One of the most significant risks is jeopardizing intellectual property (IP). If your company is information-rich, your priority should be to control and maintain ownership of your proprietary information when working with contractors. Businesses who hire contractors need to understand that many of the automatic legal protections arising from an employment relationship do not extend to a contractor relationship.
The question becomes: How do you utilize gig workers for the benefit of your company yet still protect your IP and other assets?
Ownership Rules for Contract Workers
Traditional employees have an implied duty of loyalty to their employers which can include the obligation to maintain confidentiality over employer information that is identified as confidential or otherwise known by employees to be confidential, with or without a written employment contract. Part of this obligation is to refrain from disclosing the employer’s confidential information unless it is done as a part of their official duties of employment.
However, this obligation does not automatically apply to gig workers. In some circumstances, the courts will recognize that the agreement that creates the relationship includes such an obligation. However, when there is no express written agreement, such a finding is highly dependent on the facts at issue and companies need to remember that there is no presumption of confidentiality with contractors without direct evidence (such as in a written agreement) supporting that such an obligation was made a part of the agreement with the contractor.
Another point to consider is that employers generally own the copyright for IP created by an employee in the course of their work, because the employee is not independent. There is no such presumption for contract workers, and instead the opposite default presumption is in place that the contractor holds the copyright over the work they create unless the contract explicitly states otherwise. Most contracts for ghostwriting, for example, clearly state that the client owns any and all rights to the completed work.
Suppose a business fails to make its expectations clear, set limits on how the IP can be used, or ensure that it has clear rights over anything developed or created by the contract worker. In that case, the business will very likely fail to obtain exclusive or comprehensive ownership and control over the IP produced.
Gig Worker Contracts: Best Practices
Whether you hire one contractor worker or one-hundred, a comprehensive, legally sound contract is imperative to protecting your company. Your contract should include, among other terms:
- Clear transfer to the company and ownership terms regarding the IP created;
- Confidentiality obligations and limited licenses to the contractor of any confidential information and company IP used by the contractor during the engagement;
- Clear limitations and requirements regarding the origination, development, and use of third party materials within the products or IP developed for the company, along with warranty and indemnification obligations regarding such materials; and,
- Limits or exclusions on the contractor’s use of the IP products created for your company, such as use by the contractor for a portfolio or marketing of their own services to third parties.
Let an Experienced Business Lawyer Help
Whatever business sector you are in, you are focused on your mission and your clients. You should not have to worry about the risks of contracts for the gig workers you hire. At Hackstaff, Snow, Atkinson & Griess, LLC, our experienced business attorneys can take on this critical task for you. By hiring a lawyer to help draft these contracts, you save time and ensure they are legally valid. Protecting your company and safeguarding your information is crucial. We can partner with you to make working with contract workers a success. Contact us today to learn more.
