Work Product Disputes

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 What is “Work Product” in an Employment Setting?

In an employment context, the term “work product” refers to anything that an employee creates for an employer or at their place of employment for job purposes. Some common examples of work product are clothing designs, food or beverage recipes, graphics or logos, and product formulas.

If an employee develops any of the above examples or other work products specifically for an employer or to fulfill their job duties, then the final work product will belong to their employer once the project is complete.

In most instances, an employee can figure out the ownership arrangement of a work product by reviewing their employment contract. This is because work product clauses are typically included as part of employee-employer agreements. For example, an employment contract might contain a provision that says, “All employment-related work created by the employee during the course of employment will become the property of the employer and/or company.”

It should be noted, however, that there is one outlier situation that persons who use the term “work product” should be aware of and that is when it is used in reference to an attorney-client relationship. In this context, the phrase means any work that is done by an attorney in preparation for a trial or other legal proceeding, such as taking notes, performing legal research, discussing aspects of a case or the law with their client, and so forth.

Also, work product in an attorney-client relationship setting is normally protected by common law practices. For instance, the opposing party in a lawsuit may not view or have access to a work product if it was created in preparation for trial.

For the purposes of this article, however, discussions about work product will primarily focus on how it is viewed in an employment context. Thus, if you are involved in a dispute over a work product with your employer, then you may want to consult with an employment law attorney in your area for further advice on the matter.

What are Some Common Work Product Disputes?

Many employees already assume that the work they do or create for a job is owned by the individual or entity that employs them. However, not every worker will necessarily have to sign an employment contract or confidentiality agreement before they are hired. This can cause future disputes to arise over which party has ownership rights to a work product or invention.

For instance, some common work product disputes that might occur between an employee and their employer include the following:

  • Employee versus employer disputes: If the ownership rights to a work product are unclear, then this can cause a dispute between an employee and their employer. Aside from ownership rights, an employee may argue that the work product was additional work done during off-hours or that they were never paid for the work product. In such cases, they may be able to recover monetary damages from their employer.
  • Usage and royalty rights: Employment contracts that contain work product provisions will normally provide instructions on details, such as what should happen in the event that a work product dispute occurs, who retains the royalty rights to a work product, who collects the proceeds if a work product is sold, and which party will have future use of the work product in question.
  • Disputes between individual employees: Sometimes, a work product dispute might occur between two employees that work for the same employer. For example, the employees may argue over who actually made the work product or who should get credit for it. In such cases, the employees can provide proof of their creation by submitting certain evidence like work logs, computer data, sketches or drawings, and physical or electronic records.
  • Work done by employees versus independent contractors: In most cases, an independent contractor will usually own the work product that they create and then permit an employer to use their work through a license agreement. For instance, if an independent contractor created a work product using their own laptop, in their own residence, and without any further instructions, then they most likely own that work product.
    • On the other hand, if an employee is hired by an employer or company to specifically create a work product, must follow the employer’s instructions, and use the materials provided by the employer, then the employer will most likely own the work product, not the employee.

Depending on the provisions in an employment contract, there may be many other types of work product disputes that might arise during an employee’s course of employment. Additionally, the laws of a particular state can also impact whether an employee may file a lawsuit to resolve a work product issue as well as the outcome of a case.

What Clauses and Terms Are Used in Employment Contracts To Limit Work Product Disputes?

There are several clauses and terms that can be found in an employment contract that may be used to control the outcome of work product disputes. Such provisions are known as, “Pre-Invention Assignment Agreements.” These types of provisions legally assign ownership over the work products that an employee creates or invents during the course of their employment to their employer or company.

Pre-Invention Assignment Agreements are not the only kinds of provisions that may be incorporated in an employment contract to limit work product disputes. This is because employees and their employers are generally free to negotiate the terms and conditions provided in an employment contract. Thus, each individual agreement can vary greatly from the next.

However, most employment contracts are usually formed in accordance with an employer’s needs in mind. Some common examples of clauses used in employment contracts that may affect or limit the outcome of a work product dispute include:

  • Waiver provisions: Waiver provisions force an employee to disclose and give up their rights to any inventions or products they created before being hired by an employer, so long as the employee does not have a patent for those inventions or products. This provision also prevents an employee from using the defense that they developed the invention or product before they were employed by the company.
  • Holdover provisions: A holdover provision allows an employer to retain the rights to a work product or invention created by an employee, even if the employee no longer works for the employer. Note that holdover provisions usually do not extend for longer than a year, and in some cases, may expire within six months depending on the conditions.
  • Assignment provisions: As stated above, this clause is regularly used to assign ownership of an employee’s work product to an employer or company.
  • Disclosure provisions: The disclosure provision requires that an employee disclose any work product or invention they developed during the course of an employment to their employer.
  • Power of attorney provisions: This clause gives an employer or company the power to register and distribute an employee’s work product invention or creation without their consent. This means the company would be free to do things like trademark, copyright, or patent an employee’s work product without their permission.

What Happens If There Isn’t an Agreement or Contract Regarding Work Product Ownership?

Although it will be much more difficult for an employee to prove, it is possible to file a claim based on an oral contract even if no written agreement or contract regarding work product ownership exists. Some basic guidelines that courts generally follow in determining the limitations of work product lawsuits based on oral contracts include:

  • Use of company resources: Generally speaking, the more company resources that an employee uses to create a work product, the less likely it is that the employee has any ownership rights to that work product. This includes more than just physical materials, such as time.
    • For example, if a particular work product was created outside of the scope of employment and/or working hours, then the employee will likely have a stronger claim to the work product. If the work product was created during work or within the scope of employment, then it will likely belong to their employer.
  • Company marketing materials: There are some scenarios wherein an employee might create work content for a company in exchange to have it marketed for royalties. In such instances, the employee may be considered an independent contractor. In which case, they will likely have a contract, but if not, can show the royalties as evidence that the work product is owned by them, not the company.
  • Employee job duties: If an employee was specifically hired to develop or create the disputed work product, then their employer will have a stronger claim of ownership over the inventions or products made by the employee.

What if I’ve Been Involved in a Work Product Dispute?

In general, the circumstances surrounding a particular work product dispute can have a substantial effect on the outcome of such issues. Oftentimes, work product disputes hinge on the terms of an individual’s employment contract.

For example, if an employee negotiated a provision in their employment contract to maintain ownership over their work products, then they most likely would be able to argue that this clause protected them from having to give up their ownership rights to any work products they created.

On the other hand, if an employee signed an employment contract that lacks such a provision, then it might be much more difficult to argue that the work product rightfully belongs to them and not their employer.

Thus, the first step an employee should take when involved in a work product dispute is to review the terms of their employment contract or any other agreement they signed with their employer concerning work products.

In most instances, an employee will need to file a lawsuit in civil court in order to resolve a work product dispute. Therefore, after the employee reviews their contract and/or other work product agreements, they should consult with a local employment attorney to confirm that they have an actual case. A lawyer can also provide advice on the potential benefits and risks of filing a work product lawsuit, as well as will be able to discuss next steps.

For example, if the employee’s lawyer recommends filing a lawsuit against their employer, the employee will then need to gather enough evidence to prove that they did in fact create the work product. They would also need to be able to demonstrate to the court that they could even recreate it if they had to by following the same steps, which they hopefully have documented.

Any witnesses that can attest to the fact that the employee created the work product or why it may belong to the employee and not their employer may be helpful to use as evidence as well.

Finally, while each work product case may differ, employees should always avoid discussing their legal matters with other individuals unless their attorney is present and/or advises them to do so. This is especially important when it comes to legal disputes over work products because these cases tend to involve an element of secrecy or confidentiality.

Do I Need a Lawyer if I Have a Work Product Dispute?

Disputes over work product can sometimes have long-term consequences. For instance, a worker may lose their right to profit off of the product sales even though they are the one who created it. A worker can also jeopardize their job in the process. Therefore, if you are involved in a work product dispute, it is generally recommended that you hire a local employment contract attorney to further assist you with your issue.

An experienced employment attorney can review the facts surrounding your dispute and determine whether you have a viable case. If you do have a case, your lawyer can help you file a claim against your employer or company in civil court. Your lawyer can also review your employment contract to make sure that it was not breached and can assist you in negotiating a favorable settlement arrangement based on the facts of your case.

In addition, if you and your employer cannot reach an agreement on the matter, your lawyer can provide legal representation in court. Lastly, your lawyer will also be able to advocate on your behalf for the remedies that are best suited to your situation, such as a monetary damages award or an injunction.

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