UNIDENTIFIED REPORTER, BYLINE: This is PLANET MONEY from NPR.
AMANDA ARONCZYK, HOST:
Let's say it's your birthday and you want to do something special.
PRE-RECORDED VOICE: Now, what can I help you with today?
ARONCZYK: So you decide to call up Disney World.
PRE-RECORDED VOICE: Please tell me the reason for your call in just a few words. Some examples are, how late is the Magic Kingdom open tonight?
ARONCZYK: What you really want is to eat inside the Magic Kingdom at Cinderella's Royal Table restaurant.
PRE-RECORDED VOICE: OK, let me get someone to help you. To make sure I get you to the right agent, I just need a little more information.
ARONCZYK: That right agent, once upon a time, very well might have been a woman named Yvonne Corder. And she would have tried to help you.
YVONNE CORDER: Well, I basically would say, did you have any dates in mind? Do you have any celebrations that we need to celebrate? That way we can make note of that.
ARONCZYK: And so you tell Yvonne, yeah, it is, in fact, my birthday. And I want to try the Clock Strikes Twelve chocolate mousse, which is a real dessert on the menu, by the way.
CORDER: We would know that it's your birthday, and they would try to do something magical. And whether it was sitting by a window so you could see the fireworks, sometimes they would have menus printed with your name on it.
ARONCZYK: At first, Yvonne loved doing customer service for Disney dining. She felt like she was part of the Disney magic. She remembers this one call in particular.
CORDER: There was a mom. I guess she had an adult handicapped child. She's like, can you please speak to her? You know, she thinks you're Cinderella and I'm making a reservation with Cinderella. And we really weren't supposed to do that. We were supposed to say, no, we're not allowed to, but I did it. I'll break the rules. And just to hear the joy - and she's asking me questions about my house. And it was sweet.
ARONCZYK: Did you put on a Cinderella voice?
CORDER: Yeah, I tried to be (laughter) Cinderella. I was a little more wispy.
ARONCZYK: So as you know, Yvonne was not actually taking calls from Cinderella's castle. She wasn't even a Disney employee. Now, we know this. We know a lot of this work has been outsourced. But when you call Peloton to ask why your bike hasn't arrived or you call TurboTax to ask why they're still charging your credit card or you call Home Depot or Airbnb or Nespresso, you could be talking to someone who is part of an increasingly popular model of customer service that you, dear listener, probably know nothing about.
And these big companies don't want you to know. Yvonne, like hundreds of thousands of other customer service agents, she had to sign a nondisclosure agreement saying she would not talk about where she was or who she worked for. In fact, she's taking some risk speaking to us, but she decided it's worth it because taking calls for the most magical place on Earth would eventually turn into a total nightmare.
(SOUNDBITE OF LEIGH MCALLISTER GRACIE'S "SMOKE AND MIRRORS")
ARONCZYK: Hello, and welcome to PLANET MONEY. I'm Amanda Aronczyk.
Customer service is expensive. It requires an army of people to answer all of your calls and your emails and chats when you want help. But many of America's best-known companies have figured out a way to slash these costs by relying on a secretive industry and a potentially illegal business model.
Today on the show, we're partnering with the investigative journalists at ProPublica to show you life on the other side of your customer service calls and to peer into the troubling future of work in America.
(SOUNDBITE OF LEIGH MCALLISTER GRACIE'S "SMOKE AND MIRRORS")
ARONCZYK: To tell the story today, I'm bringing in one of the ProPublica reporters who worked on this investigation. Her name is Ariana Tobin. Hello.
ARIANA TOBIN: Hello, Amanda.
ARONCZYK: So, Ariana, you and your team talked to dozens of people who took calls for some very well-known companies.
TOBIN: Yeah, we've talked to people who took calls for places like Barnes & Noble, eBay, TurboTax, Airbnb - a lot of places you've probably called before. But most of these agents, because they had signed nondisclosure agreements, didn't want to be recorded.
ARONCZYK: One exception was Yvonne Corder of Disney dining Cinderella fame. She was willing to talk. So what we're going to do is walk you through the story of how Yvonne Corder got involved and then how it all fell apart for her.
CORDER: So it must have been maybe about 11 years ago, I was watching "Good Morning America."
(SOUNDBITE OF MUSIC)
CORDER: And they were talking about this great new company called Arise. And they were looking for people to work at home - quality company.
(SOUNDBITE OF TV SHOW, "GOOD MORNING AMERICA")
UNIDENTIFIED PERSON: Virtual customer service - that's an area that a lot of our viewers right now are doing. It's the people who answer inbound phone calls from their homes.
ARONCZYK: Virtual customer service - Yvonne was intrigued. She was a mom of two little kids. She was trying to find a job that would let her stay home and home-school her kids. And here was this "Good Morning America" segment featuring a woman who seemed like she had a pretty good setup.
(SOUNDBITE OF TV SHOW, "GOOD MORNING AMERICA")
UNIDENTIFIED PERSON: Denise, who's doing this, is making about $14 an hour, working around 30 - a little 30-plus hours a week. And her grand total is $33,500. Again, from her home she's doing this.
ARONCZYK: The gig was with a company called Arise Virtual Solutions. And their pitch to people like Yvonne was that she could work from home and take customer calls for some of America's best-known companies - Carnival Cruise Line, Dick's Sporting Goods, Walgreens.
TOBIN: But then Arise's pitch to a company like Walgreens is, hey, we can save you money on your customer service without having to outsource to places like India or the Philippines. We're going to get you American customer service agents on the cheap.
ARONCZYK: Now, Arise did not agree to be interviewed for this story, but ProPublica has found that Arise is an example of an increasingly popular and pretty troubling business model. And this business model is broken down on this incredible chart that Arise uses to pitch its services to a company like Walgreens.
(SOUNDBITE OF PAPER RUSTLING)
ARONCZYK: I have it here. So picture a bar graph, and the first bar shows the normal cost of employing a customer service agent. Arise has highlighted a big chunk. It's the 32% of that cost that they say is wasted on things like equipment and training and, you know, lunch breaks.
TOBIN: And then on Arise's version of that cost bar, all that expensive stuff is magically gone. Where did it all go? It's not really in the sales pitch document, and certainly not in the "Good Morning America" segment pitching Arise to people like Yvonne.
(SOUNDBITE OF TV SHOW, "GOOD MORNING AMERICA")
UNIDENTIFIED PERSON: It's pretty much your customer service skills, your ability to work online and phone, and they do really good training for you. So it's a great opportunity.
ARONCZYK: Arise was selling the promise of independence and flexibility. For Yvonne, it sounded perfect.
CORDER: To me, it just really sounded like it was fun and an easy way to make money.
ARONCZYK: So the first thing she does is she goes onto Arise's website and she sees this list of all of these different training sessions. So, for example, there's a training to become a customer service agent for Barnes & Noble or for Carnival Cruise Line. Eventually, she comes across this lesser-known company that offers vacation deals called Interval International.
CORDER: And I thought, oh, this is really cool because I love travel. I could help people book travel. So I signed up to start training with that. And, I mean, it was, like, three months of training. It's not just a couple weeks. It's like a college class.
ARONCZYK: And Yvonne was like, oh, and also, I'm going to have to pay for this training - $295. And it was going to be all on her own time, too - four hours a night every night of the work week, plus homework.
TOBIN: Arise is shifting the cost of the training onto the customer service rep. And that's the first big way that they can make these customer service agents cheaper for the client.
ARONCZYK: Plus, Yvonne was going to need equipment - a phone headset, second phone line, special computer, fax machine, even though, come on, no one's actually going to send her a fax. Yvonne had to absorb all these costs.
TOBIN: After three months of training to work at Interval International, Yvonne was going to have to take a written test and practice customer service calls - a final exam to become an agent.
CORDER: And then I failed the exam.
ARONCZYK: How did you fail?
CORDER: Just I guess I didn't take calls very well. I guess I didn't practice well enough. You know, I lost my $295 and my background check money, and there's no way to get that back.
ARONCZYK: Did they give you feedback? Like, did they say what had gone wrong?
CORDER: No, they don't tell you anything. They just say pass or fail.
TOBIN: A lot of the people we spoke to just cut their losses and stopped here. But Yvonne felt like she didn't have much choice. Remember, she was trying to home-school her kids, and she needed a job she could do at home. Plus, she had already invested a lot of time and a lot of money into this Arise customer service thing.
CORDER: So and after a month, I was like, you know, I'm going to try it again and do something different.
ARONCZYK: So she logs back onto the Arise website, goes to that list of companies and trainings.
CORDER: I saw Disney come up and thought, God, anybody would love to work for Disney, you know?
ARONCZYK: Now, Yvonne's not one of those people who spends every vacation at Disney World, but she has been there a bunch of times, and she loves it there.
TOBIN: So she pays a few hundred dollars for another three-month training, and another group of trainers teach her how to take a customer call for Disney.
CORDER: They would want you to use as much Disneyana, I guess, as you possibly could. You know, you talk about having a magical day and, you know, who's your favorite character - you know, just trying to really draw them in about the whole experience.
ARONCZYK: For the Disney training, she comes up with this fail-proof plan that maybe bends the rules a little.
CORDER: There was about five of us who decided we were going to take our exam together because we didn't want to lose. We didn't want to fail. These girls had already failed in other classes, like I did, and we were, like, bound and determined we weren't going to fail. So we studied together. We took the exam together. One person would take it and get stuck on a question, and we'd say, no, no, no, this is the right answer. So we all passed.
TOBIN: Yvonne was finally in business. After more than half a year of not getting paid and spending hundreds of dollars for training and equipment, she finally signed the contract to work.
ARONCZYK: Her gig is specifically taking calls for Disney dining. So when you call up to make a reservation for four at Be Our Guest Restaurant in the Magic Kingdom...
CORDER: You're going to get me.
ARONCZYK: Outside Little Rock, Ark.
CORDER: Right. A lot of people would say, so where are you (laughter)? And we have to say, oh, you know, we're at Disney. And I would always say, well, I'm in a small call center just outside of Orlando - try to make it sound good. But they're like, we don't hear anybody in the background. And I would say, oh, we have these really amazing headsets. They cancel out everything. Isn't it cool - you know, just trying to brush it off (laughter).
ARONCZYK: Yvonne says that Disney wanted its customer service reps to sound like they were basically inside Cinderella's Castle. Yvonne even looked up the weather in Orlando every day.
CORDER: In case we were being asked, we'd look legitimate.
ARONCZYK: We reached out to Disney multiple times for comment, but they didn't respond.
TOBIN: Yvonne says that at first, she was making pretty good money - about $14 an hour. But when she looked at her paycheck, there was this fee taken out every time; $19.75 per paycheck goes right back to Arise.
ARONCZYK: And on top of that, her pay kept getting cut, eventually down to around $9 an hour. So she and some of her fellow customer service agents went to Arise and said, hey, we'd like to negotiate this contract.
CORDER: You know, we would ask, and all they would tell us is, well, this is what Disney is offering. You can sign the contract, or you don't have to sign the contract. It's up to you. That's all the answer you would ever get.
ARONCZYK: Now, Yvonne was not financially in a position to quit. This gig had become her only source of income. She'd gotten kind of trapped. After all the expenses - the Internet lines and the phone lines and the fax machines - Yvonne wasn't even sure she was earning minimum wage.
TOBIN: And, yes, there are minimum wage laws, but those only apply to people who are classified as employees. Yvonne wasn't anybody's employee. It said so right there in her contract. She didn't work for Arise. She didn't work for Disney. She was just an independent contractor.
ARONCZYK: This is how Arise is able to magically make that expensive chunk of customer service costs disappear. Maybe you can't make employees pay for their own training and Internet, and maybe you have to give employees paid lunch and bathroom breaks, but the rules are different for independent contractors. And so Arise argues that it does not run a call center with employees; it simply coordinates a network of teeny independent call service companies. Yvonne, for example - she's a customer service company of one.
TOBIN: Now, theoretically, one of the perks to being an independent contractor is that you are your own boss. You get to set your own hours. You get to decide which work you take and which work you don't take. You can wear your pajamas. The idea is that to a reasonable degree, you do not have another boss looking over your shoulder all the time, micromanaging. These are the things you gain when you give up the rights that employees have.
And Arise told us in a written statement that one of the main reasons people work with them is that their, quote, "platform offers significant flexibility, which is an important benefit," and that it allows people to choose when, where and how often to provide services.
ARONCZYK: But what ProPublica has found is that Arise has been quietly trying to push the boundaries of what a company can ask of its independent contractors. It essentially offers a service to companies like Disney or Barnes & Noble or Airbnb that says, we can help you get all the benefits of hiring independent contractors but still let you control them as though they were your employees.
TOBIN: This is something that Yvonne Corder slowly started to see. So, for example, her calls were monitored, recorded and graded. Yvonne doesn't remember the exact metrics that she was graded on, but we got ahold of scorecards from a bunch of different companies, and here are some of the actual criteria they used for grading. Did the agent express genuine interest in helping? If so, they got 3.75 points.
ARONCZYK: Did the agent keep control of the call? That's worth 2.857143 points.
TOBIN: Forget a detail? That's 7.1429 points from Gryffindor.
ARONCZYK: And some of these metrics people like Yvonne had barely any control over.
CORDER: There's one time there was, like, a neighbor's dog was barking. And they're like, we could hear your dog barking in the background, and you need to make sure that dog's - I'm like, it's not mine. I don't have a dog (laughter). And, you know, they're threatening your contract because your neighbor's dog's barking.
ARONCZYK: You can just be like, it's Cinderella's Rottweiler.
CORDER: (Laughter) That's what I should've said. She's got protection now.
ARONCZYK: Yvonne was constantly nervous about losing her job. If her scores got bad enough, Arise would cancel her contract, essentially firing her. And so the independence of this job just started to not feel so independent or flexible. There was this one morning in particular that Yvonne remembers. She woke up feeling sick, but she'd already agreed to take calls that day.
CORDER: I was so sick, you know, I couldn't even call in. You have to work. And I remember 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. And, you know, they're like, well, you know, you need to schedule time (laughter) - you know, that's always a thing. You need to schedule time to use the bathroom or, if you're not feeling well, schedule time off. And I'm like, that makes no sense. So I got written up for hanging up on a guest.
ARONCZYK: You were supposed to schedule time to throw up?
CORDER: You were supposed to schedule time for, you know, things that might crop up (laughter). It was ridiculous.
ARONCZYK: All of this stuff, for Yvonne, started to add up. Finally, she saw it clearly. It felt to her like she was essentially an employee of Arise without the rights of an employee. Like, Arise could exert this massive amount of control over her in exchange for pretty low pay.
TOBIN: In a statement, Arise argues that they are clear and transparent with people like Yvonne and that, quote, "the specific requirements and needs of each opportunity are clearly laid out each step of the way."
But our team has heard from many people who felt like Arise and its clients asked for way too much. People told us they were required to work holidays and weekends or to be drug tested at any time. We learned in one case that two Arise instructors showed up at an agent's house to inspect his home.
ARONCZYK: Eventually, Yvonne realized she just wasn't earning enough money to make it worth it. She'd already downsized to a smaller house, but that had created a new problem. Arise was still listening closely to some of her calls. And she was worried that she was getting demerits for every little noise in the background.
What was the final moment where you're like, actually, I'm not going to do this anymore?
CORDER: I think it was when we lost our house and we were in a smaller home and I kept having to put my children off. And they had to be extremely quiet, and it wasn't fair to them anymore. That was when I knew enough was enough. I had to do it for them. That was just - that was it. I was done.
ARONCZYK: Yvonne quit - or technically, she stopped taking contracts with Arise and Disney.
CORDER: It took me a long time not to say have a magical night instead of saying, I love you, honey, have a magical night. I'm like, oh, God.
ARONCZYK: Looking back at her time with Arise, she wondered, was this weird arrangement even legal? What she didn't know was that hundreds of other Arise workers had been wondering the same thing, and some had started to take legal action.
TOBIN: As we were doing our reporting on Arise, we had a lucky break. We got ahold of a number of documents that would typically be confidential. And they laid out in detail all of the ways in which Arise's business model has been found to violate federal labor law. We also found that they've been able to keep growing without really changing much of anything at all.
ARONCZYK: The strategy for getting away with that - after the break.
(SOUNDBITE OF GEOFF SMITH'S "STRIP PARADE")
TOBIN: When we started looking at Arise, we heard the same name come up over and over again.
SHANNON LISS-RIORDAN: Yes, I'm Shannon Liss-Riordan. I'm a labor lawyer in Boston, Mass.
ARONCZYK: Shannon is kind of low-key famous - you know, like lawyer famous - for fighting with companies like Uber and Lyft and DoorDash and Instacart, companies known for popularizing this idea of the so-called gig economy. And the gig economy is exactly what we've been talking about with Arise - not employing people, but instead building an army of independent contractors.
TOBIN: There is a legal way to use contractors and an illegal way. And Shannon says companies are increasingly breaking the law, calling people contractors when they should be labeled employees. There's a legal term for this - misclassification.
LISS-RIORDAN: So misclassification is the umbrella issue here. When companies get away with these schemes, when companies get away with misclassifying their workers and not getting held accountable for it, it creates an uneven playing field for any companies who are trying to do the right thing, who would rather follow the law. It makes it very hard for them to compete economically.
TOBIN: Shannon has actually fought a series of misclassification cases against Arise. She can't tell us exactly how many, but we've gotten our hands on a few of those case documents and we know there are more.
ARONCZYK: And this is basically how those cases went. An Arise customer service rep would say, I'm pretty sure you were treating me like an employee but denying me those rights.
TOBIN: And then Arise would argue things like, but you signed an agreement saying you weren't our employee. You never submitted a job application to Arise, never met anyone who actually worked at Arise, never got an Arise email address because Arise, they argued, is just a platform to connect contractors with corporations.
ARONCZYK: And then in two of the cases ProPublica saw, an arbitrator applied this six-part test to decide that the agent was, in fact, doing the work of an employee or a contractor. They looked at measures like, did Arise exercise control over the agent? Did they monitor their work? Are the agents vital to Arise's business? Does the agent really have the ability to schedule their own hours?
TOBIN: And in these cases, the arbitrator went through the test and said, like, check, check, check. Yeah, Arise has been violating federal labor law by misclassifying its workers.
ARONCZYK: Arise was ordered to reimburse the agents for those training expenses, reimburse them for equipment expenses, pay thousands of dollars in back pay, bringing their hourly rate up to minimum wage, essentially going back in time and treating them as though they were employees.
TOBIN: But even though there have been these repeated misclassification findings against Arise and other gig economy companies, Shannon says that it has been incredibly hard to get any kind of big, meaningful changes. And that is because of a very specific strategy used by companies like Arise. It's buried deep inside the contracts the agents sign and says, if you have a problem with, say, misclassification, you can't take us to court. You have to go through private arbitration.
LISS-RIORDAN: So arbitration is an alternative to court proceedings. It's basically like a private court.
ARONCZYK: These are not like normal court proceedings. 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.
TOBIN: Companies like Arise have claimed that private arbitration works faster and better than the clunky judicial system. And they do want to resolve disputes, just one person at a time.
LISS-RIORDAN: But really, what they meant was they were hoping everyone would go away because not that many people are really going to go through the trouble of bringing a claim on their own.
ARONCZYK: Shannon says that what Arise really doesn't want is for a bunch of angry agents to get all together as a big group and complain collectively. So the Arise contract also includes a class-action waiver.
LISS-RIORDAN: Understandably, companies have not been happy about class actions. If they are responsible for harming a lot of people, they don't want to have to pay for it. So if they bury these arbitration clauses into small, fine-print legalese that most people don't understand - the U.S. Supreme Court over the last decade has said they can do that. And then when you signed that agreement, even if you didn't know you signed it, you gave up your right to be part of a class action in court.
TOBIN: The end result of this strategy, Shannon says, is that a company like Arise can violate federal labor law because each case is kind of contained. So Arise can pay a few thousand dollars here and there - it's just a cost of doing business - but no one is ever really allowed to see the whole picture, that these violations are happening over and over.
LISS-RIORDAN: It's hard to actually make any real change. Arbitrators can't order a company to just stop doing something that's illegal.
ARONCZYK: So you can't set any precedent with arbitration?
LISS-RIORDAN: No. So generally, arbitration is non-precedential. So in other words, every time you're doing it, it's like you're doing it from scratch. And even if you get a great ruling, it won't apply to another case.
ARONCZYK: Shannon says the best way to fight misclassification abuse in the gig economy is to just fight as many individual cases as humanly possible.
LISS-RIORDAN: We've been bringing a lot of individual cases one by one - thousands of them.
ARONCZYK: Thousands of them.
LISS-RIORDAN: Yes. It's been, I think, kind of a shock to these companies because they just thought that, OK, you know, maybe a few people will bring in arbitration and, at worst, maybe we have to pay off a few people. They weren't expecting this.
TOBIN: Of course, Shannon isn't allowed to talk about any of these cases in detail. And the workers in these cases aren't allowed to tell each other about them either.
LISS-RIORDAN: Arbitration is a very effective means of companies keeping their workers in the dark about their legal rights.
ARONCZYK: This whole story we've been telling you today about Arise is in part about the gig economy and the vulnerability of the workers who do those jobs. But it's also about the way that the legal system can be used to isolate those workers so that they never even know their rights.
TOBIN: Yvonne Corder, who took calls for Disney dining, she had no idea that some of her fellow Arise customer service agents had been able to push back against the company and win. I was actually the one who told her.
CORDER: I just assumed it was a me thing that I was going through. I didn't know there were so many other people that were going through the same thing or feeling the same thing. And it was quite interesting, our first few conversations. I was like, wow.
ARONCZYK: What part was the most surprising?
CORDER: That people actually tried to sue them because you weren't allowed to. I mean, it says it in your contract - no class-action lawsuits. And I was like - always wanted to because it was ridiculous. I wasted my time. I got sick, treated like poop. I would love to have challenged it, but I knew it wouldn't get anywhere, so I just never bothered.
TOBIN: Yvonne is doing better now. She has a new job running a child care center. But she still sees these Arise ads everywhere, and she wants other people to know what she had to find out the hard way.
CORDER: It's not that pretty picture that you're seeing with, you know, your feet up on the bed with your coffee and your newborn in your arms. It's just not happening.
ARONCZYK: Arise and other companies like it just keep on growing, especially now. There are a lot of people out there desperate to be able to work from home. Arise's CEO said recently, business is booming.
(SOUNDBITE OF DANIEL ALEXIS PEMBERTON'S "DOCTOR DIZZY")
TOBIN: Do you work in customer service? My team at ProPublica and I would really like to hear from you. We've posted a link explaining how to get in touch and a link to the print story on the PLANET MONEY website.
ARONCZYK: You can find PLANET MONEY on TikTok, Twitter and Facebook and Instagram. We are everywhere @planetmoney.
Today's show was produced by Alexi Horowitz-Ghazi. It was edited by Kenny Malone. Alex Goldmark is our supervising producer. We also want to thank our collaborators Ken Armstrong and Justin Elliott and everyone else over at ProPublica who investigated this story.
TOBIN: I'm Ariana Tobin.
ARONCZYK: And I'm Amanda Aronczyk. This is NPR. Thanks for listening.
(SOUNDBITE OF DANIEL ALEXIS PEMBERTON'S "DOCTOR DIZZY")
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.