Executive Liability Expanded in landmark NYC Freelance Act decision

Executive Liability Expanded in landmark NYC Freelance Act decision

We secured a decision of first impression in Yean v. Tulip Health Inc. and Prita Uppal, Index No. 651710/2026, Supreme Court, New York County. Justice Gerald Lebovits denied the defendants’ motion to dismiss claims under the New York City and New York State Freelance Isn’t Free Acts, allowing claims against Tulip’s founder and CEO to proceed alongside those against the company.

The statutes impose payment and other obligations on the person or entity that retains a freelancer, described as the “hiring party.” The question in Yean was whether an executive who personally recruited, negotiated with, and directed the freelancer could qualify as a hiring party even though the written agreement named the company.

The court held that the allegations supported that conclusion. The decision gives freelancers a route to pursue executives whose actual involvement brings them within the statutes’ definition.

The Facts

Jason Yean, a Queens-based health-technology marketing consultant, contracted with Tulip Health, a San Francisco company, for a $7,500 monthly retainer. After paying Yean for several months, Tulip and its CEO, Prita Uppal, sought to renegotiate his fee. When he would not agree, they refused to pay for two months of work he alleged they had directed him to perform.

To avoid a protracted dispute, Yean offered to accept payment for only the two weeks he worked in December. The defendants rejected that proposal and a further reduction to $1,500.

The defendants offered several explanations for withholding payment: Yean had quit in November; the agreement had expired after 60 days; his work was unauthorized; and slow periods during earlier months justified withholding later compensation. Yean also alleged that the defendants contacted a senior executive at a global medical-technology company and claimed he was demanding money he was not owed.

We brought claims for breach of contract, nonpayment, and retaliation, naming both Tulip and Uppal individually. The defendants moved to dismiss, arguing, among other things, that Uppal had not signed the agreement in her individual capacity and therefore could not qualify as a hiring party.

Applying the Economic Realities Test

Justice Lebovits rejected the argument that the statutory definition necessarily excludes an executive acting for a corporation. The definition reaches a person who retains a freelance worker to provide services; it is not expressly limited to the entity named in the contract.

Drawing an analogy to New York Labor Law decisions, the court examined the economic realities of the relationship: who exercised authority over retaining the freelancer, directing the work, and setting compensation.

Yean alleged that Uppal was Tulip’s founder and CEO; personally recruited him and transmitted the consulting agreement; negotiated the length of the engagement and compensation; and supervised his work. Taken as true at the pleading stage, those allegations supported claims against Uppal as a hiring party alongside Tulip.

The ruling allowed the individual nonpayment and retaliation claims to proceed. It addressed Uppal’s potential statutory responsibility, rather than treating the company’s signature on the agreement as the end of the inquiry.

The court also sustained the retaliation claim based on the alleged communication challenging Yean’s entitlement to payment after he asserted his rights.

The Choice of Law Clause and Earlier Decisions

The defendants also argued that the agreement’s California choice-of-law clause barred New York statutory claims. The court read the clause’s reference to “this Agreement” as governing contractual claims, rather than foreclosing the independent statutory claims asserted here.

The defense relied on StClair v. Sansal, a New York City Civil Court decision dismissing FIFA claims against individual corporate principals. Justice Lebovits expressly disagreed with that decision’s approach to individual liability.

The Commercial Significance

The decision connects responsibility to the executive’s actual role in the engagement. An executive who personally controls recruitment, compensation, and the freelancer’s work may face a claim in an individual capacity, even when the company is the contractual counterparty.

For a freelancer seeking payment, the relevant evidence may include communications showing who negotiated the engagement, assigned work, set compensation, and decided whether payment would be made. Those details can determine who must answer the claim and change the economics of the dispute.

The Resolution

After the motion was denied, the parties settled for 20 times Yean’s initial pre-litigation demand.