Scale AI, the San Francisco-based AI training company most recently valued at $14 billion, was hit with a lawsuit alleging wage theft and violating labor laws on Friday — the same day that a Biden-era investigation by the federal Department of Labor into the company was dropped.
The complaint was filed in San Francisco Superior Court on May 9 by Chloe Agape, a former employee for the firm based in New York City. Scale AI and its contracting firm HireArt are the named defendants. Agape is seeking class-action status for the complaint.
Agape was hired in November 2023, first as a contractor. By March 2024, she was hired full-time in an hourly role, and was promoted to a salaried role in June. She did similar work in all three positions, according to the lawsuit.
Scale AI relies on a coterie of “taskers” like Agape to train generative AI by performing “tasks” to produce high-quality content to train generative AI. In doing so, it’s become one of the major beneficiaries in the generative AI boom. Among its partners include Meta, Microsoft, and the Department of Defense.
The suit alleges that Agape was systematically underpaid. According to the suit, Scale AI uses software on employee laptops to track working hours, but doesn’t account for the time spent in meetings, phone calls, or other tasks that do not require being on the computer. (How the company’s software works is unclear, but each “task” is given a time allotment for pay; the lawsuit alleges that employees do not get paid for working on a task after that time allotment passes.)
Additionally, during her time at the company, she did not receive meal or rest breaks — even as a full-time employee, she alleged —and was “discouraged” from tabulating overtime or certain kinds of meetings as hours worked.
These complaints mirror two similar lawsuits filed in December and January against Scale AI, which allege similar wage discrepancies. Both cases are still in the pre-trial stage. A third lawsuit filed by Scale AI contractors in January alleged that they were forced to “immerse themselves in deeply unsettling, often traumatic scenarios” to train AI models without any mental health support. (There is also a history of contractors working for Scale AI in the Global South, including in the Philippines and Kenya, being paid low wages.)
This latest suit, coincidentally, was filed the same day that a federal investigation into Scale AI, HireArt, and the contracting firm Upwork for possible violations to the Fair Labor Standards Act was dropped as the Trump administration loosens its enforcement on contract work. The investigation has been ongoing since at least August 2024, according to TechCrunch.
“Scale is proud to bring flexible work opportunities to communities across the country, and the feedback we receive from contributors is overwhelmingly positive,” Scale AI spokesperson Natalia Montalvo told Gazetteer SF in a statement late Monday. “Our dedicated teams work hard to ensure contributors are paid fairly, feel supported, and can access the flexible earning opportunities they value. We will continue to vigorously defend ourselves against inaccurate claims related to the contributor experience on our platforms.”
Dardarian Ho Kan & Lee, the firm representing Agape, did not immediately respond to a request for comment from Gazetteer SF.
