David Kleinmann Authors Law360 Article on Clearing Up Broker-Dealer Classification Questions in NY

July 6, 2017

Law360 published an article authored by Labor and Employment partner and co-chair of the Restrictive Covenant practice David Kleinmann titled, “Clearing Up Broker-Dealer Classification Questions in NY.” The article explores a recent decision by the New York State Department of Labor’s Unemployment Insurance Appeal Board that provides broker-dealers with greater clarity surrounding whether Financial Industry Regulatory Authority-registered representatives working in stockbroker positions are properly classified as independent contractors and whether sales mentorship and assistance programs can be conducted without creating an unintended employer-employee relationship. The recent decision that David discusses In the Matter of Cape Securities Inc. & Yoo Kim, in which the appeal board heard an appeal of an initial determination that a FINRA-registered representative working in a stockbroker position, and all similarly situated individuals, were employees rather than independent contractors. Noting that the Cape Securities decision “provides a narrow but clear safe harbor for NYSDOL investigations into classification,” David notes what broker-dealers should do to leverage this decision.

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