Inside AOL's "Cyber-Sweatshop"

How a fortune was built, and class-action lawsuit was born, on the fingers of tens of thousands of unpaid volunteers. Call them volunteers, remote staff, or community leaders – they are the human face of AOL. They host chats, clean scatological posts off the message boards, and bust jerks for terms-of-service violations. Fourteen thousand volunteer […]

__ How a fortune was built, and class-action lawsuit was born, on the fingers of tens of thousands of unpaid volunteers. __

Call them volunteers, remote staff, or community leaders - they are the human face of AOL. They host chats, clean scatological posts off the message boards, and bust jerks for terms-of-service violations. Fourteen thousand volunteer CLs not only play hall monitor to AOL's vaunted "community," they are that community. Their hours? Flexible: Some work as few as four per week, others put in as many as 60. Their pay? A $21.95-per-month AOL account "empowered" with some special CL-only enhancements. Their job satisfaction? High. Until now.

Six months ago seven former AOL community leaders asked the Department of Labor to investigate whether AOL owes them back wages. On May 25, two of the seven filed a complaint against AOL in federal court in New York, the first volley in a class-action lawsuit that is expected to drag on for over a year. Their attorney Leon Greenberg contends that the arrangement amounts to an illegal "cyber-sweatshop." On July 22, AOL announced the elimination of its youth corps, 350 teenaged CLs. Scores of people have asked to join the lawsuit, say its filers. Meanwhile, the other 13,643-odd volunteers continue to report to "work" on AOL.

Who are these people who choose to personify the 800-pound gorilla of the online world, night after night, virtually for free? And what in the world did AOL do to anger this posse? As much as the lawsuit's outcome will set a precedent for compensating online labor in the future, it offers a window into the weird and wacky world of cyber-codependence - right at the intersection between corporate and personal identity.

"I'm torn by the lawsuit," says Nancy, who is typical of the dozen CLs interviewed for this story. On the one hand, she'd like to get paid for her work; on the other, she doesn't want to lose her volunteer position. Keep her talking, though, and Nancy starts to sound less like a disgruntled employee and more like a battered wife. "I love AOL even though they're really shitty to me," she laughs. "It's like a bad relationship I can't get out of."

Nancy, like the other CLs, doesn't want her real name used because she fears that AOL will kick her off the system and she'll lose her online identity. "In reality I'm a disabled fat woman," she says. "But online I'm really well respected." After six years of helping build AOL's corporate identity, Nancy finds that she doesn't even own her screen name.

Until 1993 the relationship between AOL and its volunteers was symbiotic. AOL ran on an hourly rate system: For every hour spent online a user shelled out $3.50. Frequent users and role players like Nancy spent as much as $800 per month online. AOL routinely offered people like her the chance to become remote staffers in exchange for free hours. The very best received unlimited hours.

If the system worked well for frequent users, it worked even better for AOL. At its peak, one-fourth of all user hours were spent in chat - and those hours generated tons of money. Put a popular remote staffer in a chat room with 22 other people for an hour and - boom! - that was nearly 70 bucks in AOL's pocket. All that chat added up: According to some estimates, by 1996 the service's non-sex chat was pulling in at least $7 million a month with the help of 33,000 volunteers. Chat was far cheaper to produce than content - and far more lucrative.

Everything changed in December of 1996, when AOL moved to a flat-rate pricing system: unlimited access for $19.95 a month. Gone were the profits from hours spent in chat. Worse, chatty members clogged AOL's servers and threatened to crash the system. Gone too were many of the volunteers. Without the hundreds of dollars worth of free hours, more than half left.

At first, AOL didn't seem to know what to do with the remaining volunteers - whether to keep them or let them go. It briefly considered charging them $3.95 a month for their accounts. For some sites, the hassle of managing volunteers became too much altogether: Motley Fool, one of AOL's premier destinations at the time, opted to replace 150 volunteers with 20 or 30 people who were paid to be full-time chat hosts.

AOL volunteers are now rewarded with a variety of perks: free accounts, AOL trinkets, and the occasional online session with Steve Case, whose chat is regarded as lackluster. ("Get him a ghost typist!" shrieks Nancy. "He makes millions and he can't even use the Shift key.")

The volunteers who remained and who were recruited after the rate change were not after money. For them, community is more than a "sticky app." They want things online they can't get in real life: respect, power, a place where they belong, friends, you name it. They receive tools and access that regular members don't have - they can creep around in hidden areas, hang out in special lounges, and script content in RAINMAN, AOL's proprietary language.

"It was a power trip. I admit it," says Brian Williams, a plaintiff in Greenberg's suit. "We were empowered. You could Gag people and give the Boot command."

Some were into the "uniforms." CLs who took online classes received screen names that reflected their positions: GUIDELuLu, HOSTFred, RNGRBob. "I was democratically elected the admiral of a role-playing group," says Ellen, a former volunteer manager and current CL. "I got my virtual epaulets. Then I joined the guides. It's a prestigious program."

Others found the work to be its own reward. Kit, a CL who still gives AOL 60-hour weeks, turned a tiny forum of merely 50 folders into a bustling metropolis with 1,000 folders and 50 volunteers reporting to him. Asked about his motivation, the CL replies, "It's vanity. I've invested three years of my life here, and I don't want someone else to take it over."

One might expect that the people suing AOL would be those who saw their areas fatten into cash cows - folks with a clear beef. But that's not how it happened: The lawsuit and the federal complaints were filed by a community of ex-CLs that started its own Web site, www.observers.net, in 1998. Some grew weary of working for free; others spoke out and had their CL status revoked. "The people who run AOL never really understood the volunteers," says Ellen. "When they didn't ignore them they patronized them."

The 600 disillusioned and disenfranchised who populate Observers.net were once AOL's biggest cheerleaders. Observers.net, however, is dedicated to "opening a few eyes about the AOL that exists behind the public-relations lies." It's a bitter place, the "observers" at Observers.net feel personally betrayed, and the time and energy that once went gratis to AOL now goes into a well-organized online bashing. Ironically, Observers.net has replicated the very same AOL system that its members charge once exploited them. The site was built and is maintained by an all-volunteer labor force. Former CLs even have the old uniforms back: Observers.net graybeards are known as Enlightened Ones, while newbies get to be Lil' Mushrooms.

CL reaction to the crusaders on Observers.net suing on their behalf has been decidedly mixed. Former CLMary Gay finds the Observers.net style whiney and overblown. "Why be this upset?" asks Gay, who's now a paid community developer for BlackFamilies.com. "I'd say 'I need money. Set me up on payroll.' No discussion. "When Kit heard about the lawsuit he instantly calculated how much he would be owed in back wages: about $50,000, at $9 per hour. Still, he's not interested in joining the suit. "I continue on doing my little thing," he says, "and everyone's happy."

Alan Hyde, a law professor at Rutgers and an expert on legal issues in high tech employment, rates the lawsuit's chances as slim. Hyde says the plaintiffs don't claim that the volunteers were economically dependent on AOL - a condition of legal employment. "The Fair Labor Standards Act was passed to protect people who were economically dependent upon their employers," he says, "not emotionally dependent."

AOL takes the position that it's the Jed Clampett of the Internet: It was quietly building an online community and then hit a gushing well of community volunteerism. Spokesperson Ann Brackbill says AOL was "surprised" by the lawsuit because the program seems to be popular with the volunteers, who are, after all, volunteering. By her reckoning, if AOL banned CLs tomorrow, they'd still show up, out of uniform, to run AOL's chat rooms. "People who want to be leaders in an online community," she says, "are hard to suppress."