Otey v. Crowdflower, Inc. et al

Filing 120

STIPULATION AND ORDER re 119 STIPULATION WITH PROPOSED ORDER RE LEAVE TO FILE SECOND AMENDED COMPLAINT TO ADD OPT-IN PLAINTIFF MARY GRETH AS ADDITIONAL NAMED PLAINTIFF filed by Christopher Otey. Signed by Judge Jon S. Tigar on June 17, 2013. (wsn, COURT STAFF) (Filed on 6/17/2013)

Ira Spiro (SBN 67641)
Jennifer Connor (SBN 241480)
2 II Justin Marquez (SBN 262417)
SPIRO MOORE LLP
3 111377 W. Olympic Blvd., Fifth Floor
Los Angeles California 90064
4 Telephone: [phone];
Fax: [phone]
'[e-mail]
[e-mail]
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Attorneys for Plaintiff CHRISTOPHER OTEY
JACQUELINE E. KALK (admitted pro hac vice)
LITTLER MENDELSON, P.C.
80 South 8 th Street, Suite 1300
Minneapolis, MN 55402.2136
Telephone: [phone]
Facsimile: 612.677.3139
[e-mail]
Attorneys for Defendants
CROWDFLOWER, INC., LUKAS BIEWALD
AND CHRIS VAN PELT

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[Additional counsel listed on the next page]
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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CHRISTOPHER OTEY, on behalf of
himself and all others similarly situated,
Plaintiff,

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V.

CROWDFLOWER, INC., LUKAS
BIEWALD AND CHRIS VAN PELT,

CASE NO. 3:12-cv - 05524- JST

STIPULATION RE: LEAVE TO FILE
SECOND AMENDED COMPLAINT TO
ADD OPT-IN PLAINTIFF MARY
GRETH AS ADDITIONAL NAMED
PLAINTIFF; [PROPOSED] ORDER
THEREON

Defendants.

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STIPULATION RE: LEAVE TO FILE SECOND AMENDED COMPLAINT;
CASE NO. 3:12-cv-095524-J5T

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William T. Payne (SBN 90988)
[e-mail]
Ellen M. Doyle (Pro Hac Vice)
edoyle@fdpklawcom
FEINSTEIN DOYLE
PAYNE & KRAVEC, LLC
429 Forbes Avenue, 17th floor
Pittsburgh, PA 15219
Telephone: [phone]
Fax: [phone]
Mark A. Potashnick (Pro Hac Vice)
[e-mail]
WEINHAUS & POTASHNICK
1 1500 Olive Blvd., Suite 133
St. Louis, Missouri 63141
Telephone: [phone]
Fax: [phone]
Attorney for Plaintiff CHRISTOPHER OTEY
ARTHUR M. EIDELHOCH, (Bar No. 168096)
[e-mail]
GALEN M. LICHTENSTEIN, (Bar No. 251274)
glichtensteinglittler.com
LITTLER MENDELSON, P.C.
650 California Street, 20 th Floor
San Francisco, California 94108.2693
Telephone: [phone]
Facsimile: 415.399.8490
KELLY D. REESE (admitted pro hac vice)
[e-mail]
LITTLER MENDELSON, P.C.
63 South Royal Street, Suite 901
Mobile, AL 36602.3218
Telephone: [phone]
Facsimile: 251-432-0427
Attorneys for Defendants
CROWDFLOWER, INC., LUKAS BIEWALD
AND CHRIS VAN PELT

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STIPULATION RE: LEAVE TO FILE SECOND AMENDED COMPLAINT;
CASE NO. 3:12-cv-095524-JST

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Plaintiff CHRISTOPHER OTEY ("Plaintiff') and Defendants CROWDFLOWER,

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INC., LUKAS BIEWALD, and CHRIS VAN PELT ("Defendants"), by and through their

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respective counsel, hereby enter into the following Stipulation Re: Leave To File Second

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Amended Complaint. Specifically, by and through this Stipulation, the parties request

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that the Court grant Plaintiff leave to file a Second Amended Complaint, in the form

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attached hereto as Exhibit "1" and which seeks to add current opt-in plaintiff, MARY

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GRETH ("Ms. Greth"), as an additional named Plaintiff. On April 26, 2013, Ms. Greth

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filed her Notice of Consent to Join FLSA Collective Action [D.E. 91], and now Ms. Greth

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seeks to join the lawsuit in the capacity of a representative named Plaintiff. The

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proposed Second Amended Complaint with its added allegations regarding Ms. Greth

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reflects the same. The parties mutually request that the Court approve this Stipulation

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and enter an order in accordance thereon.

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STIPULATION
1.

The original Complaint in this action was filed on October 26, 2012 against

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Defendants Crowdflower, Inc.; Lukas Biewald; and Chris Van Pelt. The operative First

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A ended Complaint ("FAC") was filed on December 20, 2012. [D.E. No. 271 Defendants'

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responded with the operative Defendants' Amended Answer and Defenses to First
Amended Complaint filed on April 23, 2013 [D.E. No. 891.
2.

Plaintiff Christopher Otey brings a Fair Labor Standards Act ("FLSA'')

collective action and state law class action asserting the alleged failure of Defendants to
pay him and other individuals performing online crowdsourced work minimum wages
pursuant to federal and Oregon state laws. The crux of the parties' dispute is whether
Plaintiff and other persons performing crowdsourcing work for Defendants are governed

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by an employer/employee or an independent contractor relationship.
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3.

On April 26, 2013, current opt-in plaintiff Mary Greth filed her Notice of

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Consent to Join FLSA Collective Action. [D.E. 91] Further, the parties have been, and
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STIPULATION RE: LEAVE TO FILE SECOND AMENDED COMPLAINT;
CASE NO. 3:12-cv-095524-JST

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continue to, exchange formal discovery as it pertains to both Christopher Otey and Mary

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Greth.

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Plaintiff hereby moves the Court for leave to file a Second Amended

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Complaint ("SAC") that would add current opt-in plaintiff Mary Greth as a newly - named

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plaintiff and assert the same FLSA pending cause of action and allegations against

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Defendants.

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6.

Defendants, while denying all of Plaintiff s allegations, have no objection to

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the filing of the proposed SAC seeking to add Mary Greth as a newly-named plaintiff

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along with current named plaintiff Christopher Otey.

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The parties mutually request that the Court grant Plaintiff leave to file a

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Second Amended Complaint in the form proposed herein within 5 days after entry of this

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order. The parties further mutually agree that Defendants shall have thirty (30) day

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after the filing of Plaintiff s Second Amended Complaint to file a responsive pleading.

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Dated: June 17, 2013

Respectfully submitted,
LITTLER MENDELSON, P.C.

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By: /s/ Jacqueline E. Kalk
JACQUELINE E. KALK
ARTHUR M. EIDELHOCH
GALEN M. LICHTENSTEIN
KELLY D. REESE
Attorneys for Defendants
CROWDFLOWER, INC., LUKAS
BIEWALD AND CHRIS VAN PELT

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Dated: June 17, 2013

SPIRO MOORE LLP
By:

/s/ Jennifer L. Connor
JENNIFER L. CONNOR
IRA SPIRO
JUSTIN MARQUEZ
Attorneys for Plaintiffs CHRISTOPHER OTEY
and MARY GRETH

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STIPULATION RE: LEAVE TO FILE SECOND AMENDED COMPLAINT;
CASE NO. 3:12-cv-095524-J5T

[PROPOSED] ORDER

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Good cause appearing therefore, the foregoing Stipulation Re: Leave To File Second Amended
Complaint ("Stipulation") is hereby approved and it is hereby ordered that:
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Plaintiff is granted leave to file a Second Amended Complaint in the form attached as

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"Exhibit 1" to the parties' Stipulation. The Second Amended Complaint shall be filed and served on

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Defendants' counsel of record within 5 days after entry of this Order.

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Upon the filing of the Second Amended Complaint, Defendants shall have 30 days

thereafter to file a responsive pleading.

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PURSUANT TO STIPULATION, IT IS SO ORDERED

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Dated: June 17, 2013

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HONORABLE JON S. TIGAR
UNITED STATES DISTRICT COURT JUDGE

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STIPULATION RE: LEAVE TO FILE SECOND AMENDED COMPLAINT:
CASE NO. 3:12-cv-095524-JST

EXHIBIT 1

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William T. Payne (SBN 90988)
Ellen M. Doyle (Pro Hac Vice)
Edward J. Feinstein (Pro Hac Vice)
Feinstein Doyle Payne & Kravec, LLC
429 Forbes Avenue, 17th Floor
Pittsburgh, PA 15219
412-281-8400 (T), 412-281-1007 (F)
[e-mail]
edoylegfdpklaw.com
efeinsteingfdpklaw.com
Mark A. PotashMck (Admitted Pro Hac Vice)
Weinhaus & Potashnick
11500 Olive Boulevard, Suite 133
St. Louis, MO 63141
314-997-9150(T), 314-997-9170 (F)
[e-mail]
Ira Spiro (SBN 67641)
Jennifer L. Connor (SBN 241480)
Justin F. Marquez (SBN 262417)
Spiro Moore LLP
11377 W. Olympic Blvd, 5th Floor
Los Angeles, CA 90064
310-235-2468 (T), 310-235-2456 (F)
iragspiromoore.com
jennifergspiromoore.com
[e-mail]

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Attorneys for Plaintiffs
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

CHRISTOPHER OTEY, MARY GRETH,
on behalf of themselves and all others
similarly situated,
Plaintiffs,

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V.
CROWDFLOWER, INC., LUKAS
BIEWALD AND CHRIS VAN PELT,
Defendants.

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SECOND AMENDED CO P AINT

I CASE NO. C 12-5524 CRB
' Judge: Hon. John S. Tigar
SECOND AMENDED COMPLAINT
FLSA COLLECTIVE ACTION AND
STATE LAW CLASS ACTION
DEMAND FOR JURY TRIAL

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1.

CrowdFlower, Inc. ("CrowdFlower") describes itself as providing the - World's

Largest Workforce." However, it pays its workforce wages well below the required federal and state
3 minimum wage rates. In many instances, CrowdFlower fails to pay any cash wages at all for work
4 performed. CrowdFlower's deliberate failure to pay its workers their earned minimum wages
5 violates the Fair Labor Standards Act ("FLSA") and Oregon law. Plaintiffs and all other similarly
6 situated persons work or previously worked for CrowdFlower as online providers of simple
7 repet tive tasks. As described herein, CrowdFlower substantially monitored, supervised and
8 controlled their work. This lawsuit is brought as (a) a collective action under the FLSA to recover
9 unpaid minimum wages and liquidated damages owed to Plaintiffs and all other similarly situated
10 persons employed by CrowdFlower; and (b) a class action under Oregon law to recover unpaid
1.1 minimum wages and penalty wages due to Plaintiff Christopher Otey and all other similarly situated
12 workers employed by CrowdFlower in Oregon. Plaintiffs allege the following based upon
13 information and belief and the investigation of their counsel:
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INTRODUCTION

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2.

This is a collective action brought under the FLSA, 29 U.S.C. § 201 et seq., on behalf

17 of Plaintiff Christopher Otey, Plaintiff Mary Greth, and a nationwide class of all people who, on or
18 after the date three years before the filing of the complaint in this action, performed crowd-sourced
19 work in the United States online in response respond to any online request by CrowdFlower tbr
20 crowd-sourced work, or any online notification by CrowdFlower that crowd-sourced work was
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available (hereinafter collectively "Workers"). The United States includes all 50 states, all territories

22 of the United States and the District of Columbia, and all other places where the FLSA applies.
3.

This is also a class action brought by Plaintiff Otey under ORS §§ 653.055, 652.150

24 and 652.200 on behalf of all Workers in Oregon within the six years preceding the filing of this
25 Complaint (collectively "Oregon Workers") who have not been paid Oregon's minimum wage.
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4.

CrowdFlower is an internet based technology company that was established in late

27 2007. It now describes itself as providing the "World's Largest Workforce." Although the majority
28 of the work that CrowdFlower performs is for corporations operating in the United States,
SECOND AMENDED COMPLAINT

1 particularly very large employers, and although approximately half of CrowdFlower's work force
2 lives in the United States, CrowdFlower has failed to pay minimum wages required by federal and
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state law.

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5.

Plaintiffs allege that CrowdFlower's conduct gives rise to claims for relief for

5 violations of the minimum wage provisions of the FLSA, 29 U.S.C. § 206(a), and Oregon law, ORS
6 §§ 653.025 and 652.150.
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PARTIES

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6.

Plaintiff Otey is currently a resident of Astoria, Oregon. In 2012, and possibly also

10 late 2011, Plaintiff Otey was an employee of CrowdFlower, employed to perform simple repetitive
11 online tasks for the benefit of CrowdFlower while under CrowdFlower's supervision and control.
12 Plaintiff Otey's consent to be a party plaintiff in an FLSA claim is already filed with this Court as
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"Exhibit 1" to the initial complaint.
7.

Plaintiff Greth is currently a resident of Milledgeville, Georgia. From approximately

15 2010 to 2012, Plaintiff Greth was an employee of CrowdFlower, employed to perform simple
16 repetitive online tasks for the benefit of CrowdFlower while under CrowdFlower's supervision and
17 control. Plaintiff Greth's consent to be a party plaintiff in an FLSA claim was already tiled with this
18 Court on April 26, 2013, Docket Number 91.
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8.

CrowdFlower is a Delaware corporation which maintains its principal place of

20 business at 2111 Mission Street, Suite 302, San Francisco, California, 94110. From its inception,
21 CrowdFlower has used technology to distribute to a large work force simple repetitive tasks which
-r) can be better performed by human labor than computers. CrowdFlower is and has been the
23 employer of Plaintiffs and the other similarly situated Workers and putative class members with
24 respect to the work performed by them. CrowdFlower engages in interstate commerce and has more
25 than $500,000.00 in annual dollar volume of business.
9.
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CrowdFlower was founded in 2007 by Lukas Biewald ("Biewald") and Chris Van

Pelt ("Van Pelt").

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SECOND AMENDED COMPLAINT

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10.

Biewald is the current Chief Executive Officer ("CEO") of the company and Van Pelt

" is the current Chief Technology Officer ("CTO").
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11.

Biewald and Van Pelt have held significant ownership interests in CrowdFlower.

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12.

Biewald and Van Pelt have exercised control over the nature and structure of

5 CrowdFlower's employment relationships, exercised economic control over those employment
6 relationships, held the power to hire and fire Workers, supervised and controlled conditions of
7 employment, determined the rate and method of payment, and maintained employment records.
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JURISDICTION AND VENUE

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13.

The FLSA authorizes court actions by private parties to recover damages for violation

11 of the FLSA's wage and hour provisions. Jurisdiction over Plaintiff's FLSA claim is based on 29
12 U.S.C. § 216(b) and 28 U.S.C. § 1331.
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14.

Oregon law authorizes court actions by private parties to bring claims to recover

14 damages for violation of Oregon's minimum wage requirement (ORS § 653.055) and to recover
15 damages for Oregon's requirement to promptly pay wages due upon cessation of employment (ORS
16 § 652.150). This Court has supplemental jurisdiction over the state law claims under 28 U.S.C. §
17 1367(a). This Court also has subject matter jurisdiction over this case under 28 U.S.C. § I332(d)(2)
18 because the claim is brought as a class action between citizens of different states and the amount in
19 controversy exceeds $5,000,000, exclusive of interest and costs.
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15.

Venue is proper within this judicial district because Crowdflower maintains offices,

has agents, transacts business and is found within this judicial district. Many other affected persons
can be found in this judicial district, and Crowdflower has received substantial compensation from

23 such transactions and business activity in this judicial district. In addition, in a statement of written
24 terms which CrowdFlower published on its website, CrowdFlower asserted that any action against it
25 must be brought in the Northern District of California.
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SECOND AMENDED COMPLAINT

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FACTUAL ALLEGATIONS

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CrowdFlower's Business Model
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On its website at http://www.CrowdFlower.coml Defendant CrowdFlower advertises

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that it has "The World's Largest Workforce" where one may - [i]nstantly hire millions of people to

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collect, filter, and enhance your data." CrowdFlower's business model is to maintain a large

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dispersed workforce with Workers working on their own computers to perform small and simple

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repetitive parts of larger tasks. Typically, the tasks involve large projects for large companies, such

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as identifying the content of photographs. CrowdFlower divides the large projects into small and

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simple repetitive tasks which it assigns to its workforce ("crowdsourcing"). CrowdFlower's

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business model depends on its proprietary computer systems, software, logic and algorithms, which

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allow CrowdFlower to instruct, guide, supervise and control the maimer of performing the task and

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to provide significant quality control of the work performed by these Workers.

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17.

CrowdFlower summarized on its website, "CrowdFlower takes large, data-heavy

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projects and breaks them into small tasks that are distributed to more than a million on-demand

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contributors globally." See http://crowdflowencomigcneraliprivacy.html .

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CrowdFlower has a webpage which divides its - Community" into those who "provide

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work" and those who - do work." Those providing work are asked if they are "interested in

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displaying microtasks" to which they can respond "Yes, I want to provide work." CrowdFlower's

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website also asks persons if they are interested in "completing tasks in exchange for compensation,"

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to which they can respond "Yes, I want to do work." See hap:de owdtlow

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CrowdFlower assigns the Workers tasks to be done at CrowdFlower's specific

request. Thus, CrowdFlower suffers and permits them to work for its benefit.
20.

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in/channel.

The Contributor's performance of the small repetitive tasks requested by

CrowdFlower constitutes the core business of CrowdFlower and core service offered by
CrowdFlower to its customers.

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SECOND AMENDED COMP A T

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21.

In an interview by Sramana Mitra posted online in Fall 2011, Biewald described

2 CrowdFlower's business model as follows: 1
Our business model is pretty simple. We quote customers the price for
completed tasks, and upon completing those tasks receive payment regardless
of the cost we incur competing those tasks. We assume the price risk. Let's
suppose a company has a large directory of businesses and they want to
provide those addresses to their sales force. However, before sending
salespeople to those addresses they want to validate that those are the correct
addresses. Convenience stores are a good example because they close and
open new ones all the time. You don't want to send a salesperson to a store
that has been shut down.

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That company would then have a task of checking all of the addresses they
have in their directory. A project that we work for them would then turn into
us checking a million addresses for them at the cost of 1 million dollars. I am
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making those numbers up, but it conveys the concept. The first thing we will
do when we receive the task is to break it up into pieces. The first step would
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be to find the website for the business. The second person would check the
11 work conducted by the first person. If they can't find the business online then
a third person could be tasked to call the business. If that does not work out
then a fourth person could then be tasked to physically go see the business.
Each task is increasingly expensive.
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Anyone can put jobs online. The CrowdFlower technology that actually
makes this work for big companies is the quality control. We keep track of
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people. We recognize people that have done good work in the past and give
them access to higher paying jobs, but we still watch and check up on you
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10% of the time to make sure you are still doing a good job.
16 littp://w v v.sramanamitra.com/2011/10/01/crowdsourcing-repetitive-tasks-crowd flower- tbunder8

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lukas-biewalil-part-3/.

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Skills Required

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22.

Biewald admits that CrowdFlower does not have any requirements for its workers and

20 no special skill is required. http://www.youtube.com/watchN=U408RYtcGc4.

CrowdFlower's Supervision and Control

http://www.sramanamitra.comi201. 1/09/29/crowdsourcing-repetiti ve-tasks-crowdflower-founder'4 lukas-biewalcl-part-1; http://www.sramanamitra.comI2011/09/30/crowdsourcing-repetitive-tasks crowdflower-founder-lukas-biewald-part-2/; http://www.sramanamitra.com/2011/10/01/
crowdsourcin-repetitive-tasks-crowdflower-tounder-lukas-biewald-part-3/; http://www.
26 sra manamitra.co m120 11/10/02/crowdsourcing repetitive tasks crowd flower- founckr-lukas-biewaklpart-4; http://www.sramanamitra.com/2011/10/03/crowd sourcint4-repetitive-tasks-crowthlower27 lounder-lukas-biewald-part-5; http://www .sramanamitra.com/2011/10/04/crowdsourcing-repetitive tasks-crowd tlo wer- tbunder-lukas-hiewald-part-6/; and http://www.sramanamitra.com ;20 I I/ I 0/05/
28 crowdsourcing-repetitive-tasks-crowdtlower-founder-lukas-biewald-part-7/.
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SECOND AMENDED COMPLAINT

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23.

In the same interview, Biewald also stated that CrowdFlower carefully monitors the

2 quality and accuracy of the work performed by its workforce. He stated that one method of quality
3 control used by Crowdflower is assigning the same task to more than one person to compare
4 outcomes. CrowdFlower creates different levels and qualities of work depending on its level of
5 "trust" of the person performing the work. Those less trusted workers received lower paying tasks.
6 Work requiring more accuracy for which CrowdFlower charged its customers higher rates was
7 distributed to those in its workforce with higher accuracy rates. http://www.youtube.com/watch?v=
8 U408RYtcGc4.
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24.

CrowdFlower provides its Workers step-by-step instructions to perform the work in

10 accordance with CrowdFlower's methods and standards.
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25.

CrowdFlower's computer programs and interfaces guide its Workers through each

12 step of each assigned tasks so that tasks must be performed in accordance with CrowdFlower's
13 methods and instructions.
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26.

CrowdFlower's July 2012 "Contributor Channel Handbook (Frequently Asked

15 Questions)" describes the "basic worker flow" as follows:
View available CrowdFlower tasks (I min)
Again this is the list of all tasks available within your channel
a.
Select specific CrowdFlower task (1-2 min)
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This is when our Platform and your service start tracking
a.
worker efforts
Enter Training Mode (10-15 min)
3.
Read task-specific instructions
a.
Submit answers to tasks until CrowdFlower establishes worker
b.
Trust (which means they have proved to us they are doing
quality work)
Enter Work Mode (duration controlled by worker)
4.
Worker Trust is established, and they begin to work in earnest
a.
on the task
Convert
5.
The worker has submitted Trusted results that add up to the
a.
Unit Conversion Amount displayed in the task header.
lutp:(1 pub icassets.s3.amazonaws.corn/channels , CrowdFlower Contributor C
hannel Handbook JULY2012.pdf
1.

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7.

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CrowdFlower provides its Workers online instructions for obtaining better results.
CrowdFlower provides its Workers online instructions for handling problems.

SECOND AMENDED COMPLAINT

7

29.
30.
3

CrowdFlower informs its Workers of errors in their work.
Crowdflowers uses algorithms to gauge its Workers' proficiency. See

missionlocal.org/2010/11/cro% 'dflower/.

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31.

CrowdFlower informs its Workers that it tracks their "accuracy as they work."

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32.

CrowdFlower further advises its Workers that "Our system will automatically accept

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responses when a participant submits a HIT or completes an entire offer, as long as that participant's

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contribution meets our accuracy requirements."

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33.

CrowdFlower may ban or tlag Workers if they - have submitted more wrong answers

than our accuracy threshold will allow multiple times."

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34.

CrowdFlower may ban or flag Workers from a single job or from jobs in general.

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35.

CrowdFlower charges its customers more for higher accuracy work, therefore

CrowdFlower is incentivized to supervise, monitor and quality-check its Workers.
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CrowdFlower's Wage Rates
36.

CrowdFlower routinely pays its Workers far less than the minimum wage required by

the FLSA, 29 U.S.C. § 206(a), and Oregon law, ORS § 653.025.
37.

In the March 30, 2010 interview, Biewald admitted that people performing work for

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CrowdFlower were paid about $2-3 dollars per hour. See http://www.vottrube.comIwatch ?v

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-1.J408RYtcGc4.

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38.

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Plaintiffs Otey and Greth believe that the actual hourly rate that they received for

work performed for CrowdFlower was less than the range admitted by Biewald in the March 30,
2010 interview.

-y)
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39.

CrowdFlower also frequently provides its Workers non-cash compensation in lieu of

cash wages, including for example online game credits and points for various award programs.
40.

In the same interview with Sramana Mitra, Biewald admitted that CrowdFlower earns

a profit by charging large customers more than its costs. Of course, CrowdFlower can bid the work
more cheaply, and provide more attractive pricing to its customers, because it does not pay the
minimum wage required by federal and state law.

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http.,

Ww

ramanaitra. com/2011/10/01/
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crowdsourcintz-repetitive-tasks-crowdtlower-founderlukas - hiewald-part -3 /.
SECOND AMENDED COMPLAINT

8

1 Willfulness
41.

CrowdFlower's online postings show that it is well aware of its failure to comply with

3 federal and state minimum wage laws.
4

42.

In the June 22, 2011 interview, Biewald was asked about paying m n mum wages in a

global economy. Biewald justified CrowdFlower's failure to pay minimum wages on the grounds
6 that (a) there was no enslavement of CrowdFlower's work force; (b) there was no trickery used to
7 obtain the workforce's services; (c) there were no threats made to CrowdFlower's work force; and
8 (d) CrowdFlower was not operating a "digital sweat shop." Biewald had no explanation for why
9 CrowdFlower did not pay minimum wages under federal or state law. See http://www.youtube
10 .com/ 'atch?v=h1NCVtlxkAY.

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43.

In an interview with BBC News published October 21, 2010, Biewald stated, "I love

1 1 it because we almost trick the game players into doing something useful for the world while playing
13 these games. Just to do ten minutes of real work that a real company can use, and we'll give you a
14 virtual tractor." See http://www.bbc.eo.ukinews/business-11600 902.
15

44.

In the same June 22, 2011 interview, Biewald stated, "You know, I think there should

16 be some minimum wage, but I don't think people should set the minimum wage based on what's a
17 living wage or, like, what's fair. It should be like how do we get companies to stay in the business
18 and employ the most people at the highest rate." Id.
19

45.

In a November 5, 2010 article published by missionlocal.org , Biewald was quoted as

20 saying, "In terms of regulatory issues, the law is not equipped to deal with what we are doing." See
21

http://missionlocAorg/2010/11/crowdtlower/.

46.

CrowdFlower maintains data from millions of pieces of work performed by its

23 Workers from which it determines the average length of time consumed by performing particular
14

tasks. Therefore, it can easily determine and monitor hourly wage rates paid to its Workers.

15

CrowdFlower's Size and Proliferation in the United States

26

47.

CrowdFlower has expanded exponentially since its founding in 2007.

27
18

SECOND AMENDED COMPLAINT

9

1

48.

In a March 30, 2010 interview, Biewald admitted that CrowdFlower had used more

than 200,000 United States Workers in the preceding year and more than half of its work was
3
4

performed in the United States. See http://www.youtube.comlwateh ?v-U4O8RYteGc4.
49.

In an August 18, 2010 interview, Biewald was quoted as describing CrowdFlower as

5

providing - labor on demand" which means "that you can access tens of thousands, or hundreds of

6

thousands, of people instantly."

7

published online at Imp

8

50.

See Mac Slocum, "Thousands of workers are standing by",

radar.oreilly.com/20 I 0/08/thousands - of- workers - are - stand.html.

In a June 22, 2011 interview on "This Week in Start Ups", Biewald stated that

9

CrowdFlower can perform three human years' worth of work per day, that CrowdFlower had used

10

more than one million people to perform tasks, and most of the work that CrowdFlower was

11

performing was for large companies that wanted lots of work performed quickly for "big enterprise

12

jobs" due to CrowdFlower's ability to scale up bigger than anyone else. See http://www.youtube.

13

comiwatch?v= hhqCVtlxkAY.

14

51.

In Sramana Mitra's article published in Fall 2011, Biewald described the work

15

pertbrmed by CrowdFlower as approximately 50% workers in the U.S. and 50% workers from other

16

countries, depending upon whether the requesting companies have crowdsourced tasks that have

17

cultural components for which they want only Workers in the U.S.

18

201 1 / 10/0 1 /crowdsourcmg-repetitive-tasks-crowdflower-tbunder-lukas-biewald-part-3/.

19
)

0

21

52.

24
15

Thus, much of CrowdFlower's work is performed by Workers working in the United

States, but CrowdFlower pays those Workers sub-minimum third world wages.
Failure to Pay Wages Upon Cessation of Employment
53.

/3

hitp://w ww.sramanamitra.comi

Plaintiff Otey and numerous other Oregon Workers are no longer employed by

CrowdFlower.
54.

CrowdFlower has willfully failed to pay Plaintiff Otey and the other Oregon Workers

all wages due at the time their employments ceased or since that time.
55.

More than 48 hours, excluding Saturdays, Sundays and holidays, have lapsed since

the wages became due and payable to Plaintiff Otey and other Oregon Workers.
28
SECOND AMENDED COMPLAINT

10

1 Pre-Suit Notice
56.

2

Prior to filing suit, Plaintiff Otey's counsel provided a pre-suit written notice of

3 nonpayment pursuant to ORS §§ 652.150(2) and 652.200(2). A true copy of that written notice is
4 attached as -Exhibit 2."
57.

5

Defendants failed to pay all wages due within 12 days of receipt of Plaintiffs written

6 notice.
7
8

FIRST CLAIM FOR RELIEF

9

VIOLATION OF THE FAIR LABOR STANDARDS ACT OF 1938

10

58.

Plaintiffs reassert and re-allege the allegations set forth above.

11

59.

At all relevant times herein, Plaintiffs and all others similarly situated Workers have

12 been entitled to the rights, protections, and benefits provided under the FLSA, 29 U.S.C. §§ 201, et
13
14

seq.

60.

The FLSA regulates, among other things, the payment of minimum wage by

15 employers whose employees are engaged in interstate commerce, engaged in the production of
16 goods for commerce, or employed in an enterprise engaged in commerce or in the production of
17 goods for commerce. 29 U.S.C. §206(a).
18

61.

Defendants are subject to the minimum wage requirements of the FLSA because

19 CrowdFlower has been an enterprise engaged in interstate commerce during times relevant and its
20 Workers have been engaged in commerce during such times.
21

62.

Defendants are "employers" within the FLSA's broad definition as they have suffered

or permitted the Workers to work. 29 U.S.C. §§ 203(d) & (g).
23

63.

Defendants Biewald and Van Pelt are "employers" within the FLSA's broad

24 definition, and are thus jointly and severally liable with CrowdFlower, as Biewald and Van Pelt have
25 held significant ownership interests in CrowdFlower and they have exercised control over the nature
26 and structure of CrowdFlower's employment relationships, exercised economic control over those
27 employment relationships, held the power to hire and fire Workers, supervised and controlled
28
SECOND AMENDED COMPLAINT

1 conditions of employment, determined the rate and method of payment, and maintained employment
records.
64.

3

Plaintiffs and the other similarly situated Workers are "employees" under the FLSA.

4 29 U.S.C. § 203(e).
65.

5

Pursuant to Section 6 of the FLSA, 29 U.S.C. § 206, employees have been entitled to

6 compensation at a rate of at least $7.25 per hour since July 24, 2009.
66.

7

On and after the date that is three years before the date the complaint in this action

8 was filed, the Employees performed work for Defendants, and Defendants failed to pay them at least
9 the minimum wage required by the FLSA.
67.

10

Defendants' conduct was willful because, among other things. they knew that they

11 were paying their employees less than the minimum wage, they admitted failure to pay the minimum
12 wage in public interviews, they possessed data which would have shown they were not complying
13 the minimum wage laws, and because it was an essential component of their business model,
14 competitiveness, and profit-making to violate the minimum wage laws and to pay their employees
15 below the minimum wage.
68.

16

Pursuant to their policy and practice, Defendants wi lfully violated the FLSA by

17 refusing and failing to pay Plaintiffs and other similarly situated Workers the federal minimum
18 wage.
19

69.

Plaintiffs and all similarly situated Workers are victims of a uniform and employer-

20 based compensation policy. This uniform policy, in violation of the FLSA, has been applied, and
21 continues to be applied, to all Workers in the United States and its territories.
70.

Plaintiffs and all similarly situated Employees are entitled to damages equal to the

23 difference between the minimum wage and whatever actual cash wages they were paid by
24 Defendants for work (a) on or after the date that is three years after the filing of the complaint in this
25 action, and (b) for work performed before that date during periods of equitable tolling, which should
26 apply because among other things, Defendants acted willfully as alleged herein.
27

71.

Defendants have acted neither in good faith nor with reasonable grounds to believe

28 that their actions and omissions were not a violation of the FLSA, and as a result, Plaintiffs and other
SECOND AMENDED COMPLAINT

12

1 similarly situated Workers are entitled to recover an award of liquidated damages in an amount equal
to the unpaid minimum wages under Section 16(b) of the FLSA, 29 U.S.C. § 216(b). Alternatively,
3 should the Court find that Defendants acted in good faith or with reasonable grounds to believe that
4 they were not violating the FLSA, Plaintiffs and all similarly situated Workers are entitled to an
5 award of prejudgment interest at the applicable legal rate.
6

72.

As a result of the aforesaid willful violations of the FLSA's minimum wage

7 provisions, minimum wage compensation has been unlawfully withheld by Defendants from
8 Plaintiffs and all similarly situated Workers. Accordingly, Defendants are liable under 29 U.S.C.
§ 216(b), together with an additional amount as liquidated damages, pre-judgment and post10 judgment interest, reasonable attorney ' fees, and costs of this action.
11
COLLECTIVE ACTION ALLEGATIONS

11
13

73.

Plaintiffs brings Count I under the FLSA as an "opt-in" collective action on behalf of

14 similarly situated Workers. 29 U.S.C. § 216(b).
15

74.

At all relevant t mes, Plaintiffs and the other Workers are and have been similarly

16 situated, have had substantially similar job requirements and pay provisions, and have been subject
17 to CrowdFlower's common uniform computerized practices, policies, programs, procedures,
18 protocols and plans of willfully failing and refusing to pay them at the legally required minimum
19 wage rates for similar work performed.
20
1

75.

Plaintiffs, individually and on behalf of other similarly situated Workers, bring Count

1 I seeking relief on a collective basis challenging CrowdFlower's practice of failing to pay Workers
the federal minimum wage. The number and identity of other plaintiffs yet to opt-in and consent to

13

be party plaintiffs may be determined from CrowdFlower's records, and potential class members

24 may easily and quickly be notified of the pendency of this action by electronic mail.

CLASS ACTION ALLEGATIONS

26
27

76.

Plaintiff Otey brings Counts II and III as a class action under Fed. R. Civ. P. 23, on

28 behalf of himself and as Class Representative of the following person (the "Oregon Class"):
SECOND AMENDED COMPLAINT

13

All current and former Workers who worked by CrowdFlower in Oregon at any time
from the date that is six years before the filing of this First Amended Complaint until
the Date Class Notice is Sent to the class..

1

3
77.
4
5

adequacy, predominance and superiority requirements of a class action pursuant to Fed. R. Civ. P.
/3.

6
78.
7
8
9

Plaintiff Otey's state law claims satisfy the numerosity, commonality, typicality,

The Oregon Class satisfies the numerosity standard of Fed. R. Civ. P. 23(a)(1) as,

upon information and belief, the Oregon Class consists of hundreds, if not thousands, of persons who
are geographically dispersed. As a result, joinder of all Class members in a single action is
impracticable. Class members may be informed of the pendency of this class action through

10
electronic mail.
11
79.
1/
13

Questions of fact and law common to the Oregon Class predominate over any

questions affecting only individual members. The questions of law and fact common to the Oregon
Class arising from CrowdFlower's actions include, without limitation, the following:

14
a.
15

Whether Plaintiff Otey and the members of the Oregon Class worked in Oregon for
CrowdFlower performing repetitive online tasks.

16
b.

Whether CrowdFlower paid Plaintiff Otey and the Oregon Class less than Oregon's

17
minimum wage.
18
c.
19

Whether CrowdFlower maintained accurate time records of the time spent by Plaintiff
Otey and Oregon Class as required by Oregon law, ORS § 653.045.

20
d.
/1

Whether CrowdFlower's failure to pay Oregon's state minimum wage entitles Oregon
Workers to recover penalty wages pursuant to ORS § 652.150.

80.

/3

Plaintiff Otey's claims are typical of those of the Oregon Class in that he is a member

of the Oregon Class, the Oregon Class members have been employed in the same position as
24

Plaintiff Otey, and the Oregon Class has been subjected to the same unlawful practices as Plaintiff
Otey.
81.

27

Plaintiff Otey is an adequate representative of the Oregon Class because his interests

do not conflict with the interests of the Oregon Class members he seeks to represent, and he has

18

retained counsel competent and experienced in conducting complex class action litigation including
SECOND AMENDED COMPLAINT

14

1 wage and hour claims. Plaintiff Otey and his counsel will adequately and vigorously protect the
2 interests of the Oregon Class. Plaintiff's counsel have agreed to advance him the costs of the
3 litigation contingent upon the outcome so that he can adequately pursue these claims.
4

82.

A class action is the appropriate method for the fair and efficient adjudication of this

5 controversy because CrowdFlower has acted or refused to act on grounds generally applicable to the
6 Oregon Class and the presentation of separate actions by individual class members creates a risk of
7 inconsistent and varying adjudications, establishing incompatible standards of conduct for
8 CrowdFlower, and/or will substantially impair or impede the ability of Oregon Class members to
9 protect their interests.
83.

10

A class action is superior to other available means for the fair and efficient

11 adjudication of this dispute because the damages suffered by each individual class member likely
12 will be relatively small especially given CrowdFlower's business model of distributing tasks
13 amongst numerous Workers. Thus, the claims cannot be efficiently litigated as individual actions
14 given the burden and expense of the complex 1 tigation necessitated by CrowdFlower's business
15 model and practices. Moreover, even if the Oregon Class members could afford individual actions,
16 it would still not be preferable to class-wide litigation. Maintenance of separate actions would place
17 a substantial and unnecessary burden on the courts and could result in inconsistent adjudications,
18 while a single class action can determine, with judicial economy, the rights of all Class members.
19
20

SECOND CLAIM FOR RELIEF

21

VIOLATION OF OREGON'S MINIMUM WAGE LAW
84.

Plaintiff Otey reasserts and re-alleges paragraphs 1 through 57 and 76 through 83

85.

The FLSA's "savings clause" allows states to provide greater protection to employees

23 above.
24

25 working in their jurisdictions than those provided by the FLSA. 29 U.S.C. § 218(a).
86.

In accordance with the FLSA's "savings clause," Oregon has enacted a minimum

1

7 wage law more favorable to employees than the FLSA. ORS § 653.025.

1

8
SECOND AMENDED COMPLAINT

15

1

87.

At all relevant times herein, Plaintiff Otey and all others similarly situated Oregon

Workers have been entitled to the rights, protections, and benefits provided under Oregon's
3 minimum wage law. Id.
4

88.

Oregon's minimum wage law regulates the payment of minimum wage by statutory

5 "employers." Id.
6

89.

Defendants are - employers" within Oregon's broad definition as they have suffered

7 or permitted Plaintiff Otey and the other Oregon Workers to work within the State of Oregon. ORS
8 §§ 653.010(2) & (3).
9

90.

Defendants Biewald and Van Pelt are "employers" within Oregon's broad definition,

10 and are thus jointly and severally liable with CrowdFlower, as Biewald and Van Pelt have held
11 significant ownership interests in CrowdFlower and they have exercised control over the nature and
12 structure of CrowdFlower's employment relationships, exercised economic control over those
13 employment relationships, held the power to hire and fire Workers, supervised and controlled
14 conditions of employment, determined the rate and method of payment, and maintained employment
15 records.
16

91.

Plaintiff Otey and the other Oregon Workers are "employees" under Oregon law as

17 Defendants suffered or permitted them to work within the State of Oregon. ORS § 653.010(2).
18

92.

Pursuant to ORS § 653.025, Oregon employees have been entitled to compensation at

19 a rate of at least $7.80 per hour during 2007, at least $7.95 per hour during 2008, at least $8.40 per
20 hour from 2009 through 2011, and at least $8.50 in 2012.
93.

During the period six years preceding filing of this Complaint, Defendants have

violated Oregon's minimum wage requirement by paying their Workers cash wages less than
23 Oregon's minimum wage on a workweek basis.
24

94.

Defendants conduct was willful because they knew or should have known that their

25 compensation policy and practice failed to compensate the Workers at the lower federal minimum
26 wage as they admitted failure to pay Oregon's minimum wage in public interviews, they have
27 expressed a belief that minimum wages should not be based on a - living wage" or even - what's fair"
28
SECOND AMENDED COMPLAINT

16

1 in a public interview, and they possessed data which could have been used to determine minimum
2 wage compliance.
3

95.

Plaintiff Otey and all similarly situated Oregon Workers are victims of a uniform and

4 employer-based compensation policy. This uniform policy, in violation of the Oregon minimum
wage law, has been applied, and continues to be applied, to all Oregon Workers.
6

96.

As a result of the aforesaid violations of the Oregon's minimum wage provisions,

7 minimum wage compensation has been unlawfully withheld by Defendants from Plaintiff Otey and
8 all similarly situated Oregon Workers. Accordingly, Defendants are liable under ORS § 653.055 for
9 the full amount of the unpaid minimum wages and reasonable attorney's fees.
10
11

THIRD CLAIM FOR RELIEF

12

VIOLATION OF THE OREGON'S WAGE PAYMENT LAW

13

97.

Plaintiff Otey reasserts and re-alleges 1 through 57 and 76 through 96 above.

14

98.

Plaintiff Otey and numerous other Oregon Workers are no longer employed by

15 CrowdFlower.
16

99.

CrowdFlower has willfully failed to pay Plaintiff Otey and the other Oregon Workers

17 minimum wages due at the time their employment with CrowdFlower ceased or since that time.
18

100.

More than 48 hours, excluding Saturdays, Sundays and holidays, have elapsed since

19 the wages became due and payable to Plaintiff Otey and the other Oregon Workers.
101.
71

notice of nonpayment pursuant to ORS §§ 652.150(2) and 652.200(2). Ex. 1.
102.

23
24

Prior to tiling suit, Plaintiff Otey's counsel provided CrowdFlower a pre-suit written

Defendants failed to pay all wages due within 12 days of receipt of Plaintiff Otey's

written notice.
103. As a result, Plaintiff Otey and other former Oregon Workers are entitled to penalty

25 wages pursuant to ORS § 652.150 equating to Oregon's minimum wage for eiaht hours per day until
26 Defendants pay all such wages, up to a maximum 30 days' worth of penalty wages. Id
104.

Pursuant to ORS § 652.200(2), Plaintiff Otey is further entitled to recover his costs,

disbursemen s, and attorney's fees incurred in bringing this claim. Id.
SECOND AMENDED COMPLAINT

17

PRAYER
WHEREFORE PLAINTIFFS PRAY JUDGMENT for themselves and all collective action
members and class members, against all defendants jointly and severally as follows:
A. On the First Claim for Relief, Plaintiffs and all similarly situated workers in the U.S. and
its territories demand judgment and request (1) compensatory damages; (2) liquidated
damages; (3) attorneys fees and costs as allowed by 29 U.S.C. § 216(b); (4) prejudgment and post-judgment interest as provided by law; and (5) such other relief as the
Court deems fair and equitable.
B. On the Second Claim for Relief, Plaintiff Otey and all similar situated Oregon Workers
demand judgment against Defendants and request: (1) compensatory damages; (2)
attorneys' fees as allowed by ORS § 653.055 (3) costs of litigation; (4) pre-judgment and
post-judgment interest as provided by law; and (5) such other relief as the Court deems
fair and equitable.
C. On the Third Claim for relief, Plaintiff Otey and all similarly situated Oregon Workers
demand judgment against Defendants and request: (1) penalty wages as allowed under
ORS § 652.150; (2) attorneys' fees as allowed by ORS § 652.200(2); (3) costs of
litigation; (4) disbursements; (5) pre-judgment and post-judgment interest as provided by
law; and (6) such other relief as the Court deems fair and equitable.

DEMAND FOR JURY TRIAL
Plaintiff hereby demands a trial by jury on all claims, causes of action and issues so triable.
Dated: June 17. 2013

By: s/Jennifer L. Connor
Jennifer L. Connor (SBN 241480)
Ira Spiro (SBN 67641)
Justin F. Marquez (SBN 262417)
Spiro Moore LLP
11377 W. Olympic Blvd, 5th Floor
Los Angeles, CA 90064
310-235-2468 (T), 310-235-2456 (F)
ATTORNEYS FOR PLAINTIFFS

SECOND A, ENDED COMPLAINT

18

EXHIBIT 1

WEINHAUS & POTASHNICK
11500 Olive Blvd., Suite H.,, St. Louis, Missouri 63141-7126
Phone [phone] • Fax [phone]
www, Iiiir‘VILW la ‘N .1 ers.com

ATTORNEYS AT LAW
Sheldon Weinhaus
Licensed In MO & AZ
weidobOigc org

Mark Potashnick
Llcensed in MO & IL
,rlinkprilAvp.anorneys Cr111

October 23, 2012

VIA CERTIFIED MAIL /
RETURN RECEIPT REQUESTED
Mr. 1,ukas Biewald
Mr. Chris Van Pelt
CrowdFlower, Inc.
2111 Mission Street. Su le 302
San I . Ruicisco. Caiirornia 94110

RE:

Chris Otey

Dear Mssrs. Hicwald and Van Pelt,
This Firm and its co-counsel represent Chris Otey in his claims lOr unpaid minimum wages.
Pursuant to ORS § 652.150 and 652.200. please pay Mr. they and all other persons who have
perrormed crowdsourced work in Oregon their minimum wages earned during the past 6 years.
Mr. OtevIs minimum wages due are estimated at S280.00. .1 he minimum wages or other persons
in Oregon who have perrormed crowdsoureed work arc est mated at S7.00 per hour worked.

Mark Potastiluck

cc:

Chi is they