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- Four lawsuits accused Scale AI of misclassifying and underpaying contract workers.Plaintiffs alleged they worked long hours below minimum wage and were denied benefits like overtime.Scale AI agreed to settle and has since stopped hiring California gig workers.
Scale AI has agreed to settle four lawsuits filed by its former workers in California alleging they were illegally underpaid and misclassified as contractors, according to court documents filed this week.
The San Francisco-based company relies on a vast army of workers it considers contractors to help train AI models. Meta bought almost half of the startup in a blockbuster $14.3 billion AI deal this summer that saw former Scale CEO Alexandr Wang leave to head the tech giant's superintelligence team.
The lawsuits against Scale AI predate the Meta deal and stem from claims by former workers in California. Potential terms weren't disclosed, and a judge has to approve the final settlement. The likely resolution of the cases still represents a step forward for Scale AI, which earlier this year appeared bogged down in litigation related to its core business model.
A Scale AI spokesperson declined to comment.
In four suits filed in San Francisco Superior Court between December 2024 and May 2025, former workers Steve McKinney, Amber Rogowicz, and Chloe Agape, among others, accused Scale AI of misclassifying them as contractors, underpaying them, and denying them benefits, like overtime and sick pay, they would have been entitled to as regular employees.
In a class action complaint, McKinney alleged that he wasn't paid for lengthy training webinars and was tracked using "Orwellian" software that monitored his mouse activity and whether he visited other webpages. His suit called Scale AI "the sordid underbelly propping up the generative AI industry."
In her lawsuit, Rogowicz claimed she earned below California's minimum wage on the company's main gig work platform, Outlier. Agape, who filed two lawsuits, alleged she was also underpaid while working for Scale AI through staffing firm HireArt.
All three groups of plaintiffs — who filed four lawsuits in total — have now agreed to settle with Scale AI. A judge will hold a hearing in December, according to court documents.
Scale AI isn't entirely out of the woods yet. It has one ongoing California worker-related lawsuit in federal district court filed by contractors who allege they experienced "severe psychological harm" from being exposed to "violent and disturbing content" in the data labeling work they did.
San Francisco labor regulators are also investigating the company over the working conditions experienced by city residents who worked for the startup. San Francisco's Office of Labor Standards Enforcement said it has not concluded this investigation.
Since the first California workers' lawsuits were filed, Scale AI has stopped accepting gig workers who are California residents, according to internal screenshots seen by Business Insider. Scale AI didn't respond to a request for comment on the change.
Scale AI cut a team of contractors in its Dallas office on Monday in a shift toward more specialized AI training.
HireArt didn't respond to a request for comment.
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