In an employment setting, the term “work product” refers to anything created by an employee that becomes property of the employer under certain conditions. Common examples of this are clothing designs, beverage formulas, or food recipes created by an employee that are then owned by the employer once the work is finished.
In most cases, the ownership arrangement is governed specifically by a work product clause in the employment contract. For example, the contract might contain a clause stating, “All employment-related work created by the employee in the course of the employment is property of the company”.
Note: In an attorney-client relationship setting, the term “work product” refers to work that is done by an attorney in preparation for trial (such as their notes, legal research, conversations with the client, etc.). Work product is usually protected, meaning that the other party can’t access it if it was prepared in preparation for trial.
What are Some Common Work Product Disputes?
Most people expect that the work that they do for the company they work for will become the company’s property. They may even be required to sign a confidentiality agreement regarding the work. However, work product matters can often be the source of many legal disputes, including:
- Employees vs. Independent contractors work: Independent workers usually own their own work product, and then allow a contractor to use their work via a license. For example, if the creator made the work on their own computer, in their own private studio and apart from any employment contract, they would probably own the product. In contrast, a worker who is hired by an employer and does the work on the company computer likely won’t own the work product
- Employer vs. Employee disputes: If ownership is unclear, it can lead to a legal dispute. For example, extra work not covered in a contract may be subject to ownership dispute. Disputes over pay and hours are also common
- Employee-to-Employee disputes: In some cases, there can be disputes as to which employee actually created the work. This can usually be proven through employee work logs, record files, computer data, etc.
- Usage and royalty rights: Disputes over the future use of the work product are also common. However, in most cases, the work product contract clause should cover issues such as future sales of the product and royalty rights.
There may also be many other kinds of work product disputes, depending on the nature of the employment agreement, as well as the employment laws for that particular state.
What Clauses and Terms Are Used in Employment Contracts To Limit Work Product Disputes?
There are a number of clauses and terms an employment contract can contain to control employee work product. These are usually referred to as Pre-Invention Assignment Agreements. These agreements assign to the company all ownership of the inventions and work product that the employee may create during the course of his or her employment.
The agreements may vary greatly between contract to contract depending upon the employer’s needs. Such agreements may include the following provisions:
- Assignment Provision: This is generally the part of the agreement which assigns ownership to the company.
- Disclosure Provision: This clause requires that the employee disclose to the company any invention or product that the employee created for the company.
- Power of Attorney Provision: This clause allows the company to register, trademark and/or copyright the employee’s product or invention without the employee’s consent.
- Holdover Provision: The holdover clause allows the company to retain ownership over the product or invention even after the employee has left the company.
- Waiver Provision: These require the employee to disclose all inventions or products the employee made before joining the company, thereby negating the defense that the employee created the product before entering the company’s employ.
What Happens If There Isn’t an Agreement or Contract Regarding Work Product Ownership?
If a written contract doesn’t govern work product ownership, an employer may still claim that an oral contract was formed during the course of the employment. Such claims must be proven of course, but assuming that such an agreement was discussed but not written down, there are some basic ground rules that courts may use to determine the limits of such disputes.
- The Employee’s Duties: If the employee was specially employed to create or develop, then the employer has greater claim to the inventions or products created or developed by the employee.
- Use of Company Resources: The more company resources the employee uses to create the product, the less rights the employee has over the product. This includes time, so if the product was created outside the scope of employment, the employee has more power over the invention.
- Company Marketing: In some instances, the employee can have the company market the product in exchange for royalties. The employee may actually be an independent contractor in these cases.
What if I’ve Been Involved in a Work Product Dispute?
Work product disputes can mostly be avoided through clear communication, straight-forward negotiation, and a precisely written contract. If you don’t want to share your work product with an employer, the subject matter may be up for negotiation. However, if your employment is dependent on submitting your work to the employer’s ownership, it may cause you to rethink your work options.
Most work product disputes require the filing of a lawsuit in a civil court of law. If you’re considering such an action, you should take the following steps:
- Review any contracts and agreements you may have with the employer or other party. Make copies of the contract and take note of the important provisions related to your work product
- Keep copies of your work product, and if possible you should be able to retrace the way that the work was created (such as computer progress files, etc.)
- Take note of any witness testimony that may be related to your claim
- Avoid discussing your legal matters with other people besides an attorney, especially because work product disputes often involve an element of confidentiality
Do I Need a Lawyer if I Have a Work Product Dispute?
Work product disputes can often have long-term consequences. For example, the worker may lose their right to reap income from the product in the long run. Work product disputes generally require the assistance of a qualified lawyer. An employment attorney can help you file the claim in a court of law and can assist you with various legal tasks. An experienced lawyer in your area can help you receive a legal remedy for your losses, such as a damages award.