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For one year, there have been two important legal events that could shape the future of the crowdsourcing landscape. First, on October 26th 2012, one-time Crowdflower worker Christopher Otey filed a lawsuit (PDF) against Crowdflower alleging that the platform violated the U.S. Fair Labor Standards Act. Second, on October 22nd 2013, a group of Yelp reviewers filed a class-action lawsuit (PDF) against the business review site, claiming that they are unpaid writers who are vital to the company’s existence. These two lawsuits are claiming Labor law applications to micro-task crowdsourcing activities.

Could this happen in creative crowdsourcing?

Up to this day, neither of these lawsuits -which have very similar claims- have been closed, which shrouds the entire crowdsourcing industry in a big question mark. In this post, I briefly describe these cases, clarify the legal situation in the U.S. and in France, and tell whether creative crowdsourcing participants should get working contracts with platforms and sponsors – or not.

What do Crowdflower participants and Yelp reviewers claim?

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Crowdflower workers say they should be entitled to the federal minimum wage.They allege that Crowdflower violated the Fair Labor Standards Act by paying less than the federal minimum wage. They were paid an average $1 to $2 an hour, which is why they are seeking the federal minimum wage for each hour spent working on tasks through the platform.

To the Company, Crowdflower, labour law doesn’t apply to micro-tasking. It is a new form of labor that is not described by labour law. The participants are independent contributors and not employees. “They’re free to work whenever, wherever, however they wish, for whoever they wish for as long or as short a time as they wish,” a Crowdflower spokesperson said. The company said that participants are aware that they are doing a service for a general public good.

Yelp reviewers see themselves as writers and non-wage paid employees. Yelp reviewers reckon that their reviews are essential for Yelp, that they require writing, researching, editing… all of which is done by reviewers, whose works allows Yelp to earn a huge amount of money without paying wages. They want to replace cult-like rewards (badges, trinkets, liquor, food…) given by Yelp by real monetary compensations , at least a minimum wage for the entire class of workers. They are also seeking reimbursement for the reviews they created.

To the platform, the service used by Yelp workers is free: they participate in order to belong to an online community and to contribute to a common knowledge-base. Besides, they benefit by exposure and expert-status gained through their activity on Yelp. Hence, no employment relationship could exist.

Crowdflower and Yelp are micro-tasking crowdsourcing activities, which consists in the execution of minute, repetitive tasks. Crowdflower offers online a list of available tasks on its platform, such as identifying people in photos or verifying phone numbers, and Yelp offers participants to write reviews about things like exhibitions, events, restaurants… The participants’ autonomy is limited, they have to respect the format and instructions given by the platforms, which means that the latter have a high level of control over the performed jobs.

What does Labor law say?

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In the two lawsuits, filed under American law, both Crowdflower participants and Yelp reviewers filed their complaint under the Fair Labor Standards Act, a Federal Act which provides a national minimum hourly wage of $7.25 an hour. An employer shall be subject to civil and criminal sanctions if he doesn’t pay his employee for work performed.

A multifactor test allow to determine whether an employment relationship exists, and whether a worker is an employee or an independent contractor. The court particularly looks whether the worker has independent judgment and control over her/his own work, if she/he freely decides about the manner in which the work is being performed.

In French Labor law (I live, study and work in France), a contract will be qualified as employment contract if there is a relationship of subordination between an employee and the employer. The employer’s management power, disciplinary power and supervision power are the three cumulative elements that constitute a relationship of subordination:

• Management power: The employer has the control of the organization and the execution of the work.
• Disciplinary power: The employer is entitled to punish an employee committing a fault during work time.
• Supervision power: The employer looks over and checks the work done by the employee.

French law looks at a variety of proof points to determine whether a relationship of subordination exists. Among these pieces of evidence, there are for instance: time restriction given by the employer, the execution of work in a definite place and the supply of material by the employer.

A parallel with… Reality-TV!

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On June 3^rd 2009, the case of the French reality-TV show “Ile de la Tentation” was condemned to offer participants working contracts. The Court ruled that the participants acted under the control of the producer, and that their participation contract therefore had to be requalified as employment contract. According to the Court, a clear relationship of subordination existed due to the following reasons:

• Candidates were required to take part in specific activities and meetings.
• Candidates had to respect daily plannings of filmed scenes, one-sidedly decided by the producer, and repeated certain scenes to justly demonstrate essential moments
• Candidates had to respect day and night hours fixed by the production and could not leave the island or communicate with other nonaffiliated people
• Candidates received a monetary compensation (about 1,500€) which could be to consider as a salary

Does this apply to creative crowdsourcing?

Why? Because in contest-based creative crowdsourcing…

There is no management power: On  creative crowdsourcing platforms, when a contest is launched, they let the creators know about this new contest by issuing newsletters and featuring the contest on our website. It is not an order but only information. The creators are free to be a part of it or not; they are free to choose where, when and how they wish create their submission. So, contest-basec creative crowdsourcing platforms have no management power on the creator.

There is no supervision power: Moreover, the brief and guidelines of each contest insist on the fact that platforms look after original creations. I think that autonomy kindles creativity. That’s why I think platforms don’t check how creators create their submissions, which is a sign that platforms have no supervision power. There are guidelines to comply with, but this can’t be construed as supervision power. The creators also feel free to describe how they seek creativity when submitting works on platforms – and they often tell us when creative briefs are too restrictive!

There is no disciplinary power: Platforms limit themselves to organize call for entries (cf. Article 1 of our Rules) and do not control or sanction. They only check submissions to accept those submissions that comply with the guidelines, and to reject illicit content (cf. Article 4 of our Rules). Hence, they have no disciplinary power because it cannot punish a creator who does not want to be a part of a contest or to respect the brief.

Consequently, a relationship of subordination can’t exist between a crowdsourcing platform and a creator. Moreover, the prize given to a winning creator cannot be considered as a salary. Indeed, it is the compensation of the assignment of creator’s intellectual property rights to the Company and not the compensation of work being done under the platform’s control, supervision and authority (cf. Article 5 of our Rules).

Conclusion

Creative crowdsourcing platforms don’t need to establish working contracts with participants as long as participants are completely free to decide if they create, when they create, how they create, and don’t have to follow orders given by the platform.

What if the control is stronger and the platform supervises the creation process? What if participants are required to modify their submissions in such a way that creators lose a part of their autonomy? Different creative crowdsourcing models exist today, and some of them heavily lean towards more control and creative guidance. In this situation, creators could be entitled to get working contracts.

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Thank you to Aimée Perney, Eric Favreau and Joël Céré for helping me write this post.

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What do you think?