Little Miss Conduct: The Case of the Missing Clause

How one sentence in a contract nearly triggered years of legal headaches

Before we dive into this week’s case, here’s who Curb Misconduct is for.

If you’re an employee, these stories show what policies and procedures should protect you - and what gaps can cost you.

If you’re an employer, these stories reveal how to document clearly, communicate expectations, and prevent a policy failure from turning into a hearing.

Okay, that’s out of the way - let’s begin.

This week, Little Miss Conduct is side-eyeing a real estate firm that almost blew its case over one missing clause.

What Happened in Appeal Board No. 631553

Here we go. Another business that thought “independent contractor” was magic language. Spoiler: It’s not.

A real estate brokerage got a not-so-friendly memo from the New York State Department of Labor. Turns out, one of its salespeople - and others like her - should’ve been classified as employees. Which meant the company was on the hook for unpaid unemployment insurance contributions. Going all the way back to 2019. Ouch.

The brokerage disagreed. They insisted she was an independent contractor and tried to use the real estate exclusion in Labor Law Section 511(19) as a shield.

At first, it worked. An administrative law judge ruled in their favor.

But on appeal? Reversed. Why? Their Independent Contractor Agreement was missing key phrases the law explicitly requires. Including:

• That the salesperson could set her own hours

• That she could work from anywhere

• That either party could end the agreement, no strings attached

Even though the day-to-day relationship looked pretty independent - and the Board agreed she wasn’t an employee under the usual common law test - the contract failed the stricter statutory test. One missing clause turned their win into a long, expensive do-over.

In the end, they dodged the financial hit. But only after multiple hearings, delays, and the rollercoaster of being right… then wrong… then technically right again.

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What Employers Can Learn (a.k.a. How Not to Get Roasted):

• Having the phrase “independent contractor” alone in the contract does not protect. The contract needs every single required phrase under the law if you're leaning on a statutory exclusion like 511(19).

• Update your agreements regularly. Language requirements change. So should your contracts.

• Include these, or risk regret:

  • Worker chooses their own hours

  • Worker can work from any location

  • Worker can take other jobs

  • Either party can walk away, no conditions

• Reality check: If your contract says one thing, but practice says another - you’re still exposed.

• Train your people. HR and Legal need to know the difference between common law standards and statutory exclusions. They’re not the same beast.

One clause. That’s all it took to unravel a win. In the legal world, precision isn’t extra credit - it’s the assignment.

Seen contracts that were almost airtight… but not quite?

Drop your thoughts. What could this brokerage have done differently?

About Curb Misconduct

I’m Julie Huang.
Before I worked in city government, I led award-winning crisis and investor communications campaigns. Later, I represented the City in over 1,000 unemployment insurance hearings - preparing supervisors on more than 260 cases to testify, conducting direct and cross examinations, delivering closing statements, and drafting appeals to overturn unfavorable decisions.

Those hearings changed how I think about accountability, culture, and risk.

I started Curb Misconduct to break down real NYS Appeal Board decisions, spotlight the missteps that could have been avoided, and help employers do better - before the fallout.

Enter my alter ego: Little Miss Conduct.
She wears a sharp blazer, carries a clipboard, and doesn’t tolerate vague policies or weak documentation. She doesn’t yell. She documents.

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“Because the hearing room is where vague policies go to die.”

- Little Miss Conduct

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