San Francisco Unicorn 'Scale AI' Accused of Wage Theft

They provide training data to top AI companies including OpenAI and Meta, according to its web site. Founded in 2016, San Francisco-based Scale AI now has over 900 employees, eventually growing beyond "unicorn" status with over $1.35 billion in ivnestments. In May the company's valuation was over $14 billion, with investors including Amazon, Meta, Nvidia, Cisco, Intel, and AMD (as well as earlier investments from Y Combinator and $100 million from Peter Thiel's Founders Fund). SFGate calls them "a buzzy San Francisco startup with high-dollar ties across the tech industry".

But SFGate also report Scale AI "was sued Tuesday by a former worker with allegations that the company is committing wage theft and misclassifying workers."

Steve McKinney filed the suit against Scale and several top executives, including 27-year-old billionaire CEO Alexandr Wang, in San Francisco Superior Court. With the filing, the former contractor aims to be a lead plaintiff for a class-action lawsuit against Scale; a judge will need to certify his proposed class of current and former contractors within California...

McKinney, whose complaint says he was paid on an hourly basis and worked on a project eventually sold to Meta, is accusing Scale of amassing its clout and cash by exploiting workers. "Scale AI is the sordid underbelly propping up the generative AI industry," the complaint says, before rattling off a list of allegations about its treatment of contractors. The document accuses Scale of bait-and-switch hiring promises; demanding off-the-clock, unpaid work; denying overtime pay; and unfairly booting contractors from projects...


The Tuesday complaint calls Scale's control over its contractors "Orwellian." The company makes contractors download a tool to track much of their computer use, including by taking periodic screenshots, the suit alleges. The lawsuit also alleges that Scale reassigns the workers to varyingly paid projects and docks pay if a task takes more than it was supposed to, plus posits that Scale is in violation of California's "ABC" test, which monitors use of the designation "independent contractor." It argues that contracted "Taskers" like McKinney should be classified as employees instead...

The complaint, along with arguing for class-action certification, seeks restitution, punitive damages and changes to Scale's worker classification model.

The article adds that "Per Fortune, Scale's armies of contractors marked up images for Cruise and Waymo to help autonomous cars understand their surroundings..."

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