Duck, Duck, Employee

To help determine who is an employee when it comes to work for hire, the US Supreme Court inCommunity for Creative Non-Violence v. Reid identified three broad factors that make up an “employer-employee” relationship.

  • Control by the paying company over the work. The more the control the paying company has over what the work is and how it is done, the more likely it is they will be seen as an employer.

For example, if the paying company determines how the work is done, has the work done at the paying company’s location, and provides equipment or other means to create the work, the more likely the paying company is going to be seen as an employer.

  • Control by paying company over the contractor. The more the control the paying company has over what the contractor is doing and how it is done, the more likely it is they will be seen as an employer.

For example, if the paying company controls the contractor’s schedule in creating the work, has the right to have the contractor perform other assignments (i.e., the contractor is obligated, not the option to do so), determines the method of payment, or has the right to hire the contractor’s assistants separate and apart from contractor, then it looks more like an employer.

  • Status and conduct of paying company. If the paying company acts like the contractor is an employee and others think that the contractor is, then it’s much harder to argue that it is not an employer.

For example, if the paying company is in business to produce the works it hired the contractor to create, provides the contractor with benefits, or withholds tax from the contractor’s payment, then it looks an awful lot like an employer.

These factors are not exhaustive. The Court left it unclear which of these factors are required to be present to establish the employment relationship under the work-for-hire definition or which is the most important. It even held that supervision or control over creation of the work alone is not controlling.  Actions by the company acting like an employer, not just that its really interested in the project, seem to be necessary.

It’s the old looks like a duck, quacks like a duck, and waddles like a duck, then it’s a pretty good bet that it’s a duck.  The problem comes when it maybe looks like a goose or a platypus.

And don’t forget, it might help you own a copyright by being found the employer, but these same factors go into the determination of whether or not you are an employer for things like paying benefits, social security and other fees and taxes. So be careful about winning the copyright battle but losing the overall liability war.  In other words, think about it ahead of time and address in the engagement contract, then you can leave the poor platypus alone.

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