Class Claims Yelp Panders to Advertisers

LOS ANGELES (CN) - Yelp "controls its reviews to pander to advertisers" and violates labor laws by refusing to pay reviewers for their work, a class action claims in Federal Court.

Lead plaintiff Allen Panzer sued the search and social networking site under the Fair Labor Standards Act.

The site's 108 million monthly visitors can see tens of millions of posted reviews of restaurants, bars, vendors and other businesses and professionals, the lawsuit states.

Describing Yelp's review system as "cult-like," Panzer says the reviewers who make the site profitable are not paid a "single cent."

Panzer, of Houston, claims he has written about 70 reviews for Yelp, and that a "large and ever-growing stable of non-wage-paid writers" have made the site a success.

Claiming that the reviewers are employees under federal labor laws, Panzer says that he and tens of thousands others should be paid for their work.

The company "could not exist, nor make its enormous returns, without its domination and control over non-wage writers," the lawsuit states.

Yelp ducks the law by calling reviewers "Yelpers," independent contractors, volunteers or interns, Panzer claims.

"Business journal commentators have compared said business practices to a 21st Century galley slave ship with pirates banging the drum to keep up the fast pace and to fill the pockets of their stockholders with treasure," according to the complaint.

Rather than paying workers, Yelp bestows titles to create a hierarchy of reviewers. Writers can receive "Elite" status and are given titles such as Duke, Duchess, Baron, or Baroness, the complaint states.

"Yelp has devised a system of cult-like rewards and disciplines to motivate its non-wage paid writers to labor without wages or expense reimbursement, in violation of equitable principles and the FLSA [Fair Labor Standards Act], by offering such rewards as trinkets, badges, titles, praise, social promotion, free liquor, free food, and free promotional Yelp attire, such as red panties with 'Make Me Yelp!'" the lawsuit states.

Though its writers are unpaid, Yelp encourages them to work faster and churn out reviews, Panzer claims.

He says that reviewers may lose their Yelp accounts if they write unfavorable reviews about Yelp's advertisers.

But he and his co-plaintiffs claim that "they must write glowing reviews of the venues that sponsor company events, where they are often offered free food, liquor, and use of the premises, under threat of losing their 'elite' status."

"Defendant controls its reviews to pander to advertisers," the complaint states.

Panzer claims the writers have an incentive to write misleadingly negative reviews of businesses on Yelp because to maintain their elite status they have to reach a quota of one- and two-star reviews.

"By shirking its responsibilities to pay its workers, defendant is in essence thumbing its nose both at their workers and the taxing authorities of all states and the U.S. government," the lawsuit states.

Panzer seeks unpaid wages and liquidated and statutory damages for violations of the Fair Labor Standards Act, quantum meruit, and unjust enrichment.

Yelp spokeswoman Kristen Whisenand told Courthouse News in an email: "This suit is frivolous on its face and we're sorry the court has to waste its time adjudicating it."

Panzer is represented by Randy Rosenblatt with The Yelp-Class-Action Law Firm, of Ventura.

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