Is Customized Software a ‘Work Made for Hire’?

Is Customized Software a ‘Work Made for Hire’?

Contracts, Copyright, Employment Agreements, Independent Contractor
Your company just hired someone to help develop your new mobile app. Your agreement with this programmer or engineer specifically states that anything she creates for your business is a "work made for hire". Your business is good, right? No way that the new hire can ever lay claim to the deliverables, correct? In my Phoenix startup and technology law practice, I get this question a lot as it pertains to software and app development.   Unfortunately, the term "work made for hire" (or, more colloquially, "work for hire") is a term as misunderstood by companies as it is misused. The "Work Made for Hire" Doctrine Explained Generally speaking, a work that is copyrightable is the sole property of the person who created it (and assuming the author has not transferred…
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Do Employees Have to Pay Back Training Costs if They Leave the Company?

Do Employees Have to Pay Back Training Costs if They Leave the Company?

Contracts, Employment Agreements
In competitive job markets like the current one, it is not unusual for employers (and firms working with them) to offer prospective workers training in specialized areas as incentive to accept employment.  For many businesses looking to develop staff in response to talent gaps, the investment in training can be significant. But what happens if the employee your company has spent weeks or months training quits or leaves to take another offer before the agreed-upon term of employment is up.  Can your company legally recover the investment in that employee from him/her? Liquidated damages provisions in Arizona employment agreements Under Arizona law anyway, where a contract (such as an employment agreement) provides for a party's remedy in the case of a breach by the other party, the provisions of the…
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Got DIBS? Arizona’s New Independent Contractor Law and Your Startup

Got DIBS? Arizona’s New Independent Contractor Law and Your Startup

Business Formation, Employment Agreements, Independent Contractor
I'm often asked by start-up founders (and even more established, traditional businesses) whether it matters what they call their employees;  more specifically, whether they should be paid as regular "W-2" employees or "1099" independent contractors. The Independent Contractor/Employee Misclassification Dilemma The question can be a difficult one to answer, with very real consequences for the wrong choice. State and Federal misclassification efforts have been on the rise. Making matters worse, these cases tend to be highly fact-specific and costly for a company to defend. Generally speaking, the employer ordinarily has the burden of proving that an actual independent contractor relationship exists by "clear and convincing" evidentiary standard. As a result, businesses frequently grapple with the question who is an independent contractor and who is an employee, and the need for clarity…
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Trump vs. Bannon, and The Enforceability of Non Disparagement Clauses

Trump vs. Bannon, and The Enforceability of Non Disparagement Clauses

Contracts, Employment Agreements, Non-Disparagement
By now, most of my well-informed readers have heard of the war-of-mudslinging between President Trump and his former campaign mastermind/chief strategist Steve Bannon.  As a Phoenix business attorney, one aspect of our President's latest feud that was of real interest was the cease and desist letter sent by Trump lawyer Charles Harder to Bannon accusing the former White House staffer of being in violation of a non disparagement agreement he entered into when he joined the Trump presidential campaign. In my practice, I have noticed the increasing use (and request from clients to integrate) such clauses in both business and employment agreements over the past several years.  The question is, are such clauses actually enforceable? Non Disparagement clauses are (generally speaking) enforceable The short answer is: yes.  The handful of…
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