How We Preserved Personal Claims Against A Startup CEO Under NY FIFA

Our client, a healthcare consultant, sued Tulip Health and its CEO to recover unpaid consulting fees and damages under New York’s Freelance Isn’t Free Act.

The defendants moved to dismiss, arguing that New York lacked jurisdiction and that the CEO could not be held personally liable because the consulting agreement was entered into through the company.

We opposed the motion.

The Motion

The defense sought to distance both defendants from New York and confine any potential liability to the corporate entity. But their position conflicted with the communications attached to the pleadings, which showed that the CEO knew our client was working from New York and was directly involved in the engagement, payment dispute, and conduct underlying the retaliation claim.

The CEO’s Personal Exposure

The CEO separately argued that she could not face individual liability because Tulip Health—not she personally—was the contracting party. But the Freelance Isn’t Free Act imposes obligations on a “hiring party,” a functional designation that is not necessarily confined to the name appearing on the contract.

The complaint alleged that the CEO directly participated in the engagement, exercised control over the payment decision, and personally engaged in the alleged retaliation after our client sought the compensation he was owed. We argued that those allegations were sufficient to treat her as a hiring party in her own right.

We argued that the statute imposes liability on a “hiring party”—a functional designation that is not necessarily limited to the corporate signatory. Based on the CEO’s direct participation, the complaint sufficiently alleged that she independently qualified as a hiring party under the Act.

Nearly All Claims Preserved

Justice Gerald Lebovits denied the motion to dismiss, allowing the claims to proceed against both Tulip Health and its CEO personally. The decision provides significant New York state-court authority recognizing that a corporate executive may independently qualify as a “hiring party” and face personal liability under the Freelance Isn’t Free Act.

The ruling preserved our client’s complete statutory case and prevented the defendants from using the corporate form to eliminate the CEO’s personal exposure at the pleading stage.