Law360 Quotes Locke Lord Partner Richard Reibstein on Challenges Facing Companies When Reclassifying Independent Contractors to Employee Status

Richard Reibstein, a New York Partner in Locke Lord’s Labor and Employment Practice Group and co-head of the Firm’s Independent Contractor Compliance and Misclassification Practice, was quoted by Law360 regarding an injunction obtained by the San Francisco city attorney that requires a hospitality staffing platform to reclassify its independent contractors as employees. Reibstein notes that companies cannot be forced to change their business model and will only do so if an employee model is a “viable long-term path forward for a company that’s structured to operate with independent contractors.” He adds, “Every now and then, a company operating under an independent contractor business model recognizes that it may be feasible to conduct business under an employee model. But that is the exception, not the rule.”

Companies faced with a lawsuit that will likely lead to a finding that they misclassified employees as independent contractors are not required to agree to reclassify or comply with an injunction mandating that they recategorize their workforce but instead “can take a nuclear option,” Reibstein points out. “Companies are legally entitled to simply cease doing business, which is what some companies have chosen to do instead of being subject to multiple repeated litigation challenges in California.”

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