Arise Virtual Solutions, Inc.

National Labor Relations Board - Board Decisions

Aug 16, 2018

366 NLRB No. 163 (N.L.R.B. 2018)

366 NLRB No. 163
NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
be included in the bound volumes.
Arise Virtual Solutions, Inc. and Matthew Rice. Case
12–CA–144223
August 16, 2018
DECISION AND ORDER
BY MEMBERS PEARCE, MCFERRAN, AND KAPLAN
On August 12, 2016, Administrative Law Judge
Charles J. Muhl issued the attached decision. The Re-
spondent filed exceptions and a supporting brief, the
General Counsel filed an answering brief, and the Re-
spondent filed a reply brief. The General Counsel filed
cross-exceptions and a supporting brief, and the Re-
spondent filed an answering brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The judge found, applying the Board’s decisions in D.
R. Horton, 357 NLRB 2277 (2012), enf. denied in rele-
vant part, 737 F.3d 344 (5th Cir. 2013), and Murphy Oil
USA, Inc., 361 NLRB 774 (2014), enf. denied in relevant
part, 808 F.3d 1013 (5th Cir. 2015), that the Respondent
violated Section 8(a)(1) of the National Labor Relations
Act by maintaining and enforcing its dispute resolution
program, formally titled the “Acknowledgement and
Waiver Agreement,” that requires the Charging Party and
other client support professionals (CSPs), as a condition
of employment, to waive their rights to pursue class or
collective actions involving employment-related claims
in all forums, whether arbitral or judicial.
Recently, the Supreme Court issued a decision in Epic
Systems Corp. v. Lewis, 584 U.S. __, 138 S.Ct. 1612
(2018), a consolidated proceeding that included review
of court decisions below in Epic Systems, 823 F.3d 1147
(7th Cir. 2016), Ernst & Young LLP v. Morris, 834 F.3d
975 (9th Cir. 2016), and NLRB v. Murphy Oil USA, Inc.,
supra. Epic Systems concerned the issue, common to all
three cases, whether employer-employee agreements that
contain class- and collective-action waivers and stipulate
that employment disputes are to be resolved by individu-
alized arbitration violate the National Labor Relations
Act. Id. at __, 138 S.Ct. at 1619–1621, 1632. The Su-
preme Court held that such employment agreements do
not violate this Act and that the agreements must be en-
forced as written pursuant to the Federal Arbitration Act.
Id. at __, 38 S.Ct. at 1619, 1632.
The Board has considered the decision and the record
in light of the exceptions and briefs. In light of the Su-
preme Court’s ruling in Epic Systems, which overrules
the Board’s holding in Murphy Oil, we conclude that the
complaint must be dismissed.1
ORDER
The complaint is dismissed.
Dated, Washington, D.C. August 16, 2018
______________________________________
Mark Gaston Pearce, Member
______________________________________
Lauren McFerran, Member
______________________________________
Marvin E. Kaplan, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
Susy Kucera, Esq., for the General Counsel.
Adam P. KohSweeney, Esq. (O’Melveny & Myers, LLP), of San
Francisco, California, and Peter W. Zinober (Greenberg
Traurig, LLP), of Tampa, Florida, for the Respondent.
Shannon Liss-Riordan, Esq. and Jill Kahn, Esq. (Lichten &
Liss-Riordan, P.C.), of Boston, Massachusetts, for the
Charging Party.
DECISION
CHARLES J. MUHL, Administrative Law Judge. At first
glance, this case appears to involve another, routine application
of the Board’s decisions in Murphy Oil USA, Inc., 361 NLRB
774 (2014), and D. R. Horton, Inc., 357 NLRB 2277 (2012).
The General Counsel’s complaint alleges, and the record evi-
dence demonstrates, that Arise Virtual Solutions, Inc. (the Re-
spondent) required Charging Party Matthew Rice and other
client support professionals (CSPs) to sign an “Acknowledge-
ment and Waiver Agreement” as a condition of working for the
Respondent’s clients. Under the agreement, CSPs waived their
rights to enter into any collective or class action with coworkers
on any matters, and instead are limited to individual arbitra-
tions. The Board repeatedly has concluded that such agree-
ments violate Section 8(a)(1) of the National Labor Relations
Act
The deeper question, and the actual matter in dispute, is
whether CSPs are employees or independent contractors of the
Respondent. If they are independent contractors, CSPs are
statutorily excluded from the Act’s coverage and Murphy Oil
does not apply. The added wrinkle here is that the Respondent
is one of the newer kinds of companies that provides its ser-
vices through an Internet platform. Its business model gener-

1 We therefore find no need to address the other issues presented in
the case or raised by the parties’ exceptions.
2 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ates a non-traditional relationship between the Respondent and
CSPs. Nevertheless, determining what that relationship is un-
der the law still requires an analysis of the traditional common-
law factors contained in the Restatement (Second) of Agency §
220. It also requires an evaluation of the Board’s independent
business factor recently refined in FedEx Home Delivery, 361
NLRB 610 (2014). After applying these factors, I conclude
that CSPs are employees of the Respondent and the Respondent
has violated the Act as alleged in the complaint.
STATEMENT OF THE CASE
This case was tried in Miami, Florida, on May 2 and 3, 2016.
On January 12, 2015, Matthew Rice, an individual, filed the
original unfair labor practice charge, which was docketed as
Case No. 12–CA–144223. On February 5, 2015, Rice filed an
amended charge. On April 27, 2015, the General Counsel is-
sued a complaint against the Respondent, alleging multiple
violations of Section 8(a)(1) of the Act. According to the com-
plaint, the Respondent has unlawfully maintained an “Ac-
knowledgment and Waiver Agreement” (the “waiver agree-
ment”), since on or about January 16, 2014. The waiver
agreement allegedly contains a provision which requires em-
ployees to waive their statutory right to file class action law-
suits in court, arbitration, or any other forum against the Re-
spondent. The Respondent purportedly has required employees
to enter into the waiver agreement as a condition of employ-
ment. The complaint also alleges that, about November 13,
2014, Matthew Rice filed an opt-in consent form as a plaintiff
in a class action complaint against the Respondent, alleging
violations of the Fair Labor Standards Act. On November 18,
2014, the Respondent requested that Matthew Rice withdraw
that form, because he had previously signed the waiver agree-
ment.
On May 11, 2015, the Respondent filed a timely answer to
the complaint. The Respondent filed amended answers on
April 26 and 27, 2016. The Respondent denied the complaint
allegations and asserted numerous affirmative defenses. Its
principal defense is that Matthew Rice is not a Section 2(3)
employee of Arise Virtual Solutions, Inc.
On the entire record, including my observation of the de-
meanor of witnesses, and after considering the briefs filed by
the General Counsel and the Respondent, I make the following
findings of fact and conclusions of law.
FINDINGS OF FACT
I. JURISDICTION
The Respondent contracts with corporate clients to provide
customer service using representatives who operate from re-
mote locations through the Company’s Internet site. The Re-
spondent’s principal office and place of business is in Miramar,
Florida. In conducting its business operations in the past calen-
dar year, the Respondent derived gross revenues in excess of
$500,000. It also purchased and received, at its Miramar, Flor-
ida facility, goods valued in excess of $50,000 directly from
points located outside of the state of Florida. Thus, at all mate-
rial times, I find that the Respondent has been an employer
engaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act, as the Respondent admits in its answer to the
complaint.
II. ALLEGED UNFAIR LABOR PRACTICES
A. The Contracts Between the Respondent and
Independent Businesses
The Respondent is a virtual call center technology company
that began business operations in 1997. Its genesis was large
companies, including Barnes & Noble, Disney, and Sears, look-
ing to contract out the work involved in responding to customer
service inquiries. The Respondent provides Internet-based
software and infrastructure to connect these companies with
businesses that provide customer service. In the Respondent’s
vernacular, these are “independent businesses” (IBs). The Re-
spondent currently has contracts with approximately 8,800 IBs.
Each IB has an independent business owner (IBO).
The Respondent requires any party who wishes to become an
IB to first incorporate a business. Then the corporation and the
Respondent enter into a Master Services Agreement (MSA).
(GC Exh. 2.) The term of an MSA is indefinite, but may be
terminated by either party for any reason. Under the MSA, the
Respondent offers the IB opportunities to provide customer
service to the Respondent’s clients. To perform work for a
specific client, the IB must enter into a second agreement, a
Statement of Work (SOW), with the Respondent. An SOW
typically runs for 90 days. The Respondent and the IB then
designate in the SOW the client support professionals (CSPs)
who will provide customer service. That work includes an-
swering customer telephone calls or emails, and providing sup-
port in chat rooms. The Respondent derives roughly 85 percent
of its revenue from fees paid by clients for customer service
provided by CSPs.1
Section 1 of the MSA, entitled “Independent Contractor Re-
lationship,” contains the terms of the relationship between the
Respondent and an IB. This includes certain requirements
related to CSPs. Section 1.3 states: “The [IB] shall be solely
responsible for the hiring, firing and/or discipline of all its em-
ployees and contractors, including [a CSP].” Section 1.6 states
that the IB “agrees that it is solely responsible to compensate
and provide any benefits that may be required by law . . . to any
[CSP] employed by or under contract with the [IB]” to perform
customer service.
Section 2 of the MSA addresses the Respondent’s certifica-
tion, or training, requirements. These include a “client certifi-
cation course,” or a course specific to a client such as Barnes &
Noble. CSPs must complete the course prior to performing any
customer service work for that client. Section 2.2 states that the
Respondent is the “sole certifying authority” for determining if

1 The Respondent changed the terminology it used to describe the
entities involved in its business operations in February 2012. (GC Exh.
9.) Prior to then, independent businesses were referred to as virtual
services corporations or super virtual services corporations. Client
support professionals previously were called Arise Certified Profes-
sionals. This old parlance is reflected in certain of the documents in the
record. The Respondent’s announcement concerning the change in
terminology stated that the Company was making the move because
“[t]he acronyms ACP and VSC have at times led to the misconception
that ACPs and VSCs are Arise employees.”
ARISE VIRTUAL SOLUTIONS, INC. 3
a CSP has obtained a client certification. It also states that the
Respondent retains the “sole discretion” to establish and modi-
fy the certification requirements. Section 6.1 sets forth that the
Respondent will provide login credentials to CSPs for access to
both the Respondent’s systems and the systems of any clients
such as Barnes & Noble.
Finally, Section 10.5 of the MSA gives the Respondent the
right to unilaterally amend the terms of the MSA, or any SOW
thereunder, with reasonable notice to the IB. The IB’s only
options thereafter are to accept the amendment or terminate the
MSA. Section 11.14 of the MSA requires IBs to insure that
their CSPs assigned to perform any work under an SOW “will
agree to execute all document (sic) required by Arise pursuant
to the terms of the SOW.”
B. How Matthew Rice Became a Client Support Professional
In March 2008, Patricia Rice incorporated a limited liability
company in the state of Florida called Certified Client Solu-
tions, LLC (CCS). (R. Exh. 10.) She is the company’s sole
owner. She did so to become an IB, and also a CSP, so she
could provide customer service to the Respondent’s clients. At
material times, CCS and the Respondent were parties to an
MSA that Patricia Rice executed in September 2010.
A year or two after CCS was incorporated, Matthew Rice,
the Charging Party in this case, became a CSP and began
providing customer service to Arise clients under the MSA and
SOWs between the Respondent and CCS. (GC Exh. 2, Section
11.6; GC Exhs. 3, 4 and R. Exh. 5, Program Specific Appen-
dices.) The Respondent requires CSPs to be named in the
SOWs. Working out of his bedroom, Matthew Rice provided
customer service for Arise clients Barnes & Noble, Disney, and
Sears. Matthew Rice also happens to be Patricia Rice’s son.
To become a CSP, Matthew Rice had to meet a number of
requirements set by the Respondent. The requirements are the
same for any individual who wishes to become a CSP. First,
Rice had to sign up and obtain login credentials on the Arise
website.2 He then passed a phone test with simple questions to
gauge his speaking ability. Next, Rice had to pay for and pass a
background check, completed by a third-party contractor.
Following those initial steps, the Respondent required Rice
to complete its “CSP 101” training course. (GC Exh. 10.) The
Respondent created this course and contracted out the curricu-
lum development. The Company’s curriculum design team
ultimately approves the course content. The Respondent
charged Rice a fee in the neighborhood of $100 to take this
course. Through CSP 101, CSPs learn how to use the Re-
spondent’s software; the technology, equipment, and security
requirements to perform customer service work through the
Arise website; and how to organize and operate a home office.
(GC Exhs. 11–16.) The course also provides CSPs with train-
ing on how to properly perform customer service work. This
includes how to maintain a professional image and use proper
language during a phone call. (GC Exh. 19.) It also includes
training on the language and formatting to properly respond to

2 The Respondent’s virtual call center technology is referred to by a
variety of different terms in the record, including Internet site, website,
platform, and portal.
an emailed customer service inquiry, as well as acceptable re-
sponse times to those inquiries. (GC Exh. 20.) The training
covers proper time management as well. (GC Exh. 18.)
The CSP 101 course also introduces CSPs to the Respond-
ent’s “performance expectations” and methods the Company
uses to monitor CSP performance. (GC Exh. 22.) The training
materials detail the Respondent’s performance metrics, as well
as “key performance indicators” (KPIs) from Arise clients. The
Respondent summarizes its performance management as fol-
lows:
Because of the severe consequences of Client Support Profes-
sionals not meeting KPIs, Arise has implemented a clear and
concise performance management system. In addition to in-
forming you of the KPIs, it entails comprehensive call moni-
toring, performance statistics reviews and feedback opportu-
nities.
(GC Exh. 22, p. 10.)
Other than successfully completing the CSP 101 course, the
Respondent does not maintain any educational requirements for
CSPs. Matthew Rice obtained a GED prior to becoming a CSP
and performing work through the Arise portal.
C. Working Conditions of Matthew Rice and Other Client
Support Professionals
1. Wages
As to CSPs’ wages, each SOW provides the payment that the
Respondent would make to an IB for providing customer ser-
vice. For example, one SOW between the Respondent and
CCS for Barnes & Noble phone customer service called for the
Respondent to pay the greater of $1.45 per call or $4 per “ser-
vice interval,” or 30 minutes worked. (GC Exh. 3, p. 15.) An
SOW for email customer service provided a pay rate of $1.25
per email. (GC Exh. 4, p. 15.) For each biweekly invoice peri-
od, the Respondent charges IBs a fee for each CSP accessing
the Respondent’s website to perform the customer service
work. CCS paid a fee of $19.75 per CSP for each invoice peri-
od. (R. Exh. 12.) The Respondent deducted the fee from the
total amount it paid CCS for the work CSPs performed. The
Respondent does not withhold taxes for CSPs from its pay-
ments to IBs.
IBs, including CCS, are responsible for determining how
much to pay their CSPs, out of the revenue received from the
Respondent. In Matthew Rice’s case, Patricia Rice paid her
son the full amount of money the Respondent paid CCS for
work that Matthew Rice performed. For other CSPs, she re-
tained a portion of the payment for herself. CCS issued 1099
tax forms to CSPs, including Matthew Rice, who performed
work through the Arise website.
2. Equipment
When performing customer service work for Arise clients,
the Respondent requires Rice, and other CSPs, to use certain
equipment. This includes a computer, a headset for phone
calls, and a traditional phone line. CSPs obviously need Inter-
net access as well. The Respondent does not cover the cost to
CSPs of obtaining this equipment. Matthew Rice paid roughly
$200 to obtain the equipment he needed.
4 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3. Client-specific Training
Using this equipment and credentials supplied by the Re-
spondent, CSPs then log in to the Arise website to view cus-
tomer service work opportunities. (GC Exh. 26(a).) Once a
CSP selects a particular job opportunity, the CSP must pass a
client certification course before performing any customer ser-
vice work. CSPs also pay a fee to complete this aspect of train-
ing. Rice took client certification courses in order to perform
work for Barnes & Noble, Disney, and Sears. Each time, Rice
paid a fee of about $100. These courses were conducted in
virtual classrooms through the Arise website, with other stu-
dents and multiple instructors present. The instructors went
through training exercises to enable the CSPs to navigate the
computer systems that each client had. The instructors also
trained the CSPs on customer service skills, including how to
talk and relate to customers. Each course entailed 5 to 6 hours
of training a day for about 3 weeks total.
4. Work Schedules
After passing a client certification course, a CSP may select
30-minute service intervals on the Arise website to perform
customer service work for the client. The client determines the
work hours to be made available and the number of representa-
tives needed during each interval.
The Respondent posts all available work opportunities on its
website at the same time, once per week.
Once a CSP schedules an interval, the CSP can swap or can-
cel the interval at any time greater than 48 hours prior to its
start. The Respondent gives CSPs who work for top-
performing IBs the option to “pre-select” their hours, or choose
service intervals first. If a work opportunity is not selected by
any CSP, the Respondent sometimes offers an additional pay-
ment to provide an incentive for a CSP to schedule it. Pursuant
to the SOWs, the Respondent retains the right to remove, at its
sole discretion, service intervals that “become unnecessary due
to a decrease in call or contact volume” of a client. (GC Exh. 3,
Section 6.)
When he provided customer service for Arise clients, Mat-
thew Rice worked 20 to 30 hours a week, using the method
described above to select his hours. Because of the structure of
the Respondent’s process, Matthew Rice’s work hours in 2014
and 2015 often were scattered throughout the day. (GC Exh.
47.)
5. Business Identification
When responding to customer service inquiries, CSPs do not
identify themselves as working for the Respondent. Instead,
CSPs are made to appear as if they are working directly for the
Respondent’s clients. For example, Matthew Rice’s signature
block in email responses to customers for Barnes & Noble stat-
ed “Matt, Customer Service Representative, Barnes & Noble.”
(GC Exhs. 31, 32, 34.) CSPs are instructed in training not to
say anything about the Respondent during interactions with
customers.
6. Performance Requirements and Monitoring
CCS and the Respondent entered into two SOWs effective
November 14, 2014, to provide customer service by telephone
and by email for Barnes & Noble customers. (GC Exhs. 3 and
4.) These SOWs had a term of 60 days and expired on January
15, 2015. The parties designated Matthew Rice as the sole CSP
to provide customer service under the SOWs.
As previously noted, SOWs between the Respondent and IBs
set forth the requirements that CSPs must meet when respond-
ing to customer service inquiries. Thus, the Barnes & Noble
SOWs included the requirements which CCS, through Matthew
Rice, had to meet. With respect to phone customer service,
Matthew Rice had to service a minimum of 20 intervals of 30
minutes each per week. As to email, the minimum number of
weekly intervals serviced was 7.
The SOW included 5 performance requirements, each of
which provided a minimum level needed to earn a one, two, or
three star rating. The Respondent’s clients determined how
each of those star ratings was achieved. However, the Re-
spondent reserved the right to terminate the SOW if the average
of all performance metrics for a period of 4 consecutive rolling
weeks was below the minimum necessary to earn one-star per-
formance.
Three of the performance requirements were objective
measures, all of which the Respondent monitored through its
platform. First, the Respondent maintains its own metric,
called “commitment adherence,” to determine the percentage of
service intervals scheduled that a CSP actually ends up work-
ing. The Respondent tracks this commitment adherence by
verifying that the CSP is logged into the Arise website during
the interval. If a CSP cancels an interval less than 48 hours
before it begins or does not work the interval, the CSP’s com-
mitment adherence percentage is negatively affected. When
Rice did not work intervals that he was scheduled, the Re-
spondent issued notices to CCS and Patricia Rice passed the
notices on to her son. Second, the Respondent tracked “inter-
vals serviced,” or how many 30-minute intervals Matthew Rice
worked for Barnes & Noble. Third, the Respondent monitored
“average handle time,” or the average length of time Matthew
Rice took on each call. The remaining 2 requirements were
subjective measures: “quality scores (QA)” and “customer sat-
isfaction (OSAT).” These will be discussed in further detail
below.3
The Respondent maintains a department called “Client Re-
sults.” Within the department, the Company employs 20 to 25
client results managers and 20 to 25 performance compliance
leads. Their job is to monitor CSP performance and insure they
are adhering to the performance requirements in the SOWs.
The Respondent also utilizes chat performance facilitators
(chat PFs) and quality assurance performance facilitators
(QAPFs) for performance monitoring. Chat PFs provide chat
support to CSPs when an issue arises with a customer during a
phone call. CSPs can ask the chat PF to “escalate” or transfer
the customer to the PF, who is identified on the call as a super-
visor. Chat PFs also can listen to recorded calls and notify
QAPFs if a CSP “needs more attention.” (GC Exh. 44, p. 38.)

3 Every SOW contains performance requirements including com-
mitment adherence, although the other specific requirements may vary
from client to client or based upon the type of service being provided.
For example, the Disney web support chat SOW contained a perfor-
mance requirement of “number of concurrent chats.” (R. Exh. 5(d).)
ARISE VIRTUAL SOLUTIONS, INC. 5
QAPFs evaluate a CSP’s work performance against the per-
formance requirements contained in the SOWs. If a CSP is not
meeting any of those requirements, the Respondent, through
QAPFs, sends information to the IB comparing actual perfor-
mance with the contractual requirements and providing feed-
back on the CSP’s performance.
For the quality score (QA) performance measure, QAPFs lis-
ten to and audit recorded customer service calls handled by a
CSP. The client determines the number of calls audited and
provides a form to the QAPFs to evaluate a CSP’s performance
on the call. The Barnes & Noble audit form included a variety
of different performance categories with multiple factors there-
in. (GC Exhs. 35 and 37.) The QAPF is responsible for giving
a score to each factor. In the category of “Quality of Service,”
evaluation factors included whether a CSP “expressed genuine
interest in helping;” “communicated in a way the customer
could understand;” and used a “courteous, confident, profes-
sional, positive” tone. The “Call Disposition” category had a
“kept control of the call” component. In “Bonus Points,” the
factors included whether the CSP was “exceptionally enthusias-
tic;” “used empathetic statement;” and attempted to and suc-
cessfully “de-escalated” the call. Finally, the “Critical Errors”
category had a line item for “confrontational.” As these factors
indicate, QAPFs had to use independent judgment when con-
ducting these audits. (Tr. 297–298.)
For customer satisfaction, QAPFs review surveys completed
by customers, then provide feedback to the IB and CSPs re-
garding the CSPs’ performance.
D. The Respondent’s Decision Not to Renew the SOW
Designating Matthew Rice as a CSP for Barnes & Noble
From November 14, 2014, to January 15, 2015, Performance
Compliance Lead Sheri Phillips and QAPF Sheryl Holland sent
Patricia and Matt Rice a total of 7 emails with negative feed-
back on his performance.4 (GC Exhs. 29, 31 to 35, 37.)
In an email dated December 1, 2014, Holland provided feed-
back after a customer gave Matthew Rice a “1” rating for an
email customer service experience. (GC Exh. 31.) Holland
detailed instructions on when a customer was fully authenticat-
ed and the correct greeting and template response that Rice
should have used. She also noted improper grammar that Rice
used in a sentence and advised him he needed to proofread his
responses. In an email dated December 12, 2014, Phillips stat-
ed the following concerning a customer service call Rice han-
dled:
Please be sure that you are displaying confidence on the calls
and spending the time needed to practice when not servicing
so that you can become more familiar with the system. Please
also take advantage of any enhancement sessions being of-
fered…
(GC Exh. 33.) On December 16, 2014, Holland sent an email
to Patricia Rice with Matthew Rice carbon copied stating:

4 In its second amended answer filed April 27, 2016, the Respond-
ent admitted the Sec. 2(13) agent status of Phillips. (GC Exhs. 1(g) and
1(o).) Neither Holland nor any other QAPF was alleged as a 2(13)
agent in the complaint. Like CSPs, QAPFs provide their services for
the Respondent through IBs.
Please review the below comments from the customer and the
email that was sent from your CSP. The customer stated
tracking shows delivered, but it was not, order was Lost in
Transit, so LIT options should have been sent (template
LITRO). Please be sure that CSP is reading and understand-
ing request and if there is any doubt he request chat assis-
tance. In addition, I have stated in many many emails and in
Matt and my PES, he MUST select call reasons for EVERY
email processed. This is still not happening. I need to hear
from him within 24 hours as to why he is not completing
this task.
(GC Exh. 34, emphasis in original.) Holland also completed
and sent to the Rices two quality assurance forms, where Hol-
land provided quality scores for Matthew Rice. (GC Exh. 35,
37.) He received a 98.14 percent score on one audit and 97.14
percent score on the other audit.
In addition, Phillips sent the results of 13 customer surveys
for Matthew Rice. (GC 30, 36, 52 to 62.) The surveys includ-
ed both positive and negative ratings. The bulk of the commu-
nication contained the same, pro forma text at the start. How-
ever, the introduction also states “[a]dded into this communica-
tion is feedback right from the Arise staff.” That “Arise feed-
back” included:
• Based on the customer’s comments the call will be re-
viewed and additional feedback may be provided by the
QA PF.
• The comment is not related to the CSP that handled the
transaction.
• Positive OSAT Survey! Thank you!
• Not enough information available to provide feedback.
Additional feedback may be provided by the QA PF.
In January 2015, the Respondent decided not to renew the
SOW under which Matthew Rice provided customer service for
Barnes & Noble. Phillips emailed Patricia Rice and explained:
The new Barnes and Noble SOW was not offered to your In-
dependent Business for Matt Rice due to overall poor feed-
back from the customer satisfaction surveys [as] well as over-
all poor quality. These were addressed through multiple feed-
back communications. The quality Performance Facilitator
also made several attempts to enhance. Matt unfortunately
did not implement/change the behaviors and show the needed
improvement in quality to continue servicing the program.
(GC Exh. 6.)
E The FLSA Class Action
The Respondent requires all of its CSPs to execute the waiv-
er agreement before they can perform customer service work
for Arise clients. The Respondent drafted the agreement and
maintains it on its website. That agreement states in relevant
part:
CLASS ACTION WAIVER. By signing this Agreement, all
parties waive their right to commence, to become a party to,
or to remain a participant in, any group, representative, class,
collective, or hybrid class/collective action in any court
against one or more other parties to this Agreement, Arise or
6 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
any client of Arise. Further, the parties waive their right to
commence, to become a party to, or to remain a participant in,
any group, representative, class, collective, or hybrid
class/collective action claim in arbitration or any other forum
against one or more other parties to this Agreement, Arise or
any client of Arise. The parties agree that any claim by or
against any other party to this Agreement shall be heard in ar-
bitration without consolidation of such claim with any other
person or entity’s claim. All parties agree that this Agreement
does not limit any party’s right to initiate an action in state or
federal court challenging the enforceability of the group, rep-
resentative, class, collective, or hybrid action waiver set forth
herein. If Client Support Professional chooses to exercise that
right, Company will not retaliate against Client Support Pro-
fessional for doing so. Company reserves the right to oppose
such a challenge to enforcement of this Agreement. The par-
ties further agree that nothing in this Agreement precludes any
party from participating in proceedings to adjudicate unfair
labor practice charges before the National Labor Relations
Board, including without limitation charges addressing the en-
forcement of the group, representative, class, collective, or
hybrid action waiver set forth herein.
(GC Exh. 5.) The waiver agreement also includes that the Re-
spondent and CSP “acknowledge and agree that Arise and any
client of Arise are third party beneficiaries of this Agreement
and any of them jointly or severally shall have the right to en-
force this Agreement.” Finally, the agreement states that “Cli-
ent Support Professional is not an employee of Arise Virtual
Solutions Inc. (“Arise”) or any client of Arise.” Matthew Rice
signed this agreement on January 16, 2014.
On December 30, 2013, plaintiff Heather Steele filed a class
action complaint against the Respondent with a claim under the
Fair Labor Standards Act (FLSA). Heather Steele et al. v.
Arise Virtual Solutions, Inc., Case 13–CV–62823, U.S. District
Court for the Southern District of Florida. (GC Exh. 41.) On
November 3, 2014, Matthew Rice signed an opt-in consent
form to join the class action. (GC Exh. 39.) On November 18,
2014, the Respondent’s counsel, Adam KohSweeney, emailed
one of the plaintiffs’ attorneys, Jill Kahn, and informed her that
Rice had signed the waiver agreement. (GC Exh. 28.) On No-
vember 19, 2014, Kahn advised KohSweeney that Rice’s opt-in
consent form would be withdrawn. On December 5, 2014, the
plaintiff’s counsel filed a notice of withdrawal of Rice’s opt-in
consent form.5 (GC Exh. 40.)
Analysis
1. IS CCS A NECESSARY PARTY TO THIS CASE?
Before the substantive issues can be analyzed, a preliminary
matter must be addressed. In its brief, the Respondent states:
“Arise maintains its position as argued in its Motion to Dismiss
for Failure to Join a Required Party, dated June 15, 2015, that

5 I take judicial notice of the public civil docket for this case. It fur-
ther shows that the district court issued an order compelling arbitration
of the plaintiffs’ claims on February 25, 2015. Pursuant to a stipulation
of dismissal entered into by the parties, the district court dismissed the
case with prejudice on October 29, 2015. Thus, the case is closed.
this matter cannot be resolved without CCS as a party respond-
ent because CCS is a necessary party to this action, given that
CCS and only CCS has a contractual relationship with Mr.
Rice.” The motion the Respondent references is one it filed
with the Board, pursuant to Federal Rule of Civil Procedure 19.
On October 29, 2015, the Board denied the motion, noting the
Respondent “failed to establish that there are no genuine issues
of material fact regarding its assertion that joinder of [CCS] is
necessary in this case.”
At the hearing, the Respondent made no similar motion to
dismiss or argument to me that joinder of CCS was necessary
before the case proceeded. Other than the above-quoted text,
the Respondent also makes no further argument in its brief as to
why joinder of CCS is necessary to this case. Nonetheless, I
will briefly address the Respondent’s contention.
The Board’s Rules and Regulations do not address, or re-
quire, application of the Federal Rules of Civil Procedure to
Board proceedings. In addition, and citing to the U.S. Supreme
Court’s decision in National Licorice Co. v. NLRB, 309 U.S.
350, 363 (1940), the Board has suggested that no need exists
for the traditional rules governing joinder of parties in private
litigation to be applied in Board unfair labor practice cases
addressing enforcement of public rights. Expert Electric, Inc.,
347 NLRB 18, 19 (2006).
Even if FRCP 19 applied, the joinder of CCS is not neces-
sary to this case. In its motion, the Respondent relied upon
Rule 19(a). That rule requires a party to be joined if, “in that
person’s absence, the court or other tribunal cannot accord
complete relief among existing parties.” The Respondent ar-
gues that the waiver agreement at issue in this case is between
CCS and Matthew Rice. The Respondent is not a party to that
agreement. Thus, the argument goes, if the complaint allega-
tions in this case are found meritorious, the Respondent would
not have the ability to comply with an order requiring it to re-
scind all such agreements signed by CSPs. However, the Re-
spondent forgets the unilateral rights it reserved for itself in the
MSAs. The Respondent can unilaterally amend the MSA, or
any SOW thereunder. It also can require IBs to have their
CSPs execute any documents Arise dictates. Thus, the Re-
spondent can accord complete relief in this case, if necessary,
by exercising those unilateral rights.
Accordingly, I conclude that FRCP 19 is not applicable to
this case and, even if it were, CCS is not a necessary party.
II. THE EMPLOYMENT STATUS OF CLIENT SUPPORT PROFESSIONALS
As indicated earlier, this case turns on the employment status
of CSPs, including Matthew Rice. The General Counsel con-
tends that CSPs are employees of the Respondent covered by
the Act during the relevant period when the alleged unfair labor
practices occurred. The Respondent argues that Rice was not
an employee of Arise, but instead worked either as an employee
or independent contractor of CCS.
Section 2(3) of the Act excludes from the definition of a
covered “employee” any individual having the status of an
independent contractor. 29 U.S.C. § 152(3). The party assert-
ing independent-contractor status bears the burden of proof on
that issue. BKN, Inc., 333 NLRB 143, 144 (2001). In NLRB v.
United Insurance Co. of America, 390 U.S. 254 (1968), the
ARISE VIRTUAL SOLUTIONS, INC. 7
Supreme Court held that independent-contractor status must be
evaluated in light of the pertinent common-law agency princi-
ples. The non-exhaustive list of those factors is set forth in the
Restatement (Second) of Agency § 220 (1958):
(a) The extent of control which, by the agreement, the mas-
ter may exercise over the details of the work.
(b) Whether or not the one employed is engaged in a distinct
occupation or business.
(c) The kind of occupation, with reference to whether, in the
locality, the work is usually done under the direction of
the employer or by a specialist without supervision.
(d) The skill required in the particular occupation.
(e) Whether the employer or the workman supplies the in-
strumentalities, tools, and the place of work for the per-
son doing the work.
(f) The length of time for which the person is employed.
(g) The method of payment, whether by the time or by the
job.
(h) Whether or not the work is part of the regular business of
the employer.
(i) Whether or not the parties believe they are creating the
relation of master and servant.
(j) Whether the principal is or is not in the business.
In FedEx Home Delivery, 361 NLRB 610 (2014), the Board
reaffirmed the use of these factors. It also detailed and refined
the separate factor of whether the individual was, in fact, ren-
dering services as an independent business. Evaluation of this
factor includes determining whether the individual has a signif-
icant actual (as opposed to merely theoretical) entrepreneurial
opportunity for gain or loss; a realistic ability to work for other
companies; a proprietary or ownership interest in the work; and
an ability to control important business decisions such as
scheduling, hiring, selection, and assignment of employees,
purchase and use of equipment, and commitment of capital. No
one factor is decisive.6
A. The Extent of Control the Respondent Exercises Over
the Work of CSPs
The Respondent requires anyone who wishes to become a
CSP to pass a background check and complete the CSP 101
training course. That course involves detailed instruction on
how to perform customer service work and how to use the
Company’s website to access Arise client systems. In order to

6 The Respondent spent a great deal of time at the hearing and in its
brief presenting evidence and arguing that CCS, and presumably other
IBs, have an independent contractor relationship with the Respondent.
The implication is that CSPs also must be independent contractors in
relation to the Respondent, if the IBs they work with are in that posi-
tion. In light of the applicable legal standard discussed above, I do not
find the relationship between IBs and the Respondent to be relevant to
this case. The only issue presented by the General Counsel’s complaint
is whether CSPs are employees of the Respondent. That relationship
must be evaluated by applying each of the common-law agency factors.
I do not agree that, if CCS were found to be an independent contractor
as to the Respondent, that same status automatically would be con-
veyed upon Matthew Rice. See Porter Drywall, Inc., 362 NLRB No. 6
(2015) (analyzing independently the question of whether crew leaders
and crew members were employees).
work for a specific client, CSPs also have to take and pass a
client-specific training course provided through the Arise por-
tal. In those classes, CSPs are provided with a script and other
requirements to respond to customer service inquiries. Thus,
the Respondent trains, tests, and approves individuals to be-
come both CSPs and to provide service to a particular client.
This is indicative of employee status. Slay Transportation Co.,
331 NLRB 1292, 1293–1294 (2000).
As to work schedules, the record evidence is mixed. CSPs
alone select the work opportunities and hours that they wish to
work. They also retain the right to release or swap hours with-
out the Respondent’s approval, up to 2 days before the sched-
uled work shift.
However, as a practical matter, the Company imposes a
number of restrictions on these rights. Each work interval is
only 30 minutes long. An individual seeking to work a regular,
full-time work schedule would have to select 80 work intervals
for 1 week. But the Respondent releases the available work
hours to all CSPs at the same time, only once per week. The
Company also permits top performing CSPs to select work
shifts first. These limitations had a foreseeable impact on Mat-
thew Rice’s work schedule. He typically logged only 20 to 30
hours per week, with intermittent work hours on many of his
work days.
Through SOWs, the Respondent also imposes work hour re-
quirements for CSPs. Matthew Rice had to work at least 13½
hours per week total, pursuant to the two Barnes & Noble
SOWs from November 2014 to January 2015. The Respondent
required that Rice achieve a commitment adherence of 80 to 85
percent of the work intervals he initially scheduled. Thus, the
Respondent imposes limits on the ability of CSPs to cancel a
work interval inside of 48 hours of its start. The Respondent
reserved the right to terminate the SOW, and Rice’s ability to
work under it, if either of these performance metrics went un-
fulfilled.
The Respondent’s retention of significant control over CSPs’
work hours favors employee status. Lancaster Symphony Or-
chestra, 357 NLRB 1761, 1763–1764 (2011).
On balance then, the extent of control factor weighs in favor
of employee status.
B. Whether CSPs are Engaged in a Distinct Occupation
or Business
CSPs, including Matthew Rice, are not doing business in the
name of Arise Virtual Solutions. When responding to inquiries,
CSPs identify themselves as working for the Arise client for
whom they provide customer service. This would support a
finding that CSPs were employees of Arise clients, not the Re-
spondent.
On the other hand, CSPs lack the infrastructure and support
to operate as a separate entity, absent their affiliation with the
Respondent. Moreover, the services provided by CSPs are
essential to the Respondent’s operations. Approximately 85
percent of the Respondent’s revenue is derived from clients
who contract for customer service provided by CSPs. While
CSPs do not have an exclusive working relationship with the
Respondent, the sporadic nature of their work hours on certain
days would make it difficult for them to obtain other employ-
8 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ment. In any event, the ability to work for multiple employers
does not automatically render an individual an independent
contractor. Sisters’ Camelot, 363 NLRB No. 13, slip op. at 2
(2015).
Overall, then, I conclude this factor is neutral.
C. Whether the Work is Usually Done Under the Direction of
the Employer or by a Specialist Without Supervision
While CSPs are not subject to continuous supervision of
their work duties, the Respondent directs their performance via
the enforcement of performance metrics and tracking mecha-
nisms. The SOWs require CSPs to attain a minimum level of
performance in every requirement contained therein. The Re-
spondent alone determines the work schedule commitment
adherence requirement. It enforced that metric, as well as in-
tervals serviced and average handle time, through the monitor-
ing capabilities of its platform. For quality scores and customer
satisfaction, the Respondent utilized members of its client re-
sults team to audit CSP performance and to insure they were
meeting the performance requirements.
The Respondent argues that it does not control the means by
which CSPs meet their performance metrics, but only the right
to control the ends to be achieved. However, this assertion is
contradicted by the specific feedback the client results team
provided to Matthew Rice. That feedback was subjective, spe-
cific, and went beyond merely reporting results. Matthew Rice
repeatedly was advised on what he needed to do to improve his
work, including using proper greetings and grammar, adhering
to clients’ template responses, and utilizing chat PFs. QAPF
Holland even demanded that Matthew Rice contact her directly
and explain why he was not performing a certain task.
The Company reserves and exercises the right to terminate
SOWs based on a lack of performance by CSPs. Once an SOW
is terminated, CSPs lose the ability to continue providing ser-
vice to a particular Arise client. Here, the Respondent termi-
nated the SOW under which Matthew Rice performed customer
service for Barnes & Noble, based on his lack of performance.
As a practical matter, the Respondent’s right in this regard is a
disciplinary measure.
To be sure, the Respondent does not direct the work of CSPs
as it is being performed. However, chat PFs have the ability to
actively monitor CSP calls and may advise QAPFs about per-
formance issues the CSPs are having. CSPs also are not sub-
jected to any personnel policies or disciplinary system of the
Respondent.
At the end of the day, I conclude this factor favors employee
status. See Sisters’ Camelot, supra, slip op. at 3 (finding that
significant level of oversight favors employee status); FedEx,
supra, 361 NLRB 610, 622 (finding direction factor favors
employee status when the employer requires strict adherence to
company guidelines, and closely tracks, evaluates and disci-
plines drivers).
D. Skill Required in the Occupation
The Respondent does not require CSPs to have a minimum
level of education or any particular skills. Matthew Rice had
obtained a GED, but did not have any work experience when he
became a CSP. I reject the Company’s contention that CSPs
had specialized skills related to the particular client they were
servicing. All of the skills required to perform work as a CSP
are obtained through training the Respondent provides, through
the CSP 101 and client certification courses.
Accordingly, this factor supports a finding of employee sta-
tus. FedEx, supra, slip op. at 13 (where the employer did not
require drivers to have any skills and provided 2 weeks of train-
ing, factor supported employee status).
E. Whether the Employer or Individual Supplies
Instrumentalities, Tools, and Place of Work
The most expensive instrumentality of work in this case is
the Arise platform. The Respondent spends approximately
$500,000 to $1 million per year to maintain it. However, the
Company charges IBs a biweekly fee for each CSP who pro-
vides service through the website. The Respondent deducts
that fee from the payment it makes to IBs for the work CSPs
perform. In doing so, the Respondent removes that sum from
the potential wage payment to a CSP. Effectively, then, the
CSP is paying the platform access fee. This is indicative of
independent contractor status. City Cab Co. of Orlando, 285
NLRB 1191, 1194 (1987) (payment of lease or rental fees over
a period of time results in a substantial investment on the part
of the payee, supporting independent contractor status).
As to the other tools of work, CSPs are responsible for ob-
taining and paying for the equipment and training necessary to
respond to customer service inquiries through the website. The
Respondent also does not provide CSPs with a physical loca-
tion to work. Matthew Rice worked out of his home.
Accordingly, this factor favors independent contractor status.
F. Length of Time for which the Individual is Employed
The Respondent’s SOWs through which CSPs provide cus-
tomer service typically last only 90 days. The SOWs under
which Matthew Rice performed customer service for Barnes &
Noble ran for 60 days. Neither the Respondent nor the CSP is
required to renew an SOW after it expires. While these agree-
ments were of short duration, it is apparent that the Respondent
routinely renews SOWs for an indefinite period, so long as
CSPs meet the required performance metrics. (GC Exhs. 7 and
8.)
As a result, I find this factor neutral. Sisters’ Camelot, supra,
slip op. at 4 (factor found inconclusive where canvassers’ po-
tentially long-term relationship with employer conflicted with
their discretion over whether and how much to work).
G. Method of Payment
The wages paid to CSPs for work performed through the
Arise platform are determined by the IBOs, not the Respondent.
The Company does not withhold taxes when making payments
to IBs and reports those payments on 1099 forms. The Re-
spondent also does not pay for any benefits for CSPs, including
workers’ compensation, unemployment, or disability benefits.
Here, Patricia Rice decided she would pass on the entire pay-
ment from the Respondent for services rendered to each family
member, including her son, who performed those services.
The Respondent also does not guarantee any minimum wage
rate for CSPs. SOWs contain the amount of service revenue
that the Respondent will pay to IBs for the work performed.
ARISE VIRTUAL SOLUTIONS, INC. 9
For the Barnes & Noble SOW under which Matthew Rice
worked, the Respondent guaranteed a rate of no less than $4 per
service interval, or $8 per hour, multiplied by the total number
of intervals serviced during the invoice period. The level of
service revenue provided has at least some impact on the wage
rate paid to a CSP. However, it does not establish a minimum
wage rate, because IBs retain the discretion to pay CSPs what-
ever they may choose.
On the other hand, CSPs are not subjected to any genuine fi-
nancial risk, except for the minimal expenditure for equipment
necessary to perform the work. CSPs also do not have any
potential for entrepreneurial gain, unless they choose to work
simultaneously as an IBO. The only method CSPs have to
increase compensation is to work more hours.
On balance, I conclude this factor supports a finding of inde-
pendent contractor status. Argix Direct, Inc., 343 NLRB 1017,
1021 (2004) (lack of hourly pay rate or salary, along with no
guaranteed income, favored independent contractor status);
Dial-a-Mattress Operating Corp., 326 NLRB 884, 891–892
(1998) (same).
H. Whether or not the Work is Part of the Regular Business
of the Employer
This factor presents one of the more interesting questions in
cases such as this one involving a company which has created
and maintains an Internet platform through which services are
provided to customers: what exactly is the company’s busi-
ness? The Respondent insists it is nothing more than a technol-
ogy company that provides access to software and telephony
infrastructure. The General Counsel counters that, irrespective
of how the Respondent engages in business, the Company’s
core function is providing call center services to its clients.
The perspective of the Respondent’s clients provides the an-
swer to this question. Barnes & Noble, Disney, and Sears pay
the Respondent to obtain call center services from CSPs, not to
access and use the Company’s platform. The description of the
Respondent’s business in the MSA is indicative of this interpre-
tation. That agreement states the Respondent “is a virtual con-
tact center that provides customer care solutions to its corporate
clients using customer service representatives . . . who provide
their [CSP] Services from remote locations . . .” (GX Exh. 2, p.
1.) The “customer care solutions” are responses to customer
service inquiries through the Respondent’s website.
Following the money further supports this finding. The fees
paid by the Respondent’s clients for these services generate 85
percent of the Company’s total revenue. Only a small portion,
then, is derived from the fees paid by IBs to access the Arise
platform. Without the revenue derived from the CSPs’ work,
the Respondent essentially would be out of business.
Accordingly, I find that, at its core, the Respondent’s regular
business is providing call center services through its website
using CSPs. Thus, this factor favors employee status. Sisters’
Camelot, 363 NLRB No. 13, slip op. at 4 (fact that canvassers
were responsible for 90 percent of organization’s revenue sup-
ported finding of employee status).
I. Whether or not the Parties Believe they are Creating
an Independent-Contractor Relationship
The Respondent has taken multiple steps to frame CSPs as
independent contractors. CSPs execute the waiver agreement,
which states CSPs are not employees of the Respondent or its
clients. CSPs also have to check a box when registering as a
user on the Respondent’s website acknowledging that they
understood they were independent contractors. However, CSPs
have no right to negotiate over this term. The Respondent re-
quires CSPs to take each of these steps in order to perform
customer service work. In any event, a written agreement de-
fining a relationship as that of an independent contractor is not
dispositive.
Matthew Rice testified credibly that he viewed the Respond-
ent—not his mother—as his employer and the people he inter-
acted with from Arise as supervisors. In addition, Rice and
other CSPs asserted FLSA claims in Federal court premised on
the belief that CSPs are employees, not independent contrac-
tors.
On the whole, I conclude this factor is neutral. FedEx Home
Delivery, 361 NLRB 610, 623.
J. Whether the Principal is or is not in the Business
As previously noted, the Respondent’s regular business is to
provide call center services to its clients. CSPs are the individ-
uals providing those services through the Arise platform. Thus,
the Respondent is in the same business as the CSPs. This factor
likewise supports employee status. Porter Drywall, 362 NLRB
No. 6, slip op. at 5 (2015).
K. Whether the Evidence Tends to Show that the Individual is,
in Fact, Rendering Services as an Independent Business
CSPs do not have a significant actual entrepreneurial oppor-
tunity for gain or loss through their work. An entrepreneur is
someone who initiates and assumes the financial risks and ac-
cepts the rewards of a new enterprise and who usually under-
takes its management.7 CSPs do not match that definition.
They do not operate a business. Their work does not involve
risk. The only ability they have to affect their earnings is to
work more hours or negotiate a higher wage rate with their
IBOs. Neither is indicative of entrepreneurial opportunity.
While CSPs have the ability to work for other companies,
that ability is somewhat unrealistic. The Respondent requires
CSPs to work a minimum number of hours under each SOW.
The release of all work hours for a week at the same time and
the 30-minute work interval are restrictions imposed by the
Respondent that produce intermittent work schedules and unu-
sual working hours. This makes it difficult for CSPs to service
more than one Arise client at a time or to work at any other job.
CSPs have no ownership interest in their customer service
work.
Finally, CSPs do not have the ability to control important
business decisions. CSPs do not hire or select employees.
Although CSPs must purchase equipment, the cost is minimal.
Moreover, the Respondent dictates the specific equipment
which must be purchased and used to perform the work. CSPs

7 Entrepreneur, Black’s Law Dictionary (10th ed. 2014).
10 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
do not otherwise invest capital that could return income. The
Respondent set all of the terms of CSP work, through either its
agreements with IBs or agreements it requires IBs and CSPs to
execute. The Respondent can change those terms unilaterally
pursuant to the terms of the MSAs.
For all these reasons, I find that CSPs do not, in fact, render
services as an independent business. This factor heavily
weighs in favor of employee status. Sisters’ Camelot, supra,
slip op. at 5 (canvassers’ lack of control over important busi-
ness decisions and lack of proprietary interest or monetary in-
vestment in their work favored employee status); cf. Porter
Drywall, supra, slip op. at 5 (crew leaders’ financial interest in
their work, opportunities for gain, and control over important
business decisions evidenced independent contractor status).
L. Conclusion on Employee Status
The party asserting an individual is an independent contrac-
tor, here the Respondent, has the burden of proof. Based on the
analysis of the traditional common-law factors and the Board’s
independent business factor as described above, I conclude that
the Respondent has failed to carry that burden. The majority of
the factors support a finding of employee status. These include
that the Respondent exercises control over the details of the
CSPs’ work; CSPs are not rendering services as an independent
business; the Respondent is in the business of providing call
center services and such services are part of its regular busi-
ness; CSPs are not required to have any special skills; and the
CSPs’ work is being directed by the Respondent. I find that
CSPs not doing business in the name of the Respondent, the
length of CSPs’ employment, and the parties’ belief as to the
relationship created are neutral factors. The factors supporting
independent contractor status do not outweigh those that favor
employee status. Those factors include that CSPs provide their
own instrumentalities, tools and place of work and are not paid
by the Respondent.
The Respondent’s business structure as to CSPs is an elabo-
rate construct designed to portray the relationship between the
two as that of an independent contractor. However, that con-
struct cannot hide the reality of the relationship, after evaluat-
ing the traditional common-law factors of agency. I conclude
that customer service professionals, including Matthew Rice,
are statutory employees of the Respondent and not independent
contractors.
II THE MURPHY OIL ALLEGATIONS
The General Counsel’s complaint alleges the Respondent vi-
olated Section 8(a)(1) by maintaining the class action waiver
provision in the Acknowledgment and Waiver Agreement;
requiring employees to sign the waiver agreement as a condi-
tion of employment; and enforcing the waiver agreement
against Matthew Rice by requesting that Rice withdraw his opt-
in consent form for the Heather Steele FLSA class action com-
plaint.
In D. R. Horton, 357 NLRB 2277 (2012), enf. denied in rel-
evant part 737 F.3d 344 (5th Cir. 2013), petition for rehearing
en banc denied (5th Cir. No. 12-60031, April 16, 2014), the
Board held that an employer violates Section 8(a)(1) of the Act
when it requires employees covered by the Act, as a condition
of employment, to sign an agreement that precludes them from
filing joint, class, or collective claims addressing their wages,
hours, or other working conditions against an employer in any
forum, arbitral or judicial. The Board reaffirmed this principle
in Murphy Oil USA, Inc., 361 NLRB 774 (2014), enf. denied in
relevant part 808 F.3d 1013 (5th Cir. 2015). The Board also
has ruled that an employer commits a further violation of Sec-
tion 8(a)(1) if it seeks to enforce such an agreement by moving
to strike the class and collective allegations in employees’
work-related lawsuit or by moving to dismiss employees’ col-
lective court action and compel them to arbitrate their mutual,
work-related claims individually. Cowabunga, Inc., 363 NLRB
No. 133, slip op. at 3 (2016); Convergys Corp., 363 NLRB No.
51, slip op. at 2 (2015); Murphy Oil, supra, slip op. at 19.
The Respondent’s conduct here falls squarely into the range
prohibited by D. R. Horton and Murphy Oil. In order to per-
form any work for the Respondent under an SOW, CSPs are
required to sign the waiver agreement. The Respondent drafted
and maintains this agreement, and CSPs sign it, on the Arise
platform. The agreement includes language giving the Re-
spondent the right to enforce the class action waiver provision.
Matthew Rice engaged in protected, concerted activity by filing
the opt-in consent form to join the Heather Steele FLSA class
action lawsuit. The Respondent then enforced the waiver
agreement by requesting and obtaining Matthew Rice’s with-
drawal of his opt-in consent form.
To defend its conduct, the Respondent first argues that the
saving provisions in its class waiver render it lawful. As de-
tailed above, the waiver includes language permitting a party to
file unfair labor practice charges with the Board. It also in-
cludes language allowing a party to challenge the enforceability
of the waiver in state or Federal court. However, the Board has
rejected the argument that waivers with such savings provisions
do not violate Section 8(a)(1). See Multiband EC, Inc., 363
NLRB No. 100, slip op. at 3 fn. 6 (2016); SolarCity Corp., 363
NLRB No. 83, slip op. at 2–4 (2015).
The Respondent next argues that the Board’s position in D.
R. Horton and Murphy Oil has been “unabashedly” rejected by
the U.S. Court of Appeals for the 5th Circuit. The Respondent
also notes that a different court of appeals held, in Walthour v.
Chipio Windshield Repair, 745 F.3d 1326 (11th Cir. 2014), that
a provision in an arbitration agreement which waived a party’s
ability to bring a collective action was enforceable under the
Federal Arbitration Act. Of course, an administrative law
judge’s duty is to apply established Board precedent which the
U.S. Supreme Court has not reversed, even where the Board
precedent conflicts with a court of appeals. Austin Fire Equip-
ment, LLC, 360 NLRB 1176, 1176 at fn. 6 (2014); Arrow Flint
Electric Co., 321 NLRB 1208 (1996). In any event, the courts
of appeals are now split on the Board’s D. R. Horton decision.
The 7th Circuit Court of Appeals recently upheld the Board’s
view and found that an arbitration provision prohibiting FLSA
class actions and requiring employees to bring such claims in
individual arbitration violated the Act. Lewis v. Epic Systems
Corp., ___ F.3d ___, 2016 WL 3029464 (7th Cir. 2016). Ac-
cordingly, I reject this argument.
ARISE VIRTUAL SOLUTIONS, INC. 11
As a result, I conclude that the Respondent has violated the
Act in all the manners alleged in the General Counsel’s com-
plaint.
CONCLUSIONS OF LAW
1. The Respondent, Arise Virtual Solutions, Inc., is an em-
ployer engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
2. On or about November 13, 2014, Matthew Rice engaged
in concerted activities for the purpose of mutual aid and protec-
tion with other employees of the Respondent by filing an opt-in
consent form as a plaintiff in the class action complaint in
Heather Steele et. al v. Arise Virtual Solutions, Inc., Case 13-V-
62823, in the U.S. District Court for the Southern District of
Florida.
3. The Respondent has violated Section 8(a)(1) by maintain-
ing the class action waiver provision in its Acknowledgement
and Waiver Agreement; requiring employees to sign the waiver
agreement as a condition of employment; and enforcing the
waiver agreement against Matthew Rice by requesting that Rice
withdraw his consent form by which he opted into the Heather
Steele FLSA class action complaint.
4. The above unfair labor practices affect commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
REMEDY
Having found that the Respondent engaged in certain unfair
labor practices, I find that it must be ordered to cease and desist
and to take certain affirmative action designed to effectuate the
policies of the Act. Consistent with the Board’s usual practices
in cases involving unlawful class action waivers and litigation,
I shall order the Respondent to reimburse Matthew Rice for all
reasonable expenses and legal fees, with interest,8 incurred in
opposing the Respondent’s unlawful efforts to enforce the class
action waiver by requesting that Rice withdraw his opt-in con-
sent form in the Heather Steele FLSA class action. See Mur-
phy Oil, slip op. at 21; Bill Johnson’s Restaurants v. NLRB, 461
U.S. 731, 747 (1983). I also shall order the Respondent to re-
scind or revise the class action waiver and to notify employees
that it has done so.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended9
ORDER
The Respondent, Arise Virtual Solutions, Inc., Miramar,
Florida, its officers, agents, successors, and assigns, shall
1. Cease and desist from

8 Interest is to be computed in the manner prescribed in New Hori-
zons, 283 NLRB 1173 (1987), compounded daily as prescribed in Ken-
tucky River Medical Center, 356 NLRB 6 (2010). See Teamsters Local
776 (Rite Aid), 305 NLRB 832, 835 fn. 10 (1991) (“[I]n make-whole
orders for suits maintained in violation of the Act, it is appropriate and
necessary to award interest on litigation expenses.”), enfd. 973 F.2d
230 (3d Cir. 1992), cert. denied 507 U.S. 959 (1993).
9 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided in Sec. 102.48 of the Rules, be adopt-
ed by the Board and all objections to them shall be deemed waived for
all purposes.
(a) Maintaining and/or enforcing any agreement or rule that
requires employees, as condition of employment, to waive the
right to maintain class or collective actions in all forums,
whether arbitral or judicial.
(b) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guaran-
teed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) Rescind the Acknowledgment and Waiver Agreement, or
revise the agreement to make clear to employees that the
agreement does not constitute a waiver of employees’ rights to
file or maintain employment-related joint, class, or collective
actions.
(b) Notify all current and former employees who were re-
quired to sign, or otherwise agree to, the Acknowledgement and
Waiver Agreement that the agreement has been rescinded or
revised and, if revised, provide them a copy of the revised
agreement.
(c) In the manner set forth in the remedy section of this de-
cision, reimburse Matthew Rice for any reasonable attorneys’
fees and litigation expenses that he incurred in opposing the
Respondent’s unlawful efforts to enforce the Acknowledge-
ment and Waiver Agreement.
(d) Within 14 days after service by the Region, post at its
facility in Miramar, Florida, copies of the attached notice
marked “Appendix.”10 Copies of the notice, on forms provided
by the Regional Director for Region 12, after being signed by
the Respondent’s authorized representative, shall be posted by
the Respondent and maintained for 60 days in conspicuous
places including all places were notices to employees are cus-
tomarily posted. In addition to physical posting of paper notic-
es, notices shall be distributed electronically, such as by email,
posting on an intranet or Internet site, and/or other electronic
means, if the Respondent customarily communicates with its
employees by such means. Reasonable steps shall be taken by
the Respondent to ensure that the notices are not altered, de-
faced, or covered by any other material. In the event that, dur-
ing the pendency of these proceedings, the Respondent has
gone out of business or closed the facilities involved in these
proceedings, the Respondent shall duplicate and mail, at its
own expense, a copy of the notice to all current employees and
former employees employed by the Respondent at any time
since January 16, 2014.
(e) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Regional Director attesting to the
steps the Respondent has taken to comply.
Dated, Washington, D.C., August 12, 2016

10 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
12 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we violated
Federal labor law and has ordered us to post and obey this no-
tice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your be-
half
Act together with other employees for your benefit and
protection
Choose not to engage in any of these protected activi-
ties.
WE WILL NOT maintain and/or enforce an agreement or rule
that requires you, as a condition of employment, to waive the
right to maintain class or collective actions in all forums,
whether arbitral or judicial.
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce you in the exercise of the rights guaranteed
you by Section 7 of the Act.
WE WILL rescind the Acknowledgment and Waiver Agree-
ment (Waiver Agreement) or revise it to make clear that the
Waiver Agreement does not constitute a waiver of employees’
rights to maintain employment-related joint, class, or collective
actions.
WE WILL notify you that the Waiver Agreement has been re-
scinded or revised and, if revised, provide you with a copy of
the revised Waiver Agreement.
WE WILL reimburse Matthew Rice for any reasonable attor-
neys’ fees and litigation expenses he may have incurred in op-
posing our unlawful efforts to enforce the Waiver Agreement.
ARISE VIRTUAL SOLUTIONS, INC.
The Administrative Law Judge’s decision can be found at
www.nlrb.gov/case/12-CA-144223 or by using the QR code
below. Alternatively, you can obtain a copy of the decision
from the Executive Secretary, National Labor Relations Board,
1015 Half Street, S.E., Washington, D.C. 20570, or by calling
(202) 273–1940.