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Playing without paying

by Richard Morgan  |  Published June 21, 2011 at 8:43 AM

AriannaHuffington125.pngThe most intriguing line about the class-action suit against TheHuffingtonPost.com Inc. appeared in last week's release announcing that four more contributors had joined it. "Arianna Huffington is a little like Tom Sawyer," observed writer Billy Altman, who before becoming one of the four, contributed 22 pieces to the blog-aggregating news site, "except at least Sawyer didn't sell the fence after his friends finished painting it for him."

The simile, unfortunately, doesn't withstand scrutiny. The fence was never Sawyer's to sell; it was always Aunt Polly's.

Similarly, HuffPost has what the complaint estimates to be "9,000 unpaid content providers," who without doubt helped make the communal-like enterprise worth $315 million to AOL Inc. (NYSE:AOL). The site, however, also had a distinct set of owners, and those Aunt Pollys, if you will, never saw fit to share sale proceeds.

Hence the class action, which seeks to claw back $105 million of the $315 million that AOL paid in March to acquire HuffPost. The reason, according to the complaint, is that the acquisition target would have been worth "at least $105 million less" without contributions from the unpaid 9,000.

In a HuffPost post before the complaint was amended this month, under the headline of "About That Lawsuit ...," Huffington herself addressed the merits of the original filing: "There are none."

Yet legal reasoning isn't the point here. This becomes apparent when the amended complaint, citing recent Huffington book "Third World America," laments that CEOs now make 300 times what their workers make, compared with 30 times 40 years ago.

"She believes the nation needs to make certain it is 'a place where economic opportunity is once again real for everyone, not just the economic elite,' " the complaint continues, using quotes from Huffington's book, "and 'a place where greed and selfishness are no longer rewarded and the "least among us" are given a helping hand, rather than the back of it.' "

A nice set-up, to be sure, for what the plaintiffs really want to say and what their suit goes on to say: "Huffington is exacerbating the very inequalities she seeks to redress."

Exposing Huffington as a hypocrite, however, may be letting HuffPost's founder and her fellow former owners off easy. As Lauren Kirchner reports in the Columbia Journalism Review, a precedent actually worth pursuing is Tony and Susan Alamo Foundation v. Secretary of Labor.

This case features church volunteers who did not want to be paid for the hours they charitably donated to the side businesses of their nonprofit religious organization. In fact, as noted at trial, they "vigorously protested the payment of wages."

But then the Supremes came along and, affirming an earlier judgment, determined in 1985 that the use of so many unpaid workers gave the Alamo Foundation an unfair advantage over its wage-paying, for-profit competitors. And so paid, it was decreed, Alamo volunteers shall be.

The precedent's implications for HuffPost's disaffected seem perfectly clear. Rather than suing their platform's current and former owners over unjust enrichment, those wanting to get paid should simply agitate HuffPost competitors to sue the AOL unit over the unfair advantage permitted by that very lack of compensation.

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Meet the journalists

Richard Morgan

Editor at large, media, entertainment & telecommunications

Richard Morgan, editor at large, focuses on media and entertainment and also pens the Backstory column in The Deal magazine. Contact



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