About your sig...the average american has slightly less than one testicle and slightly more than one breast. the average male/female births work out to (roughly) 100 to 105, respectively

-Andy Martin, Home of the Whopper.
Not everything is quantifiable.
[ Parent ]
To be pedantic, (none / 0) (#11)
by Happy Monkey on Thu Feb 08, 2001 at 03:40:15 PM EST

Mastectomies may bring that breast average down. But if you count overweight men as having two, that may go up dramatically.

Hm. I resemble that remark.
___
Length 17, Width 3
[ Parent ]

not pedantic enough (none / 0) (#14)
by Anonymous 242 on Thu Feb 08, 2001 at 03:52:12 PM EST

Technically, all men have two breasts (except for those few men that have had one or both removed in some form or fashion). Breasts on men are just not typically as large as the breast of women. Think of it this way, do only hens provide chicken breasts?

[ Parent ]
Don't they? (none / 0) (#26)
by bjrubble on Thu Feb 08, 2001 at 06:03:47 PM EST

Don't only hens provide chicken breasts? I think it's probably more to do with roosters' tendency to kill each other if packed together, but I believe all raised "chickens" are female.

[ Parent ]
[nt] that's why the beaks get cut off (none / 0) (#31)
by Anonymous 242 on Thu Feb 08, 2001 at 09:34:20 PM EST



[ Parent ]
Ahh (none / 0) (#32)
by bjrubble on Thu Feb 08, 2001 at 10:48:58 PM EST

I'm obviously not a chicken farmer...

[ Parent ]
trade journals (none / 0) (#38)
by Anonymous 242 on Fri Feb 09, 2001 at 08:23:17 AM EST

The chicken farming trade journals are fascinating. They are full of articles on better way to get chickens to eat sans beaks. Not all chicken farms do this, only the big ones. Free range chickens generally get to keep their beaks until slaughter time.

[ Parent ]
You sure about that? (none / 0) (#16)
by error 404 on Thu Feb 08, 2001 at 04:02:58 PM EST

Last I heard, there were more boys born than girls, but the survival rates for females are better than for males, so the ratios reverse at some point and there are slightly more women than men.
..................................
Electrical banana is bound to be the very next phase
- Donovan

[ Parent ]
Apples and Oranges (4.50 / 2) (#6)
by Happy Scrappy Hero Pup on Thu Feb 08, 2001 at 03:30:12 PM EST

Volunteer moderators who have specific duties and make commitments to do this on a regular basis are what is concerned here.

Open Source is predicated on people producing a product, then releasing it to all others, including any interested companies. Your logic might apply if in order to work on the open source Mozilla code I had to agree to work 20hrs. a week on it to justify them releasing it to me.


--Happy Scrappy
[ Parent ]
mozilla coders are not part of the lawsuit (5.00 / 2) (#8)
by Anonymous 242 on Thu Feb 08, 2001 at 03:38:25 PM EST

Greetings, ignatiusst.

Had you read the article, you would have realized that the open source volunteers behind Mozilla are not even on the roadmap for the lawsuit. The lawsuit is about volunteers who worked in AOL chatrooms to help AOL build up their community. These volunteers were treated very much like employees:

Kelly Hallissey, one of Greenberg's plaintiffs who was a former volunteer guide and became a community leader in a chat room, says AOL managers instructed community leaders to encourage subscribers to explore other areas to keep them connected and to bulk up billable time under the company's hourly rate structure. "We had a minimum of how many areas we had to promote in each shift,'' she says. "To promote flowers, we'd insert into our chat rooms the message 'Send flowers to your honey-visit keyword flowers.' If we didn't promote four or five per shift, it was counted against us in our peer review.'' This example, Greenberg says, constitutes de facto employment.

I doubt that this lawsuit is going to make companies with open-source projects blink, much less give them nightmares.



[ Parent ]
You seem to have tripped over your own advice (3.00 / 1) (#15)
by ignatiusst on Thu Feb 08, 2001 at 04:00:02 PM EST

Had you read my comment, you would have noticed that I am not suggesting that any open source project is on the road to a lawsuit. Rather, I am speculating (and let me emphasize it this time so that there will be no mistake) on the potential reaction from politicians/investors if it's taken seriously and this time, let me add lawyers.

And, as we all know, none of those creatures are exactly logical...

When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him. -- Jonathan Swift
[ Parent ]

I did read your comment (3.00 / 1) (#19)
by Anonymous 242 on Thu Feb 08, 2001 at 04:12:53 PM EST

This should give a lot of open-source entrepreneurs nightmares. Imagine how quickly Linux will be dropped as a business model if something like this is taken seriously by the politicians/investors.

Your two sentences certainly implies that open source projects are headed down the same path that AOL is currently headed down.

on[ly] the potential reaction from politicians/investors if it's taken seriously and this time, let me add lawyers.

This new statement is certainly less ambiguous than your former post. In any case, you still are comparing vastly dissimiliar situations.



[ Parent ]
Not nightmares, but maybe guidelines (4.50 / 2) (#18)
by error 404 on Thu Feb 08, 2001 at 04:11:01 PM EST

Actualy, some of them might be a Good Thing. Rules like only requiring specific time commitments (or collecting anything that looks in any way like a time sheet) from paid employees gives people running Open Source projects for profit better reasons to spend the money on developers. Which is valuable if the investors come around and suggest laying off the paid staff and relying entirely on volunteers.


..................................
Electrical banana is bound to be the very next phase
- Donovan

[ Parent ]

oh dear lord (3.00 / 1) (#27)
by regeya on Thu Feb 08, 2001 at 06:30:11 PM EST

I truly hope that Rusty, Inoshiro, whomever check your comment to see where it originated from. I mean, I've never seen your nick, and you list and your email address is under the yahoo.com domain (free webmail). If I didn't know better, I'd say we're seeing another example of astroturfing similar to the documented incident on Linux Today.

The situations are hardly similar. People were agreeing to work, for free, for AOL. AOL may have called it volunteering and whatnot, but it was essentially working for free.

With, say, the Linux kernel or the GNU tools or whatever, the developers aren't doing it for Red Hat, SuSE, or whomever. They work for the benefit of the projects and agree to work under the restrictions of the licensing agreements, which would normally allow someone like Red Hat to bundle their software and sell distributions of the software. With AOL, the "volunteers" were essentially given a task list by AOL (afaik) and did their work for free.

While this won't cause a problem for the Linux world, it could cause problems for someone like linux.com (though I don't know if they ever give assignments to their volunteers; it was the paid editors/volunteer writers model that kept me from contributing for so long. That, and the fact that I'd get bossed around by...well, never mind. ;-)

Please, no more FUD from Redmond today. You might think you're fooling us but you're not. It's the same shit that Mr. Miller and Mr. Ballmer have been spewing for two weeks. Get some new material and try again.

[ yokelpunk | kuro5hin diary ]
[ Parent ]

re: oh dear lord (2.00 / 1) (#37)
by ignatiusst on Fri Feb 09, 2001 at 08:20:20 AM EST

Normally, I try not to get personal in my posts, but the ignorance in your post has pushed me over the edge. If you are going to be insultive, at least try not to be a twit about it...

I have never seen your nick, either, but let's see what a quick search of the k5 archives brings us: regeya:

Comments - 292 from 01/13/01 to 02/09/01 (that's a lot in a short time.. )
Diary Entries - 10 from 02/04/01 to 02/09/01
Stories - 4 from 01/15/01 to 01/25/01

As to your reaction to my story, it may help you to read more closely (I know, asking someone to read is asking a lot...). My only observation was what a disaster it would be to open-source and Linux if such an accusation were taken seriously by politicians and investors.

Grow up, regeya. Or, at the very least, don't write silly little rants when you don't have the facts to back them up.

When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him. -- Jonathan Swift
[ Parent ]

K5 is a business, isn't it? (3.50 / 6) (#5)
by puzzlingevidence on Thu Feb 08, 2001 at 03:28:19 PM EST

K5 is a business now that it takes advertising revenue, because the intent is to make profit for the site's principal(s).

Even if K5 only ever makes enough money to break even, Rusty has said that he'd like to make enough money from K5 to be able to afford to spend more time on it. That makes it a business.

As such, it would be just as illegal to volunteer to help here as it would be to volunteer at AOL, would it not?

And if this is the case, does this mean that sites like K5 should be required to share income with contributors? I'm more than a little frightened by that idea. If K5 makes money, they *should* pay us for contributing. And so should Slashdot. And Plastic. And CNN.com. And Amazon.com can't claim ownership of my reviews unless they pay me. And so forth. Frightened, yes -- but I'd take the money regardless. And if enough noise was made by the community -- some groundswell of support for the "no volunteers" movement -- I may even demand the money.

Luckily, it's never going to happen. Without voluntary contribution (of time, content, or whatever) the Web is dead dead dead. What will happen is that as the Web grows, more sites will have to offer greater incentives for contributions (as the user base diffuses) -- and then AOL will eventually have no choice but to pay their "volunteers", or lose them to other sites who will.


---
A man may build a throne of bayonets, but he can not sit on it. --Inge

Semantics... (5.00 / 3) (#10)
by ucblockhead on Thu Feb 08, 2001 at 03:39:45 PM EST

A lot depends on semantics. I suspect that Kuro5hin is safe because there aren't special volunteers to post stories. Rather, anyone can submit stories at any time. Hence, the submission of stories is one service that Kuro5hin provides. In that sense, Kuro5hin is only as responsible for submissions as any BBS system is responsible for user's posts. A BBS system survives both because people want to read posts and others want to write posts. The posters aren't special volunteers, though. And here, story posters aren't special volunteers. They're just random people who decide to post with no prompting from the management.

Much of it has to do with direction. Part of the issue is that the AOL volunteers were told what to do. They were given rules of operation. That's a direction constrast with the "Open Source" situation in which companies like Red Hat have zero control over what individual developers do. The only developers they have control over are the ones they pay.

The AOL volunteers are like employees because they are given specific direction and are asked to give a certain time commitment. In other words, all the facets of a job without the pay.
-----------------------
This is k5. We're all tools - duxup
[ Parent ]
read the article (4.33 / 6) (#12)
by Anonymous 242 on Thu Feb 08, 2001 at 03:41:31 PM EST

The subject of the Forbes report is about people that were volunteer staff. These people had set hours, did specific tasks and were rewarded with free AOL time. These people even had peer-reviews to keep their official status.

A discussion board like k5 doesn't even come close to being the same situation.



[ Parent ]
I read the article (3.00 / 4) (#17)
by puzzlingevidence on Thu Feb 08, 2001 at 04:07:33 PM EST

I've read the article, and there's a clear correlation between the AOL situation and content-driven sites like K5, Slashdot and even Amazon. It's not precisely the same situation, but it's similar.


---
A man may build a throne of bayonets, but he can not sit on it. --Inge
[ Parent ]

clear correlation? (4.50 / 2) (#20)
by Anonymous 242 on Thu Feb 08, 2001 at 04:17:34 PM EST

Do users of k5 have to punch time clocks?

Are users of k5 subject to review that decide whether they can go on using the services of k5 or not?

Are users of k5 given specific rules on how to promote for-fee services of k5?

Are users of k5 referred to as staff?

Has an internal audit of k5 reccomended that any regular users be hired on as staff?

Do users of k5 have official standing?

I do not see any clear correlation, the situation is vastly different and hardly similiar.

[ Parent ]

Yes, clear correlation. (3.00 / 5) (#23)
by puzzlingevidence on Thu Feb 08, 2001 at 04:26:12 PM EST

Do K5 users provide value to the company?

Do Amazon users perform work-for hire?

Do Plastic story authors perform a function which is performed in similar non-e-companies for pay?

Are comment writers on Slashdot reviewed by their peers?

It's a clear correlation.

---
A man may build a throne of bayonets, but he can not sit on it. --Inge
[ Parent ]

there is no clear correlation (4.50 / 2) (#30)
by Anonymous 242 on Thu Feb 08, 2001 at 09:30:19 PM EST

I'd be very grateful if in your next response, you actually responded to the questions in my prior post instead of ignoring them. The factors that make the AOL lawsuit disanalogous to k5 won't go away just because you want to ignore them.

Do K5 users provide value to the company?

No more so than the views of television programs, authors of letters to the editors of magazines, listeners to call-in radio programs etc.

Do Amazon users perform work-for hire?

Do authors of letters to the editor in a paper get paid for their efforts? Do callers to the the Rush Limbaugh show perform work-for-hire?

Do Plastic story authors perform a function which is performed in similar non-e-companies for pay?

I'm not familiar with Plastic, but probably not. If Plastic can be considered an employer of free-lance authors, then so can every vanity press where authors pay to have their books published.

Are comment writers on Slashdot reviewed by their peers?

Peer review of comments via a rating system is not the same thing as a peer review to determine elgibility to retain an official post. An AOL volunteer up for review is up for review to ascertain whether or not they will keep their official position. Peer review of comments on a weblog merely assigns a level of popularity of some sort to a user. The situation is entirely different.

It's a clear correlation.

Sorry, but just because you say it is so, doesn't mean that it is so.



[ Parent ]
Clarification (4.00 / 1) (#35)
by RadiantMatrix on Fri Feb 09, 2001 at 12:36:38 AM EST

Even if K5 only ever makes enough money to break even, Rusty has said that he'd like to make enough money from K5 to be able to afford to spend more time on it. That makes it a business.

No. Non-profit organizations are allowed to pay administrators, and even have employees. Consider hospitals in the US: they enjoy non-profit status, but doctors and administrators are highly paid. Also consider religious organizations: they are non-profit in the US, and many (not all) pay thier leaders, even some members who take care of paperwork and such.

An organization can be non-profit as long as it provides a public service -- it can even charge for that service so long as those charges go toward covering costs and expanding service. It can't base payment to employees and administrators based on revenue (i.e. commissions).

There's more to it, of course - if in doubt, contact an attorney licensed to practice in your area.
--
I'm not going out with a "meh". I plan to live, dammit. [ZorbaTHut]

[ Parent ]

Microsoft Too? (3.66 / 3) (#9)
by iCEBaLM on Thu Feb 08, 2001 at 03:39:22 PM EST

This is interesting, because Microsoft and their Gaming Zone does the exact same thing. Volunteers apply for "Member Plus" status who then have the task of moderating gaming chat rooms, helping users with technical problems, organizing tournaments and events, all the while massive advertisments from anything from the US Armed Forces to Electronic Boutique run on the site.

-- iCEBaLM

A little different (4.00 / 1) (#24)
by spacejack on Thu Feb 08, 2001 at 05:34:29 PM EST

Unless MS offers financial incentives. I think EA pulled the plug on some of their volunteer incentives for Everquest (like discounted/free subscriptions) for this very reason.

It kind of sucks because I think the EQ team really did want to reward those who helped other players.

[ Parent ]
Blown out of proportion (4.57 / 7) (#13)
by Philipp on Thu Feb 08, 2001 at 03:46:12 PM EST

I hope this kind of article does not become standard at kuro5hin. There are a lot of things taken out of context and blown out of proportion to create a sensational read. Of course "old economy" laws apply to AOL, why shouldn't they? ("I'm a new murderer, old murder laws don't apply to me!").

There seem to be very well-defined areas where volunteers cannot be used, the Forbes article mentioned:

The army of volunteers, it concluded, because it was required to fill out time cards, undergo training and file reports, were, by all appearances, de facto AOL employees. In other words, they had to be paid and given benefits.
There are other areas, such as internships, where unpaid work seems to be allowed. I don't think rusty should have sleepless nights over being imprisoned for slavery. But where real work is done by unpaid 14 year old teenagers, who are forced to a rigid schedule, I guess some concern is warranted. The way labor laws are here in the US, I doubt there will be a serious legal case, though.

alias kn 'killall -9 netscape-communicator'
Indeed (4.33 / 3) (#21)
by rusty on Thu Feb 08, 2001 at 04:19:48 PM EST

This was an interesting read for me, for obvious reasons. However, I agree with you that the sitaution here is significantly different from that of AOL.

The case appears to hinge on whether or not an employer/employee relationship exists between AOL and it's volunteers. If so, then AOL should pay them. The test for this, according to the article, is:

...the "right to control" test, or rather standards stemming from cases stretching back 100 years that established that when an employer determines not only what should be done but how it should be done, an employer/employee relationship exists. This standard takes into account whether workers have to supply oral or written reports; if they are given training; whether they are paid by the hour, week, or month; and if they have a set number of hours they must work.
None of those things apply here. Anyone can submit stories and comments at any time. Anyone can vote for stories and rate comments at any time. So while volunteer efforts are what undoubtedly makes K5 valuable (and therefore attractive for advertisers), I don't see any reasonable way that the standards of "employee" could apply to anyone here but me. While "performing a service that creates value" is one of the standards, I don't think it alone qualifies someone as an employee.

I'd like to hear what others think of this, though. Especially anyone with the legal training to wade through the Fair Labor Standards Act and make some sense of it.

____
Not the real rusty
[ Parent ]

I think you're safe (3.00 / 1) (#25)
by spacejack on Thu Feb 08, 2001 at 05:36:22 PM EST

until you start paying us to moderate :)

[ Parent ]
Indeed (3.00 / 1) (#29)
by wiredog on Thu Feb 08, 2001 at 07:32:18 PM EST

Gotta admit, I was wondering about the effects of the case on places like this, which is one reason why I posted it. Judging from some other comments, looks like most think that won't be a problem. Another reason for posting is the effects on AOL. According to the article they could get hit with one billion in back pay. Add in punitive damages, back taxes and penalties, and legal fees and the cost could be painful, even for them. More and more, the 'new' economy looks like the old one, what with labor lawsuits (this and MSFTs 'perma-temp' case), layoffs, and union agitation (I'm a big fan of unions, overall they do good work).

The idea of a global village is wrong, it's more like a gazillion pub bars.
Phage
[ Parent ]

Not News (3.00 / 1) (#22)
by ti dave on Thu Feb 08, 2001 at 04:21:45 PM EST

AOL has been dealing with this problem since 1997.
Only the actual filing of a lawsuit is news here, and that happens thousands of time a day...

feh!

ti_dave
"If you dial," Iran said, eyes open and watching, "for greater venom, then I'll dial the same."

K5's status (3.00 / 1) (#33)
by cameldrv on Fri Feb 09, 2001 at 12:21:05 AM EST

Well, given that they get free hosting and they display ads, it's pretty clear that k5 is for profit. I suppose if they structured the company as a non-profit and paid themselves salaries it could work, but that's pretty hard to do if you don't know how much the ads are going to bring in from month to month.

Recieving Payment != for-profit (3.00 / 1) (#34)
by RadiantMatrix on Fri Feb 09, 2001 at 12:29:32 AM EST

Just because K5 gets donations of service and hardware, and recieves revenue from advertising does not mean they are for-profit.

Non-profit and not-for-profit organizations can collect revenue in order to cover expenses incurred, pay administrative costs, and expand operations. The entire medical field in the US enjoys non-profit status, but they collect huge sums for their services.
--
I'm not going out with a "meh". I plan to live, dammit. [ZorbaTHut]

[ Parent ]

Yes, but... (4.00 / 1) (#39)
by cameldrv on Fri Feb 09, 2001 at 09:51:12 AM EST

Those organizations have their finances structured as a 501(c)(3) corporation, and they don't pay profits directly out to anyone. They pay salaries, but they're required to only pay market-rate salaries, and not vary the salary based on profits. My point was that since they don't pay any hosting fees, they shouldn't have any real expenses, but the ads don't yield a constant level of cash flow. Therefore they would have a hard time making the business a non-profit. And why should they? I don't have any problem with rusty and the gang pulling down a little extra cash, but they're almost certainly not a non-profit.

[ Parent ]
The dilemma that wasn't (none / 0) (#40)
by Robert Hutchinson on Sat Feb 10, 2001 at 07:00:16 PM EST

Old economy laws such as this one should not apply to AOL.

Just as they should not apply to the old economy.

I have no sympathy for anyone who cannot comprehend the meaning of the word "volunteer", and about five tons less sympathy than that for those who do comprehend its meaning, but think hiding behind laws is a meaningful substitute to actually adhering to principles, rights, and common sense.

I voluntarily contribute to this discussion site. I receive the payment of having my ideas disseminated and responded to. I'd best call my lawyer ... that just CAN'T be meeting the minimum wage.

Robert Hutchinson
No bomb-throwing required.

But you don't have a boss here (none / 0) (#41)
by error 404 on Mon Feb 12, 2001 at 11:29:22 AM EST

I don't have a lot of sypmathy for those in the case either. But this is different. AOL was allegedly treating those people as employees, with schedules and performance reviews and quotas and all that. That is why they are in court. If you want employees, you have to pay for them. All this means is that Rusty can't demand that I stay online during certain times and submit at least N messages per week that meet certain promotional goals. If he did, I'd tell him where to stick it, not sue him. But I do have a certain social stake here, and I can understand how I might (if I didn't have significant outside interests) put up with more than I ought to in order to avoid losing it. And having put up with it for a while, I'd have "more to lose".
..................................
Electrical banana is bound to be the very next phase
- Donovan

[ Parent ]
I'm discussing basic freedoms. (none / 0) (#42)
by Robert Hutchinson on Mon Feb 12, 2001 at 04:19:58 PM EST

If you want employees, you have to pay for them.

Under the law, yes. I simply believe that it's horrible law. If they didn't make a contractual deal on how they were to be compensated, AOL can pay them in bananas if it wants.

If I want to work for a penny an hour, I should be free to do so. If I want to volunteer my services and I get a penny an hour out of the goodness of my boss's heart, rescindable at any time, we should be free to do so.

These laws benefit the lazy and manipulative at the expense of the dedicated and honest.

Robert Hutchinson
No bomb-throwing required.

[ Parent ]

AOL may be violating labor laws | 42 comments (38 topical, 4 editorial, 0 hidden)
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