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Yoga Instructors Can Be Independent Contractors, Says NY Court of Appeals

Earlier this week, the New York State Court of Appeals in Yoga Vida NYC, Inc. v. Commissioner of Labor., No. 130 (N.Y. Oct. 25, 2016), issued a rare decision concerning an unemployment determination, reversing the Appellate Division and concluding that the employer yoga studio did not exercise sufficient control over certain of its instructors to create an employment relationship.

Yoga Vida, a yoga studio in Manhattan, offers classes taught by both staff instructors, classified as employees, and non-staff instructors, classified as independent contractors.  The State’s Unemployment Insurance Appeal Board held that the non-staff instructors were misclassified as independent contractors, rendering Yoga Vida liable for additional unemployment contributions.  Yoga Vida appealed to the Appellate Division, which affirmed the determination of the UIAB.  The Court of Appeals reversed, finding that the non-staff instructors were not employees because Yoga Vida did not exercise sufficient control “over the results produced and the means used to achieve the results.”

In support of its conclusion, the Court found that:

  • The instructors made their own schedules and chose how they were paid (either hourly or on a percentage basis);
  • Unlike other instructors, who were paid regardless of whether anyone attended a class, the instructors at issue were paid only if a certain number of students attend their classes;
  • The studio did not place any restrictions on the instructors’ ability to teach for other studios; and
  • The instructors were not required to attend staff meetings or receive training.

Timeclock, Yoga InstructorsThe Court further held the “incidental control” Yoga Vida did exercise–such as determining if the instructors had proper licenses; publishing a master schedule on its web site; providing space  for the classes; and providing a substitute instructor if the non-staff instructor was unable to teach a class and could not find a substitute–did not warrant a finding of employee status.  The Court likewise did not view as dispositive that Yoga Vida generally determined the fee it charged to students and collected it directly from the students.  Finally, the Court held that students providing feedback on the non-staff instructors did not render the instructors employees, as “[t]he requirement that the work be done properly is a condition just as readily required of an independent contractor as of an employee and not conclusive as to either.”

Although this decision is encouraging for companies that engage independent contractors, it is important to remember that this determination, like all employment classification inquiries, is highly fact-dependent.  Businesses should conduct a self-assessment of their independent contractor models–ideally with under the supervision of counsel and subject to privilege–to determine the risk of a classification challenge from their independent contractors or government agencies.

© 2020 Proskauer Rose LLP. National Law Review, Volume VI, Number 302

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About this Author

Allan Bloom, Litigation Attorney, Proskauer Rose Law Firm
Partner

Allan Bloom is an experienced trial lawyer who represents management in a broad range of employment and labor law matters. He has successfully defended a number of the world’s leading financial services, investment management, technology, consumer products, telecommunications, publishing, insurance, construction, and lodging companies, as well as global law firms and cultural institutions, against claims for unpaid wages, employment discrimination, breach of contract, and wrongful discharge, both at the trial and appellate court levels.

212.969.3880
Guy Brenner, Labor Attorney, Proskauer Rose, arbitration proceedings Lawyer
Partner

Guy Brenner is a partner in the Labor & Employment Law Department and co-head of the Non-Compete & Trade Secrets Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues, medical and disability leave matters, employee/independent contractor classification issues, and the investigation and litigation of whistleblower claims. He assists employers in negotiating and drafting executive agreements and employee mobility agreements, including non-competition, non-solicit and non-disclosure agreements, and also conducts and supervises internal investigations.

Guy advises federal government contractors and subcontractors all aspects of Office of Federal Contract Compliance Programs (OFCCP) regulations and requirements, including preparing affirmative action plans, responding to desk audits, and managing on-site audits.

Guy is a former clerk to Judge Colleen Kollar-Kotelly of the US District Court of the District of Columbia.

202-416-6830
Carolyn M Dellatore, Labor Employment Attorney, Proskauer Rose law firm
Associate

Carolyn M. Dellatore is an Associate in the Labor & Employment Law Department and a member of the Employment Law Counseling & Training Group, resident in the Newark office. Her practice focuses on the representation and counseling of employers in all areas of employment and labor relations.

973-274-6032