AOL settles unpaid volunteers class-action

AOL has recently settled its largest lawsuit prompted by the block of volunteers that performed online services for it during 1990s within the Community Leader Program. The program was ended by AOL in 2005 following US Department of Labor investigation.

The settlement was approved in February 2010 with a 15 million USD payment charged to AOL. After paying legal fees and restoring about 7,000 individual former Community Leaders with a total amount of ten million USD, AOL submitted five million dollars in donation to charities selected by the two former volunteers who suited the internet-based company.

The Community Leader Program

In the early 1990s, AOL online services establishes the Community Leader Program. It is composed of approximately 14.000 volunteers who are recruited from the most passionate and active users of a specific online forum. About 350 of them are teenagers with a crush for internet spending hours and hours within forum. They host chat rooms, monitor message boards and file libraries, provide customer service, teach online classes, manage forum content. Their tasks are assigned mirroring their preferences: if they are recruited among user of a car lovers forum, they probably are asked to moderate motors dedicated chat rooms.

They are not paid for their work, but AOL provides them with free services at the time it charges normal user to access to its services by a fee per hour. AOL gives them special accounts that allow them to access private areas on the AOL service or using leader reserved operational language. It even allows them to use their nickname in chat rooms to be identified as leaders.

Before serving AOL, Community Leaders must undergo a three months training program. Once definitely recruited, in addition to patrolling online, they must file timecards for shifts, submit reports of activities they performed, and work a minimum of four hours per week.

A former volunteer’s experience through AOL service

As reported by a former volunteer, an average weekly shift turns out to last about 15 – 20 hours a week. His work consists into chat hosting and forum moderation, not only for AOL but for its partner sites too sometimes. Three days a week, after school, this volunteer – who was a teenager while being a Community Leader – sits before its PC at home for a two hours long shift. At the end of webhosting and moderating chat, he fills a form submitting all the names of user who logged in and participated to the chat then files the report to AOL.

He eventually becomes a forum moderator whose duty consists in removing spam or content violations.

Actually, he has to make attention on who is entering or leaving the chat room. He copies all these names on an email text and sends it to AOL at the end of each shift.

What appears more fascinating to the volunteer is being a chat host, which turns out into enjoying Community Leaders’ private forums where they all hung out and become virtual friends while exchanging their mutual experiences and jokes.

AOL recruited volunteers among user who spent hours and dollars on internet

Another female volunteer recalls that AOL charged users with 3,50 USD for every hour spent online but offered most frequent users the chance to become remote staffers in exchange for free hours up to unlimited hours. But, when AOL moved to a flat-rate pricing system, the hundreds of dollars worth of free hours lose reason to be and more than half volunteers left. Remaining volunteers were rewarded with free accounts or AOL trinkets as tools and access that regular members don't have, and above all, recognized power over web people.

US Department of Labor investigated AOL for alleged labor laws violation

If you are a valuable PC user, it may happen that AOL wants you to become a PC help desk host, without asking your age or ignoring you being a teenager and not an adult. It must be pointed out that in early 90’s there was not an under 18 work policy. Eventually, US Department of Labor was interested to investigate by two unhappy volunteers who claimed the job they performed was an effective job and thus should have been retributed. Under pressure, and after some distressing but not useful actions aiming to preserve volunteers from adhere to claims, AOL dismisses in whirlwind all the Community Leader Program volunteers. It does not sound weird that the dismissal started from the younger volunteers. By 2000s, AOL volunteers do not longer provide customer service or technical support neither they have content-edit rigts.

Hiring employees to manage and post online content and run online communities would financially overcharge AOL, whose merging with Time Warner is draining tons of funds. The decision is to cease the volunteer program. In the exchange, AOL offers former Community Leaders 12 months of free service.

The lawsuit was certified with class-action status

The United States Federal Courthouse of New York City denies AOL's Motion to Dismiss and certifies the case for class-action status with dismissal of all community leaders under the age of 18 years. It orders AOL to provide the names and contact information for all former Community Leaders to give them the opportunity to join the class-action lawsuit. In May 2010 the United States for the Southern District of New York grants a 15 million dollars settlement between AOL and the Community Leaders giving final approval.

Work performed by volunteers was equivalent to employees’ job

The two volunteers who filed a class action lawsuit against AOL in May 1999, Brian Williams of Dallas and Kelly Hallissey of New York, claim that AOL volunteers performed work equivalent to employees and thus should be compensated according to the Fair Labor Standard Act, because of a significant amount of effort is required to work.

AOL states that Community User are not charged to access its services by the hour and this makes them save hundreds of dollars each month. In addition, volunteers were entered into agreement voluntarily with AOL.

The Court grants the 15 million USD settlement

While most content maintenance was performed by partner and internal employees, adjusting content design, hosting chat rooms and providing online help were tasks performed by Community leaders using a proprietary language and interface called RAINMAN. AOL was generally charging customers with a fee by the hour, but volunteers were compensated in free online time for each hour they worked.

During Department of Labor investigation but before entering to lawsuit, AOL changes its compensation policy for Community leaders charging them a reduced rate per month for their accounts and giving unlimited access by invoice. This led to a virtual protest headed by the two volunteers then starting effecting lawsuit. The whole AOL online environment contested the new charges the community leaders were now being asked to pay, compelling AOL to terminate the online working relationship with several of the Community Leaders involved.

The US Department of Labor dismissed AOL investigation without charges

Investigation of The Department of Labor on AOL's alleged labor law violations, while it came to no conclusion, demonstrated an employment relationship of AOL to over 6,000 members, as volunteers of the Community Leader Program, that eventually ended on June 8, 2005. They are parts of the largest class action lawsuit ever filed against an internet-based company and the third largest class ever involved in any lawsuit on a federal level in the United States.

The class action suit ended in a settlement approved in February 2010 by the Court, where AOL is charged with a 15 million USD payment. Five million USD are attorney and legal fees. Five million are divided among more than 7,000 individual former Community Leaders participating the lawsuit and the last third is donated to charities.

Labor laws are meant to avoid workers’ exploitation

The labor laws are meant to avoid exploitation of volunteers. They are offered with free services and privileges, the amount of which should cover federal minimum wage requirements to be legally accepted if they were employees. On the other side, volunteers agree to perform a public service – oriented work without pay, knowingly entering their agreements with the company. Some companies, however, compensate volunteers’ work with stock incentives or revenue sharing as a way to generate income.

Factors to differentiate workers and volunteers

Fair Labor Standard Act indicates requirement to difference among employee, independent contractor or volunteer. Factors to assess are permanence of the relationship, the amount and nature of control the employer has over the amount and the quality of work done, who profits from the relationship.

There are other companies attracting volunteers for their online services

Managing web sites thanks to volunteers’ work is not a single case interesting AOL. While there is not another company risking at high rate as AOL did before entering into settlement, there are other community sites, as About.com, relying on volunteers to perform online duties such patrolling chat rooms or producing weekly newsletters. It is easy to guess how they are potentially affected by violation of labor laws should they not retribute volunteers in a legal way.