Scale AI Faces Third Lawsuit Over Alleged Worker Exploitation, Psychological Trauma

SAN FRANCISCO, Calif. — Scale AI, a $13.8 billion artificial intelligence company, is facing its third lawsuit in just over a month, with the latest complaint alleging workers suffered psychological trauma from reviewing disturbing content without adequate safeguards. The class action lawsuit, filed January 17 in the Northern District of California, accuses the company of failing to protect workers tasked with creating and reviewing graphic prompts involving violence and abuse, including child abuse.

The six plaintiffs, who worked on Scale’s Outlier platform, claim they were misled about the nature of their work during hiring and lacked proper psychological support. They allege they developed mental health issues, including PTSD, and faced retaliation when seeking help. The lawsuit seeks the creation of a medical monitoring program, new safety standards, and unspecified damages and attorney fees.

This marks the third legal challenge against Scale AI in recent weeks. In December 2024, a former worker sued the company, alleging she was misclassified as a contractor and paid below minimum wage. Another lawsuit filed earlier this month raised similar concerns about worker misclassification and unfair compensation.

Scale AI relies heavily on contractors to evaluate AI model responses, a critical component of its business model. The company has defended its practices, with spokesperson Joe Osborne stating that Scale complies with all laws and regulations. “We have numerous safeguards in place, including advanced notice of sensitive content, the ability to opt out, and access to health and wellness programs,” Osborne told TechCrunch. He also emphasized that Scale does not engage in projects involving child sexual abuse material.

The plaintiffs are represented by Clarkson Law Firm, which previously filed a class action lawsuit against OpenAI and Microsoft. That case was dismissed after a judge criticized it for being overly lengthy and containing irrelevant details. Osborne referenced the dismissal in his comments, calling Clarkson’s claims against Scale “misguided.”

Glenn Danas, a partner at Clarkson Law Firm, countered Osborne’s statements, accusing Scale of exploiting workers. “We must hold these big tech companies like Scale AI accountable, or workers will continue to be exploited to train this unregulated technology for profit,” Danas said.

As the lawsuits unfold, Scale AI faces increasing scrutiny over its labor practices and workplace safety measures. The company, valued at $13.8 billion in 2024, is under pressure to address concerns about worker treatment while continuing to play a key role in the rapidly growing AI industry.