The Scale AI lawsuits fall into two groups: workers suing the company, and the company suing a rival. Since October 2024, at least four separate worker actions have been filed against Scale AI and its Outlier and Remotasks platforms, alleging psychological harm from reviewing violent and sexual content, misclassification as independent contractors, unpaid wages, and unlawful mass layoffs. In September 2025, Scale AI turned plaintiff and sued a former executive and competing startup Mercor for trade-secret misappropriation.
The Psychological Harm Class Action
The highest-profile case is Schuster v. Scale AI, Inc., Case No. 3:25-cv-00620, filed January 17, 2025 in the U.S. District Court for the Northern District of California. Six former contractors — Angela Schuster, Steve McKinney, Howard Quattlebaum, Anna Pendleton, Xavier Retana, and Latoya Howard — sued Scale AI, Outlier AI, and Smart Ecosystem, Inc.
The plaintiffs worked as “taskers,” the independent contractors who train AI models by reviewing content and responding to prompts. The complaint alleges they were exposed, without adequate safeguards, to material depicting suicide, child sexual abuse, sexual predation, hate crimes, bestiality, and murder. According to the filing, that exposure caused PTSD, depression, anxiety, nightmares, insomnia, and panic attacks.
The complaint also alleges “moral injury” from being required to adopt the perspective of perpetrators or engage with depraved scenarios in hours-long conversations with the AI, and “institutional betrayal” from what the plaintiffs describe as Scale AI ignoring or retaliating against workers who raised mental-health concerns.
Legally, the case turns on retained control. Although Scale AI classified taskers as independent contractors, the plaintiffs argue the company functioned as a joint employer by assigning specific tasks with rigid timeframes, setting performance classifications like “Reviewers” and “Super Attempters,” mandating particular platforms, and requiring compliance with task demands regardless of psychological toll or face termination. That retained control, the complaint contends, created a duty to provide warnings, technological protections, instructional materials, and confidential mental-health services, and Scale AI breached it by providing none.
The suit brings three claims: negligent exercise of retained control, negligent provision of unsafe equipment, and violation of California’s Unfair Competition Law. The proposed nationwide class covers anyone who worked as a tasker for the defendants, was classified as an independent contractor, and reviewed traumatic content or responded to sensitive prompts within the limitations period, with state subclasses for Texas, Virginia, and Illinois. The plaintiffs want injunctive relief to force Scale AI to install safety protocols and mental-health support, plus a medical-monitoring fund for affected workers.
The case is before District Judge Jacqueline Scott Corley, who took over from Magistrate Judge Kandis Westmore in late January 2025. Scale AI and its co-defendants moved to compel arbitration and stay the case in April 2025. The plaintiffs opposed in May, defendants replied in June, and as of October 2025 the motion remained pending after multiple continuances.
Wage Theft and Misclassification Suits
Before the psychological-harm case, two California wage suits were already underway.
On December 10, 2024, former worker Steve McKinney filed a class action in San Francisco Superior Court, Case No. CGC-24-620481, alleging Scale AI violated California labor law by treating taskers as contractors rather than employees. The complaint describes algorithmic pay reductions, unpaid mandatory training and project preparation, constant surveillance, and strict productivity demands, and argues those conditions describe an employment relationship. The suit, brought by the Clarkson Law Firm, seeks unpaid wages, overtime, statutory penalties, and injunctive relief under the California Labor Code, with potential damages estimated in the hundreds of millions on behalf of 10,000 to 20,000 workers. The court has designated it complex.
On January 3, 2025, former Outlier contractor Amber Rogowicz filed a separate action in San Francisco Superior Court, Case No. CGC-25-621144, under California’s Private Attorneys General Act. Rogowicz, who worked on the platform from March to June 2024, alleges she regularly worked 10-hour days but was paid for only five because time spent on training and reviewing instructions went uncompensated. Her effective pay, the complaint says, dropped to roughly $15 per hour, below California’s then-$16 minimum wage. The suit also alleges violations tied to overtime, business expenses, meal breaks, and sick days.
According to Business Insider reporting from October 2025, four lawsuits filed against Scale AI between December 2024 and May 2025 had reached a settlement agreement, with an approval hearing scheduled for December 2025. Settlement terms were not publicly available in that reporting.
The WARN Act Layoff Suit
The earliest of the cases came in October 2024. In Ramey v. Scale AI, Case No. 3:24-cv-0699 in the Northern District of California, plaintiff Tyler Ramey alleged that Scale AI, Outlier AI, and staffing firm HireArt laid off more than 500 contractors in August 2024 without the 60-day advance notice required under the federal Worker Adjustment and Retraining Notification (WARN) Act and its California equivalent. The suit seeks severance and other damages.
Scale AI’s Suit Against Mercor
Scale AI is also on the offensive. On September 3, 2025, the company sued its former head of engagement management, Eugene Ling, and rival AI startup Mercor in San Francisco federal court. Scale AI alleges that Ling downloaded more than 100 confidential documents containing customer strategies and proprietary information to a personal Google Drive while communicating with Mercor, and that he attempted to pitch Mercor’s services to one of Scale AI’s largest clients before leaving. The complaint asserts breach of contract against Ling and misappropriation of trade secrets against Mercor.
Mercor co-founder Surya Midha denied that the company used any of Scale AI’s data, saying Ling had disclosed possessing “old documents in a personal Google Drive” that Mercor never accessed. Midha said Mercor offered to have the files destroyed six days before the lawsuit was reported. Ling said on social media that there was “no nefarious intent” and that he had asked to delete the files but was told by Scale AI to hold off while awaiting further guidance.
What Scale AI Says
Scale AI has said it warns workers in advance about sensitive topics, allows them to stop tasks at any time, offers mental-health resources and an anonymous support hotline, and pays hourly rates at or above local minimum wages. The company declined to comment on the pending litigation.
Pay across Scale AI’s platforms varies widely. The Outlier platform lists rates of $30 to $50 per hour for specialized work in areas such as biology, coding, and languages, according to Canadian Affairs reporting. Remotasks, which operates primarily in lower-income countries, pays as little as one U.S. cent for tasks that can take multiple hours.
Where the Cases Stand
As of mid-2026, the psychological-harm class action is stalled at the threshold, with Scale AI’s motion to compel arbitration unresolved. The misclassification and wage cases appear headed for settlement, with a December 2025 approval hearing on the calendar and terms not yet public. The WARN Act suit and the Mercor trade-secrets case were both active as reported. If you worked as a Scale AI, Outlier, or Remotasks tasker during the periods covered by these complaints, the class definitions and settlement notices filed in the California cases are the documents to watch.