A class action has been filed against America Online, Inc. and two related companies on behalf of Californians who served as chat room volunteers and who allege that the company failed to pay them minimum wages and overtime in violation of the California Business & Professions Code. The action seeks compensatory damages, liquidated damages equal to the amount of compensatory damages, and disgorgement of ill-gotten profits from the alleged violation of California law.

Allegedly, nearly 5,000 Californians served as volunteers for chat rooms offered to subscribers by AOL over the past five years. Volunteers allegedly control chat rooms and forums, maintain and enforce the ISP's contract with subscribers, post original work used by paying customers, assist users in resolving with technical problems, and assist in the business. The action alleges that volunteers receive free or discounted service in exchange for their services.

In 1999, a similar action was filed that proposes a nationwide class of people who have acted as AOL volunteers. The California action will presumably carve out Californians from that action. These actions are bolstered by a report published in Forbes magazine, which describes a 1995 memo from an internal AOL legal task force mobilized to look at the problem of volunteers. That task force concluded that because this army of volunteers was required to fill out time cards, undergo training, and file reports, the volunteers were by all appearances AOL employees.