New York Team's Representation of Client for Compliance With Independent Contractor Laws Results in Cut Off of Liability Despite Prior Adverse Ruling

New York’s Richard Reibstein and Janet Barsky obtained a determination in favor of their Brooklyn, New York, client after a two-day hearing before an administrative law judge (ALJ) for the New York State Department of Labor. The ALJ held that therapists who provided services to the client’s and some of the therapists’ own customers at the client’s facilities were independent contractors and not employees for purposes of the New York unemployment insurance law. The case was novel insofar as the client had previously received an adverse determination six years earlier by another ALJ with regard to its classification of the therapists. The client then retained Reibstein and Barsky of Locke Lord, who advised how to restructure, re-document and re-implement its relationships with the therapists to achieve compliance with state and federal independent contractor laws. The second ALJ found that, even though the first ALJ’s decision had been affirmed by the New York Unemployment Insurance Appeal Board, the client’s willingness, after the first ALJ’s decision, to make and implement changes to its independent contractor relationships to elevate its level of compliance overcame the prior ruling against it, cut off all liability from the effective date of the changes, and validated that its independent contractor relationships have since complied with applicable law. The Commissioner of Labor appealed to the Unemployment Insurance Appeal Board, which affirmed the ALJ’s decision in favor of the client. No further appeal was filed by the Commissioner.
Posted on April 10, 2020 (updated April 21, 2021)