People who are such obsessive, prodigious users of Yelp that they gain Elite status and claim firsties on reviewing every food truck and Muni stop, are taking part in a class action lawsuit the second in the last year claiming that they should be paid just like real writers for the site. The suit, labeled Lily Jeung et al v. Yelp Inc. and filed August 7 in a federal court in Los Angeles, claims that under the Fair Labor Standards Act, Yelp Elite members ought to be paid in line with the rarer Yelp Scouts and Ambassadors are paid to write reviews for the site. An earlier suit — filed by the same lead plaintiff (Ms. Jeung) but with different attorneys last October — was dismissed in February.
The argument goes like this: Yelp hires Marketing Assistants, referred to as Scouts, to fill out the site in newly launched cities, update business information, and write initial business reviews. Yelp Elite members, in a program established nine years ago, are unpaid, volunteer contributors to the site, the same way all user-generated product and business reviews are written across the web, but with the added onus of quotas for their review-writing, and bonus perks for those who do extra work. Also, Yelp Elites can be "fired," or have their Elite status revoked, if they fail to meet certain criteria. Ms. Jeung appears to be a disgruntled former Elite member who account was actually totally shut down, and who has escalated her anger at the site by getting very litigious.
Whether or not Ms. Jeung has valid motives for bringing the case may not be relevant, because this isn't the first time that someone has brought up the fact that the Yelp Elite program is fraught with legal and ethical weirdness. The San Francisco Chronicle just did a piece about how Yelp's content base is highly dependent on these Elites, and suggests that the criteria for becoming an Elite member is still shrouded in a bit of corporate mystery. Consumerist responded, pointing out that there have been many reported cases of Elite members leveraging their status to get special treatment at restaurants, writing biased reviews of places that throw parties for them (that one's a given), and noting that with the whole program of perks, "Yelp is effectively using these reviewers as low-paid employees."
The current class action lawsuit argues:
Not only must the wage-paid and non-wage-paid writers follow the exact same rules dictated by Defendant, but when looking at the profiles of the writers on Yelp’s website, there is no distinction made between them, other than a rare “Scout” or “Ambassador” badge for a wage-paid writer. This discretionary method of paying some employees wages, but not others, is in violation of the FLSA.
Anyway, will Yelp's legal woes never end? Perhaps it's just typical for a growing company, now ten years in, but just last week we learned of yet another lawsuit relating to Yelp's tactics surrounding paid advertising sales to small businesses. It turns out the Federal Trade Commission has received more than 2,000 complaints about the company, many related to the extortion claims they've been fending off for several years. So, it may turn out in the end that a court will find that Yelp is as shady as some business owners have said, and that they did manipulate their "algorithm" with the ordering or removing of reviews to encourage businesses to buy ads.
We've reached out to Yelp for comment on the latest class action, and clarification about why Ms. Jeung's account was originally terminated, and will update this post as necessary.
Update: Here's the official statement from Yelp:
We have not seen the complaint, but based on the reports we have seen this appears to be the same case that the same plaintiffs previously brought, and which the court previously dismissed. This case is a textbook example of a frivolous lawsuit; it is unfortunate the court may have to waste its time adjudicating it and we will seek to have it dismissed if we are served. The argument that voluntarily using a free service equates to an employment relationship is completely without merit, unsupported by law and contradicted by existence of dozens of websites like Yelp that consumers use to help one another. We believe this suit is probably a result of the enforcement action we were required to take against some of the plaintiffs for improper conduct rather than based on any real merit.