New York Circuit Court of Appeals Takes First Crack in Interpretation of New York Freelancers Act | Smaller

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The First Division of the Supreme Court, Appellate Division (the “Appeal Division”) recently issued the first appellate decision interpreting the Freelance Isn’t Free Act (FIFA) of New York City.1 The plaintiffs — a photography company and a model — first filed an administrative complaint against a high-end fashion label for not paying them in full for an October 2019 photoshoot, and then filed suit in state court after the fashion label failed was react.2 The main issue in the appeal process was whether the model can be considered a “freelancer” in the sense of FIFA if she is represented by a model agency, as is the case here. The Appeals Division ruled that representation by an agent does not necessarily exclude a worker from FIFA’s freelance worker protection.

NYC Freelancer is not a free act

Enacted in 2016 and effective May 15, 2017, FIFA is what the Appeals Division described as “the first law of its kind in this country to offer freelancers legal protection against non-payment for work performed.”3 FIFA defines a “freelance worker” as “any natural person or entity consisting of not more than one natural person, whether registered or using a trade name, employed or contracted by a client as an independent contractor, to provide services in exchange for compensation.”4 In certain circumstances, FIFA requires freelance agreements to be in writing and freelancers to be paid within a certain period of time. As with other New York City ordinances, FIFA allows a freelancer to file an administrative complaint before filing a lawsuit in court, but is not required to do so.5 For a full overview of FIFA, see Littler’s previous coverage of this law.

Determination of freelancer and hirer status.

The Appeals Division ruled that the model’s representation by an agency does not in and of itself exclude her from the protections afforded to freelancers under FIFA. Instead, the court found that their status was ultimately a matter of fact. The Appeals Division separately signaled that the model had asserted her position sufficiently to sue the fashion label as a “hiring party.”

The model is not a freelancer, but an employee of the model agency within the meaning of the model booking contract, the fashion label argued. The Court found that FIFA and its implementing regulations are “silent as to how an agent should be included in the calculation of whether someone is a freelance worker” but that workers represented by agents are Not among the enumerated examples of individual workers excluded from the freelancer definition.6 The court also found that when passing FIFA, the city council had taken into account statements from “FIFA advocates in various industries who shared that freelancers use agencies”.7 By ruling that the model’s claim was properly made and that the parties “should determine” whether the model was a freelance worker for FIFA purposes, the court essentially ruled that a represented model’s status as a freelance worker was a question of fact. However, the court did not explain what factors would be relevant in determining whether an employee represented by the representative is a freelancer or an individual working as part of a larger agency.

The fashion label also argued that since it has a contractual relationship with the modeling agency – and not the model herself – it could not have been the model’s “renter” for FIFA purposes.8th The court ruled that the model booking contract and the invoices issued on it were not decisive in determining whether the model’s “renter” was the fashion label and not the modeling agency or another party.9 In filing the lawsuit, the court acknowledged the model’s allegation of having provided services for the fashion label. The court did not detail its legal reasoning, but its ruling implies that courts look more to the reality of the work being done than to the way the transaction is contractually structured. In other words, if the model has done work that benefited the fashion label, they can make a claim against the fashion label and not the modeling agency, who can ultimately pay them for the work done during the photo shoot in question.

What deference is due to an OLPS investigation?

The Appellate Division’s decision stems from the fashion label’s failure to respond to the plaintiffs’ administrative complaint to the OLPS. After the fashion label failed to respond, the OLPS issued a notice advising the fashion label’s defendants: “Failure by a client to respond to a notice of complaint within 20 days establishes a rebuttable presumption in any civil proceedings instituted pursuant to [FIFA] that the hiring party committed the violations alleged in the Complaint.”10 This presumption automatically applies to a client’s failure to respond to administrative complaints lodged with the OLPS.11 Currently, the OLPS has no statutory authority to decide on administrative complaints. When a hiring party responds to an administrative complaint, the OLPS Director normally issues a letter of right of appeal and provides the complaining party with a copy of the hiring party’s response.

In examining the OLPS’ finding of rebuttable presumption in favor of the plaintiffs, the Appellate Division proceeded on the principle that “observance of an administrative authority’s interpretation and ‘specific application of a broad rule of law’ which it is charged with implementing may be justified “.12 The court acknowledged that “it is unclear what OLPS’ internal procedure looks like after receiving a complaint” and suggested that “[d]The OLPS discovery may also shed light on whether the model represented by the agent is a freelancer as defined by FIFA.13 Despite the court’s suggestion that the OLPS conducted some sort of fact-finding investigation, it may be that the rebuttable presumption was applied solely by applying the OLPS rules and that the agency did not conduct a substantive analysis. In this case, the court of first instance is left with no judicial or administrative guidance as to what facts or circumstances to take into account in order to determine whether the model represented by the agent is in fact a freelancer within the meaning of FIFA, or what evidence the hiring party can provide in order to disprove this presumption in favor of the model.

Advice for tenants

With this first appellate decision, and with the possible passage of a similar bill recently passed both houses of the New York State Legislature (discussed here by Littler), enforcement of freelance worker protections in fashion, art and other industries could increase. Generally, hiring parties should not assume that representation by a talent agency or staffing agency will decouple them from the obligations imposed by FIFA on hiring parties in relation to their freelance workers. Hiring parties should consider taking steps to learn how all individuals and organizations working on set, on location or in the studio (or their remote equivalents) are compensated and endeavor to ensure that clarity consists of which entity is responsible for which payments.

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