Opinion ID: 2621232
Heading Depth: 1
Heading Rank: 9

Heading: New York test

Text: Finally, an additional test has been formulated by the New York Court of Appeals in Niesig v. Team I, [51] which explicitly rejects reliance on the former comment. The test is often referred to as the alter ego test. [52] The court rejected the blanket test as too broad, and the control group test as too narrow. It also expressed dissatisfaction with the existing intermediate tests, because they were too uncertain in application. Instead, while acknowledging that any non-blanket rule engendered some uncertainty, the court formulated its own test: The test that best balances the competing interests, and incorporates the most desirable elements of the other approaches, is one that defines party to include corporate employees whose acts or omissions in the matter under inquiry are binding on the corporation (in effect, the corporation's alter egos) or imputed to the corporation for purposes of its liability, or employees implementing the advice of counsel. All other employees may be interviewed informally. [53] In particular, the court noted that its test would clearly permit direct access to employees who were merely witnesses to an event for which the corporate employer is sued. [54] This test has since been adopted by several courts. [55] One advantage of the New York test is that it balances the protection afforded to the organization with the need for informal investigation, although it may go too far in protecting the organization by including those employees whose conduct may be imputed to the organization. Its disadvantage, as admitted by the Niesig court, is that any non-blanket rule has an element of unpredictability, and so in close situations it may be difficult to determine whether a particular employee is within its scope. In particular, as with the managing-speaking agent test on which the New York test is based, it may be difficult to determine which employees have sufficient authority to bind the organization.