At Observers.net, a revolution is brewing. Observers has become the online home for unhappy former America Online volunteers and employees, a place where hundreds of displaced AOL insiders both gripe and maintain longstanding friendships. The boards are an education in acronyms, as former "community leaders" -- the volunteers who spend their free time maintaining the boards, chat rooms and community areas of AOL -- compare notes and toss around arcane terms like TOS, IM, ACI, SRT and the CLO.

Observers.net's bustle is a testimony to the strength of the connections that members had made inside the AOL system. As "Moozie," one of the site's founders, explains, "An esprit de corps has arisen over the years -- there's a whole community of volunteers, a network of people who have been friends for a long time." Observers.net is also, however, leading the charge against the program that forged those friendships in the first place: A group of former community leaders and Observers.net members has asked the U.S. Department of Labor to investigate AOL's volunteer system for possible labor law violations. The question at stake: Are the volunteers, in fact, slaving away as unpaid community employees?

It's a subject that hits home for almost all online communities. Online community companies, from GeoCities to iVillage, are supported by volunteers who spend their free time maintaining the communities they love. But, paradoxically, the companies are also profiting from the work those volunteers put into the communities. Under the Fair Labor Standards Act, does that mean that the volunteers should be reimbursed for their efforts?

"Clarifying the relationship is going to be key: Is maintaining a community 'labor,' or is it, in fact, part of why people become customers and something that they enjoy?" asks Gail Williams, executive director of the online community the Well, which helped pioneer the volunteer model (and which Salon acquired last week). "It's way too early to know what will happen -- but I do know everyone will be watching and paying attention."

More than 10,000 volunteers currently serve time in the community leader program of America Online. These volunteers spend four hours a week, often far more, in a wide variety of roles: monitoring chat rooms, hosting bulletin board discussions, helping kids with homework, offering technical advice. In return, the volunteers get a free America Online account and access to special community leader forums.

Hosts have to go through an extensive training program, in which they are instructed in the ways of the ubiquitous TOS (or "Terms of Service" agreement). All volunteers are roughly grouped under the term "community leader," but they take on varied roles and titles: There are, for example, hosts, guides, rangers, librarians, forum managers and team leaders, not to mention instructors and administrative coordinators. Volunteers help run and manage the program, train new volunteers and maintain administrative paperwork. Coordinating the whole system is ACI, an AOL subsidiary whose sole function seems to be to run the community leader program. It's a confusing tangle of hierarchies and acronyms that only a dedicated AOL follower can understand.

Former volunteers have a range of complaints about the volunteer program, most of which involve the feeling that they were mistreated by AOL. Some complain about having been summarily removed from AOL when they criticized the system; others protest that they were forced to follow draconian rules and non-disclosure agreements. Explains Kelly Hallissey, a mother of four and former AOL community leader who calls herself the "ringleader" of the Observers.net community, "How AOL treats their volunteers is not how you treat volunteers: You can't shove a gazillion rules down their throat, then yell at them and fire them when they disagree."

One former AOL employee who helped coordinate community programs backs up that description. "I disagreed with the fact that [the community leaders] were unpaid volunteers, the way they were treated, the rules," she says. "For example, if you disagree, keep it to yourself, because if you disagree publicly we will fire you. If you didn't work a certain number of hours, you'd get fired. How can you fire a volunteer? Firing meant canceling their account, locking them out of the system and branding them a security risk." (Many current and former AOL employees and volunteers asked to be quoted anonymously, for fear of losing their community leader status or having their AOL accounts canceled. Many expressed fear of being banned from the system for life as a "security risk.")

These complaints, and many others, led a number of Observers.net members last September to send investigation requests to the Department of Labor last September, subsequently submitting documents supporting their complaints. The Department of Labor, however, is specifically interested in the question of whether volunteers were working as employees. The Fair Labor Standards Act requires that workers should be fairly recompensed if their work is deemed critical to the company's bottom line. According to Observers.net, the Department of Labor is now asking the former volunteers to submit evidence showing that at AOL "volunteers' work is similar to or the same as the work done by paid employees"; and that "volunteers' work is advertised as and/or otherwise considered integral to AOL's business." (A spokesman for the Department of Labor said he couldn't confirm or deny an investigation.)

In response, the volunteers insist they are doing the same work that AOL and ACI employees are doing -- that, like AOL employees, they are running communities, training new employees, doing reams of paperwork, answering AOL members' technical questions and even, in the past, creating AOL pages using the service's proprietary Rainman software, but not getting proper recognition for it from AOL. Many, in fact, feel that their work is utterly critical to the community areas on AOL, and therefore to AOL's success.

"Considering the amount of work many of us put in weekly, and seeing as how AOL would crash and burn without us, I don't think it's right that their service is mainly handled by us 'volunteers,'" complains one current volunteer, who says she would love to be paid for her work.

But while AOL agrees that many of its members find a big community "really important," the company also denies that the volunteers are that critical to developing the communities. According to AOL spokeswoman Ann Brackbill, the volunteers don't build the communities, they simply emerge out of them. "It's less about whether [volunteerism] is critical or not critical, but is it organic to the Net and will it just happen. We think natural leaders who participate arise in both the online world or the offline world."

They also deny that volunteers' duties overlap in any way with the work of paid staffers -- a critical point for any Department of Labor investigation. Says Brackbill, "We have a group of paid employees who coordinate the activities but they are not 'community leaders' -- their jobs are much larger in scope than the duties a community leader performs."

Brackbill confirms that AOL is speaking with the Department of Labor, but won't elaborate on either the claims of Observers.net volunteers or about the potential investigation except to point out that it isn't a formal investigation yet.

(America Online has been legally challenged on its use of volunteers in the past. According to an article in Legal Times from November 1995, two volunteers filed court complaints against AOL demanding back wages for the time they spent managing its games community; both also complained that they were summarily fired for disagreeing with management. Both plaintiffs were offered settlements by AOL. One plaintiff won a small claims court awards of $562 in damages for "back wages" based on his lost hours of free AOL time. According to the Legal Times articles, other volunteers also asked the Department of Labor to look into the community leader system at that time.)

Do the volunteers have a chance of winning this dispute? Answers from labor law experts are across the map, but most say that this is uncharted territory. As Alan Hyde, law professor at Rutgers University and labor law expert, explains, "This is the first time I've ever heard of a volunteer working for a company, assisting their profit-making ventures for free. It's mind-boggling. And I have absolutely no idea how that would be handled under the law." He ponders, "If people do it, and know that they are doing it, I don't know why it ought to be illegal. If they are unhappy with the situation they should leave."

But, as Hyde agrees, this is a question that strikes at the heart of the online world. Community is one of the biggest buzzwords in the Internet business, with nearly every site trying to incorporate some kind of bulletin board or chat room. Many of the biggest Web companies call themselves communities -- like GeoCities or Tripod. And nearly every community system is staffed in part by volunteers, who dedicate their time and maintain the connections that that community members have forged. Many of these companies simply couldn't grow their communities without volunteers helping direct the chaos of online discussions.

Some of the strongest communities on the Net, in fact, tout the opportunity to contribute significantly as a draw for their members. The Well, for example, was built on the backs of the hundreds of volunteers who host conference areas. "It was crucial to the Well," explains Williams. "Our model is, 'Everyone brings something to the picnic.' The opportunity to create something together with people you care about is not the bath water, it's the baby."

Likewise, nonprofit communities like SeniorNet couldn't possibly exist without their volunteer moderators. "Most nonprofits rely on volunteers. We're just grateful for whatever people can do," says Marcie Schwarz, director of education at SeniorNet. But, she adds, "It is a different situation when it's a public company. It's unusual for people to volunteer for a profit organization."

There are also companies, such as MiningCo.com, which have carefully avoided the volunteer system altogether. MiningCo.com has over 690 "guides" who run its specialty sites, bulletin boards and chat rooms, in return for 30 percent of revenues for their section; the top guides are making up to $11,000 a month, says CEO Scott Kurnit. As he puts it, "The best workers are entrepreneurs -- someone who really has a stake in the business and cares about what they are doing. The 10th best worker is a volunteer -- you can't make them do what you want to do, and they often tire of the task."

What does possess people to volunteer their time -- according to some AOL volunteers, up to 50 or 60 hours a week -- for a big, profitable and public company? In the early days of the community leader program, before AOL had a flat-rate pricing model, the answer was financial: A free account could be worth hundreds of dollars of connect-time charges a month. But the financial incentive flew out the window with the new $19.95-a-month pricing plan. Today, the answer most volunteers give is that they don't offer their time for AOL; they do it for their specific communities.

"I volunteer on AOL because of the people I've met along the way. When your offline life is difficult, and the people surrounding you don't seem to care, AOL is very appealing in the sense that most people feel the same way," explains one current volunteer who works in the Teen section, among others. "Once you become a community leader, you become attached to the people you work with, even if you don't care for the company itself."

Or, in the words of a former AOL volunteer: "We did it to reduce our bills, to give back to a community from which so many of us had gained so much, and because we simply loved what we did. There was a real team spirit and a feeling that one was truly appreciated and valued."

The volunteers may feel good about giving their time, but the for-profit online communities -- particularly the public companies like AOL, GeoCities or iVillage, which command high market valuations thanks at least in part to their devoted members -- are clearly profiting from those volunteers' services. The conundrum is that it would simply be too costly to try to pay dozens, hundreds or even thousands of volunteers for their time. Under traditional labor law standards, the issue of whether volunteers are performing vital company tasks becomes murky.

Not surprisingly, these community companies are touchy about the news of a potential Department of Labor investigation of AOL. The women's site iVillage, for example, which went public recently, has over 1,000 community volunteers. In a carefully worded statement, the company stated that "iVillage.com community leaders are true volunteers and not employees. Our community leaders typify the organic, member-driven nature that drives Internet community development in general ... Volunteerism is one of the central attributes of the Internet. Our hope is that the Internet's participatory nature is not what's at issue here."

Several of the community site leaders and law labor experts I spoke with wondered whether the unhappiness of the volunteers at AOL was even a Department of Labor problem. After all, several noted, volunteers always had the choice to quit volunteering if they were unhappy with the system. And it's also quite possible that the problem isn't volunteerism or community leaders in general, but specifically AOL's attitude toward community.

AOL's Brackbill says that AOL puts an emphasis on community, but most of the AOL habituis I spoke with disagreed. Many point to the flat-rate system as the downfall of community on AOL. Explains the former AOL employee: "AOL has done a turnaround on their attitude towards volunteers. At one point a volunteer was a person who kept people online talking -- and as long as they were online, all their friends were online too. When it was per-hour rates, people could spend $2,000 a month easily. When they turned it to an ad model, with flat-rate pricing, volunteers became a liability. Every person online is a modem someone can't use."

Others, like "Moozie," agree: "With a flat rate, AOL had so many more people coming online that they didn't have to woo people to stay there. People were replaceable. So what if someone's account got terminated or they weren't happy with the system? A newbie would sign on; there was always someone there to take their place."

The issue of how AOL treats its community and hosts is also affecting its new acquisition Netscape, where the community bulletin boards recently had their doors closed and their paid community hosts dismissed. Some of the hosts suspect that AOL will replace the boards with chat rooms and unpaid volunteers because they are cheaper to maintain.

What will happen next in the Department of Labor case? The labor law experts agree that it's impossible to say. As Jim Nelson, a labor lawyer in San Diego explains, "The time track is infinite here. They could start a formal investigation tomorrow; or they could decide it isn't worth pursuing, or there's not enough evidence, and it will just die and you'll never hear that there was even an investigation." But if AOL is ultimately found to be at fault, the company would not only be forced to pay compensatory wages to potentially thousands of volunteers but also back taxes on their wages to the IRS -- not a cheap endeavor.

A decision like that could have potentially huge ramifications on how AOL, and other Internet companies, deal with their communities and volunteers in the future. But the volunteers who are talking to the Department of Labor think it's worth it if it will improve the conditions at AOL. As another former community leader sighs, "A community driven by squeezing the most out of its volunteers in as short a time period, with quantity replacing quality screening and training, and with political persuasion more important than competence and caring, is not somewhere I wish to be."