Independent Contractor Misclassification and Compliance News April 2026

As the independent workforce continues to grow, so do the issues of worker compliance and misclassification. It is important for enterprises to remain informed about the latest laws, regulations, and developments surrounding these topics. Each month, we bring you the latest news stories from around the web.

Independent Contractor Classification: Takeaways from the Dismissal of Blake Lively’s Lawsuit Claims

The dismissal of Blake Lively’s harassment and retaliation claims against the production entities behind the major motion picture, “It Ends With Us,” was not based on whether harassment or retaliation occurred; rather, it hinged on whether Lively was classified as an employee or an independent contractor.

Her sexual harassment and retaliation claims were dismissed because she was an independent contractor, not an “employee”—and only employees can assert claims under Title VII. The court’s decision relied on the multifactor tests established by the Supreme Court in Nationwide Mutual Insurance Co. v. Darden and Community for Creative Non-Violence v. Reid.

The court quoted Reid, stating:

“In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.”

The court relied on several facts in the case—including her level of control over the production, the project-based nature of her roughly six-week engagement, her payment through a personal loan-out company (structured as a flat fee plus contingent compensation), and her ability to accept outside work—to determine that Lively was an independent contractor, not an employee.

As a result, the court dismissed her federal claims but allowed her claims under California law to proceed. Some states, such as California and New York, have enacted laws that extend protections to independent contractors by prohibiting harassment and retaliation. The court also, after a lengthy analysis, allowed Lively’s contract-based claims to move forward.

The Blake Lively case is another reminder that worker classification shapes the rights and responsibilities on both sides. Companies that engage independent contractors should carefully review their contracts to understand the obligations and potential risks involved. While companies that engage independent contractors may not face liability under federal harassment or retaliation laws, steering clear of that kind of conduct still matters—for sound risk management and overall business integrity.

For more information, check out our resources page on misclassification and compliance. If you have any questions about engagement, classification, or management of your independent workforce, we’re always here to help.