The High-touch Legal Services® Blog…for Startups!

© 2009-2018 Dana H. Shultz, Attorney at Law

ABC Test for Employee Misclassification in California

Banner of the California Courts, the Supreme Court having rendered an opinion about the ABC Test for employee misclassificationThis post discusses a recent California Supreme Court decision by which it adopted the so-called ABC Test for misclassification of employees as independent contractors.

The relevant case is Dynamex Operations West, Inc. v. Superior Court, decided on April 30, 2018. (more…)

Important Independent Contractor Agreement Provisions

Logo for Quora, where Dana Shultz wrote about independent contractor agreement provisionsI am writing this post because of a Quora question that I answered. Please see What are the most important provisions in an independent contractor agreement?

Independent Contractor Agreement Business Terms

As concerns business terms, the most important provisions in an independent contractor agreement pertain to the following. (more…)

DTSA (Defend Trade Secrets Act) Requires Notice to Employees

Photo of Obama signing a bill, symbolizing enactment of DTSAUntil recently, trade secrets were solely a matter of state law.  However, on May 11, 2016, President Obama signed the DTSA, the Defend Trade Secrets Act of 2016.

Because of the DTSA, trade secret misappropriation suits with an interstate component now can be filed in federal court. For more information about civil and criminal enforcement, please see Trade Secrets Receive Federal Protection. (more…)

“Work Made for Hire” Can Convert a Contractor to an Employee

California Labor Code, whcih can convert a contractor to an employeeIn California, a “work made for hire” (WMFH) provision in a contract can convert a contractor to an employee. This post describes the statutory basis for this little-known area of the  law.

Before providing details, I will note that the (likely unwanted) ability to convert a contractor to an employee will arise only under narrowly-defined circumstances.

  • The independent contractor must be an individual rather than a legal entity (a corporation or limited liability company).
  • The relevant contract must expressly specify WMFH treatment for the contractor’s work product.
  • The contractual relationship must be governed by California law. (I don’t know whether any other states have similar laws.)

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Independent Contractor Misclassification Can Be Expensive

Picture of several gold bars, symbolizing the cost of misclassifying an independent contractor

I have written several times about potential undesirable consequences of misclassifying an employee as an independent contractor. It’s time for an update.

In 2012, California Labor Code Section 226.8 took effect. That statute is directed toward willful (i.e., voluntary and knowing) misclassification of employees as independent contractors. Consequences can include the following. (more…)

Copyright: Why You Need Presence of Mind about Present Assignments

One page from a calendar

In Independent Contractors: How to Assign Copyrights, I provided sample language for an independent contractor’s assignment of copyrights to a client. This post explains why the present assignment aspect of that language is critical.

Here (with emphasis added) is the relevant portion of the pivotal sentence:

Contractor hereby irrevocably assigns, transfers and conveys to Client all of its right, title and interest in and to the Deliverables, including complete, unconditional and worldwide ownership of all intellectual property rights in any draft or final version of the Deliverables.

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Small-company CEOs Can Be Accused of Sexual Harassment, Too

Photo of Rita Risser

Rita Risser

I am especially pleased to welcome Rita Risser as a guest writer – not just because her post about sexual harassment is this blog’s first guest post, but because I have had the pleasure of knowing, and staying in touch with, Rita ever since we met at Boalt Hall.

As CEO of a small company, you may imagine that the recent resignation of HP’s CEO has no relevance to you and your organization. Think again.

Whenever employees or contractors are let go, they are more likely to bring claims for harassment, whistle-blowing and more. The worse the economy, the less likely they are to find other jobs and the more incentive they have to pursue alternative sources of income through lawsuits.

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If You See a Contract Like This, DON’T SIGN IT!

An acquaintance recently showed be one of the worst contracts I have ever seen – one of the worst in the sense of unfair and unbalanced, and perhaps even unconscionable.

The company in question provides contract personnel for IT projects. Here is the agreement that candidates have to sign to be proposed for a client’s project [emphasis added]: (more…)

Court Says Tech Startups Special re Works Made for Hire

In a recently-decided case (JustMed v. Byce), the U.S. Court of Appeals for the Ninth Circuit decided that a software developer was an employee, rather than an independent contractor, even though the parties had completed almost no employment-related paperwork.

Byce took over development of JustMed’s software from an employee who had moved out of state. Byce’s compensation – the same as his predecessor’s – was 15,000 shares of JustMed stock (valued at $0.50 per share) per month.

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Independent Contractors: How to Assign Copyrights

After reading If You Don’t Set the Terms of a Copyright License, a Court Will, a (non-lawyer) friend wrote: “I work with subcontractors on a regular basis in the creative area (photographers, graphic artists, website designers, etc.).? Do you know where I can find a sample [copyright assignment provision]?”

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