Volunteer rebels rock Web community

But the explosive growth of the Internet into a multibillion-dollar industry has caused many to question the relationship between online communities and the companies profiting from them. Now, the government may step in.

The U.S. Department of Labor has recently opened an investigation into complaints by several former America Online Inc. (NYSE:AOL) volunteers who claim the nation's biggest online service company violated 60-year-old labor laws by forcing them to work specific shifts, file time cards, and abide by different rules than other members. In short, they say AOL treated them like employees, but didn't pay them or give them benefits.

The outcome of the case could have sweeping implications. AOL has 10,000 volunteers, called "Community Leaders," compared with 12,000 paid employees. But the investigation could affect far more than AOL's bottom line.

"If the Department of Labor pulls the plug on this you're definitely going to see some domino effect with online companies [using] volunteers," said Michael Karpeles, a partner with Chicago's Goldberg, Kohn, Bell, Black, Rosenbloom and Moritz who specializes in employment law.

Great expectations
The case, which was reported Wednesday by The New York Times, began last summer through discussions on Observers.net - a Web site started by former AOL Community Leaders. Many of the ex-volunteers share the same complaints: that AOL changed the terms of their deal by reducing their privileges and taking away an 800 number that gave them free dial-in access. And when they spoke up about those or other problems, several ex-volunteers say, AOL would terminate their position and sometimes even ban them entirely from the online service, calling them "security risks."

An AOL spokesperson did not return repeated calls for comment.

"AOL treats their volunteers like crap," said Kelly Hallissey, a former volunteer and Observer.net staff member from Greensboro, N.C. "They treat them like employees without any of the benefits or respect they should get... This is not one person. This is not five people. This is innumerable people."

Hallissey said that AOL fired her and banned her from its services when she publicized AOL's decision to take away an 800 number given to the volunteers.

In her letter to the Department of Labor, Hallissey said she worked 40 hours a week policing AOL's chat rooms, training other hosts and logging all on-screen warnings.

"We were required to submit Time Cards both at the beginning and end of each shift," Hallissey wrote in her complaint. "Any non-compliance, or inability to comply with the Minimum Time Requirement standards for the area, either necessitated a Leave of Absence which had to be approved or you were fired and possibly terminated [from using the service]."

Marilyn Perkins, who works in human resources in Chicago, volunteered with AOL for five years.

When she started, she agreed to work nine hours a week in exchange for free service. AOL now charges $21.95 a month for unlimited service, but at the time charged on an hourly basis, and many members paid much more than $22 a month. But Perkins said that even when she worked the minimum nine hours, additional responsibilities - such as filling out shift reports, participating in training and answering as many as 300 e-mails a day - took many more hours a week. Soon, she found herself working more than 40 hours a week.

"I'm a cheerful insomniac, so I would stay up all night," said Perkins.

Perkins said she lost her Community Leader position after complaining about AOL employees misusing subscribers' personal information.

Volunteers 'running the service'
While the Labor Department has not publicly acknowledged its investigation, Perkins said she spoke with the director of the Employment Standards Division recently, who assured her that an investigator is being assigned to the case. And a letter sent to Hallissey indicates that the claims will be "looked into as soon as possible."

At least one former AOL employee has already been questioned by the Department of Labor. The employee, who spoke on the condition of anonymity, confirmed many of the complaints by the volunteers.

The ex-employee said that the practice of using volunteers began in the early days of the chat rooms. "AOL kind of recruited people who were online all the time to keep an eye on things," said the ex-employee. But as AOL grew - it announced Wednesday that it now has 17 million members - "AOL suddenly realized they had thousands of people doing this. They had no idea who they were, what they were doing, and how much it was costing them. They had no clue... The volunteers were basically running the service"

In 1995, AOL began to monitor the volunteers and enlisted them in a more formal relationship, said the ex-employee.

"When it gets to 'We want to keep this fresh so people buy things,' you're not doing this for fun anymore - you're doing this for the company. And when you're doing it for the company you're not a volunteer anymore," argues the ex-employee. "There is a place for volunteers online, but not in a for-profit company. That's getting real close to exploitation."

Making a case
Joseph Fleming, a partner at the Miami office of law firm Ford and Harrison, said that the Labor Department is likely to side with the volunteers.

"The Department of Labor has always come down very very strongly and said hey, if you're working, you get paid," said Fleming, who serves on the Advisory Group on Labor Law for the American Bar Association. "I've seen this with volunteer groups over and over again."

Fleming said much of the case will depend on what category of workers the Labor Department decides the volunteers best fit into. "There's a question of what they did and how they did it," said Fleming.

Both Fleming and Karpeles said the case will hinge on the specific facts that are uncovered in the investigation.

"The courts and Department of Labor will look at whether any benefit... was received by these people," said Karpeles. "That tends to argue more in favor of employment status. But AOL has a point when they say they have to manage their volunteers."

But Ron Rappaport, an analyst with Zona Research, was skeptical about the merits of the claims.

"It would seem to me that volunteers offers services voluntarily," said Rappaport. "Under the assumption that services were offered voluntarily without compensation, there seems to be little room for negotiation after the fact."

Rappaport said that a ruling in favor of the volunteers could have a chilling effect on the industry.

"The potential impact upon Web communities could be significant, if the DOL acts," said Rappaport. "Communities that depend on volunteers to evolve their content could discover a barrier to entry that past communities did not have to reckon with."

Possible effects
Other online communities are also watching the case closely.

"Volunteerism is one of the central attributes of the Internet," said Jason Stell, spokesman for iVillage, an online community for women that has more than 1,000 volunteer monitors on the site - in addition to its 260 employees. "Our hope is that the Internet's participatory nature is not what's at issue here."

Gail Williams, Executive Director of The WELL, said the case will have the biggest impact on "people doing business plans for new sites."

The WELL, one of the pioneers in online community, relies on volunteer "Conference Hosts" to run its conferences. Williams said that The WELL's agreements with its volunteers are different enough from AOL's deal that she doesn't think it will affect her company. However, she said it would help if companies had some guidelines - something this case may provide.

"It's an interesting puzzle," said Williams. "Things are changing all around us. Defining the terms of the relationship is going to get more and more important."