Judge Reviews “Yelpers” and Finds They Are Not Employees Entitled To Minimum Wage

Blog-Reviews

Even the never ending onslaught of wage & hour cases for employers may have started to reach their limits. First the Court of Appeals for the Second Circuit, and now Judge Richard Seeborg of the Northern District of California has found providers of content to online portals are not employees within the meaning of wage-and-hour laws. The earlier Second Circuit rejected a claim by Huffington Post bloggers several years ago. Now the Northern District of California has weighted in and rejected the Fair Labor Standards Act (“FLSA”) complaint of individuals who claimed they were employees because they wrote reviews of restaurants on Yelp. (Jeung v. Yelp, Inc., 2015 U.S. Dist. LEXIS 107427 (N.D. Cal. Aug. 13, 2015).)

Employers will love the central quote from the decision. There the Court stated that “[w]hile the statutory definition of employee is exceedingly broad … it does have its limits. An individual who without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit, is outside the sweep of the Act.” Judge Seeborg went on to rule that the Plaintiffs’ “conclusory allegations that they were ‘hired’ and ‘fired’ by Yelp, and given ‘employee type direction,’” were insufficient to state a cause of action.

The confusion may have come from Yelp’s user sign up process. Yelp uses “hired” for any member of the public that wishes to write a review. They then use “fired” when a member breaches its terms of service agreement for misconduct. The rhetoric for the case is high, with Plaintiffs’ counsel comparing Yelp to a “21st century galley slave ship” that profits off the work of unpaid writers. Yelp maintains that the users post “because they want to spread the word about great local businesses in their neighborhood and not because they expect payment.”

Employers will celebrate that some Courts are finding some obvious limits to the definition of employee, even in the emerging arena of internet commerce. However, with headline grabbing disputes over celebrity interns in the entertainment industry and the employment status of Uber drivers, this will likely not be the last work regarding the question of employment status. Employers who use volunteers or contributors for online content (like Yelp) should make sure to avoid language for policies or systems sign ups that make the relationship sound like an employment relationship. The terms of use should clearly specify that contributors are not employees, and that any contribution to the volunteer activity or website are voluntary and solely for the contributor’s own purposes.

Contributor:  Alden J. Parker, Attorney at Law | Weintraub Tobin