ZP Better Together mandates arbitration, lays off organizing workers

ZP Better Together, a combination of subsidiaries ZVRS and Purple Communications, is the second-largest ASL Video Relay Service (VRS) provider in the United States. The Federal Communications Commission (FCC) funds VRS so that people who are Deaf and hard of hearing can use the service for free as required by the Americans with Disabilities Act. The company is owned by private equity firm Kinderhook Industries, which is in turn backed by a subsidiary of The Carlyle Group, the world’s third-largest private equity firm. 

ZP Better Together has a history of union busting and retaliation against interpreters who organize. Most recently, the company introduced mandatory arbitration after settling multiple expensive lawsuits with workers in California. 

Interpreters at call centers across California, Arizona, and Colorado unionized in 2012 with Communication Workers of America (CWA). In 2019, Purple Communications closed its call center in Corona, California and laid off 63 people. Later that year, the California state legislature passed a bill banning forced arbitration (the bill was later held preempted by a federal law), and further potential regulatory and legal action may have pushed the company to close its remaining call centers in the state in 2023.

In an NLRB decision issued in September 2020, the Board found significant violations of federal law at two other California call centers and ordered Purple Communications and their “successor and joint employer” ZVRS to cease and desist from dozens of behaviors, as well as affirmatively take significant actions to guarantee employees’ right to freedom of association. Workers at these California call centers belonged to CWA. ZP Better Together joined a wave of other tech companies in moving headquarters from Rocklin, California to Austin, Texas in 2021, laying off 41 workers. 

In 2023, the company settled two lawsuits totaling nearly $450,000 in payouts to California workers – in February, Purple settled with workers for $127,000 in back pay for unpaid sick time. The next month, the company announced its intention to pay $320,000 to settle a class-action lawsuit filed by California-based interpreters alleging wage theft and retaliation. By May 2023, ZP Better Together ended more operations in California, laying off 53 workers in Los Angeles and Riverside. The company appears to have ceased call center operations in the state in 2023 (neither ZVRS nor Purple appeared to have job postings for call centers based in the state as of September 2024).

Soon after the settlements, ZP Better Together introduced a Mutual Arbitration Agreement that would prevent workers from filing and winning these lawsuits. In October 2023, ZP Better Together requested that Minnesota employees sign a Mutual Arbitration Agreement, which required “any past, present, or future dispute, controversy, or claim between” employees and the company to “be resolved through binding arbitration.” Many employees refused to sign the agreement, recognizing how it would limit their rights. After introducing mandatory arbitration, ZP Better Together announced the closure of the Minnesota call centers in January 2024. Workers claimed the company notified them of the layoffs “hours before some employees had a scheduled meeting with Communications Workers of America to discuss unionizing,” while the company cited issues with “profitability.”

The ZP Better Together arbitration agreement requires using the American Arbitration Association (AAA) for all disputes. AAA is the largest arbitration provider in the country, with more than 7,500 arbitrators in its system. As of 2021, 88% of AAA’s arbitrators were white, and 78% identified as male. Despite being a non-profit, AAA has recently acquired for-profit online dispute resolution (ODR) platforms. Colin Rule, CEO of new AAA acquisition Resourceful Internet Solutions (RIS), believes that artificial intelligence could be used for “every aspect of dispute resolution from intake to management to making decisions and then enforcing the decisions.” If artificial intelligence models for arbitration use models as precedent in future rulings, they too will be largely skewed in favor of employers.

The Economic Policy Institute explains the arbitration process:

“The arbitrator convenes the hearing and usually begins by explaining that it is an informal proceeding not subject to formal rules of evidence or procedure.  Rather, he or she explains that the arbitrator’s role is to hear any evidence that either side wants to submit and then render a binding decision.  Instead of excluding inadmissible evidence based on objections from lawyers, the arbitrator will generally hear all the evidence and then decide how much weight to give it in reaching a decision.”

Arbitration clauses, which force dispute resolution into a private setting, live in the fine print of contracts that consumers and employees sign to access something a company has – consumers might sign a clause in order to create an account on a social media platform, and employees may be required to sign such a clause to complete their hiring process. 

Forced arbitration is a growing issue for workers according to the Department of Labor. Employers place mandatory arbitration clauses in employee contracts, ensuring that labor disputes around things such as wage theft, retaliation, and harassment can only be settled through a private arbitrator. This serves to “force claims into an employer-controlled system and keep them out of federal court,” preventing workers from filing lawsuits or pursuing other means of restitution. Despite employer attempts to limit workers’ options, the Department of Labor pledges to “vigorously prosecute violations at workplaces where workers are bound by mandatory arbitration.” In 2020, workers only won 1.6% of arbitration cases against their employers.

ZP Better Together and private equity owners Kinderhook and Carlyle may have to answer to concerned investors if they continue violating workers’ rights. A new workforce management policy from New York State Common Retirement Fund discourages private equity firms from using mandatory arbitration and union busting. The Biden Administration supported these along with other labor standards for private equity firms at an April 2024 White House convening. Comptroller Thomas P. DiNapoli, the sole trustee of NYS Common, warned that “if the fund has significant concerns” about a firm’s labor practices, “it could impact its decision about a new investment.”