Richard Reibstein, co-head of Locke Lord’s Independent Contractor Misclassification and Compliance Practice, was quoted by Law360 on a Seventh Circuit ruling that found an independent contractor agreement's choice of law provision irrelevant to delivery drivers' misclassification suit. Reibstein notes the ruling shows companies can't always count on a choice of law provision to dodge a challenging legal climate. "One key lesson from this Seventh Circuit decision is, don't assume your choice of law provisions will govern in an independent contractor misclassification lawsuit," he said. “The court's decision that Illinois law applies is especially significant, because Illinois is also one of the few states whose test for independent contractor status is extremely challenging to meet for many industries."
Reibstein added that choice of law clauses are common in independent contractor agreements and govern a claim that the other side violated the contract, but they usually don't apply to suits alleging that someone broke a state or local law, making it important for a company to enhance its independent contractor compliance in advance. "Companies that structure, document and implement their independent contractor relationships given the more challenging state laws that may apply are usually better off than companies that don't," he said.
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