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Many of America's best-known companies figured out a way to cut customer service costs. They've been doing this for years. They classify customer service workers as contractors and have them work from home. Amanda Aronczyk of NPR's Planet Money reports on a potentially illegal business model.
AMANDA ARONCZYK, BYLINE: When Yvonne Corder first heard about Arise Virtual Solutions, she was trying to find a way to homeschool her kids. Arise is a work-from-home pioneer. It's been around since the late 1990s, and it offers the opportunity to get paid to do customer service work from home.
YVONNE CORDER: To me, it just really sounded like it was fun and an easy way to make money.
ARONCZYK: Maybe not quite so easy. Corder had to pay for a three-month training class. She bought herself a headset, computer, installed a new phone and fax line. And for a few years there, if you were calling up Disney dining...
CORDER: You're going to get me.
ARONCZYK: Outside Little Rock, Ark.
CORDER: Right.
ARONCZYK: Now, Corder didn't work for Disney dining. And by the way, Disney did not respond to our requests for an interview. And she didn't exactly work for Arise either. She was an independent contractor, so she wasn't entitled to things like paid sick days.
CORDER: There was one point I was so sick, I had to hang up on one of my Disney guests because I had to throw up. They're like, well, you need to schedule time off. And I'm like, what? It makes no sense.
ARONCZYK: Corder is not the only one wondering about all this. Ariana Tobin is a ProPublica reporter whose team spent over a year investigating work-from-home call centers.
ARIANA TOBIN: Arise doesn't hire agents. Arise only will contract with what they call an independent business. A lot of the time, it's just one person.
ARONCZYK: Arise shifts a lot of training and gear costs from, say, Disney dining on to the customer service rep.
TOBIN: What you hear them say is we, quote-unquote, "squeeze the wastage" out of your employment costs.
ARONCZYK: Arise told us in a written statement that they've built a platform where agents can choose when, where and how often they work. But labor lawyer Shannon Liss-Riordan argues that's not quite true. In reality, she says, Arise maintains a lot of control over these workers. They're really more like employees than contractors. They've been misclassified.
SHANNON LISS-RIORDAN: So misclassification is the umbrella issue here.
ARONCZYK: Liss-Riordan is, like, lawyer famous for fighting cases against Uber, Lyft, DoorDash and other gig-economy companies. She says misclassification is increasingly common, and she's fought a series of these kinds of cases against Arise. She's not allowed to say exactly how many, though, because deep inside the contracts that the agents sign, it says if you have a problem with Arise, you have to go through private arbitration.
LISS-RIORDAN: It's basically like a private court.
ARONCZYK: You go to a private decision-maker, not a regular judge. The whole thing is confidential. Basically, what happens in private court stays in private court.
LISS-RIORDAN: Arbitration is a very effective means of companies keeping their workers in the dark about their legal rights.
ARONCZYK: So people like Yvonne Corder who took those calls for Disney dining had no idea that some of her fellow Arise customer service agents had filed complaints against the company.
CORDER: I didn't know there were so many other people that were going through the same thing or feeling the same thing.
ARONCZYK: And based on ProPublica's reporting, many of the agents who fought Arise won their cases. According to an American Bar Association report from earlier this year, the use of mandatory private arbitration has been increasing dramatically over the past three decades. Amanda Aronczyk, NPR News. Transcript provided by NPR, Copyright NPR.
