How do you do employee agreements? (re: employee vs owner classification)

We had our first client (USA-based) become a bit nervous about working with a co-op organization (us, Canada-based) whose developers had not signed employee agreements. They were worried how we could ensure that copyright of produced code could be properly assigned to them as client.

Anyhow, it seems that there’s a whole conversation about whether a worker co-op chooses to classify everyone as owners or employees: https://www.co-oplaw.org/legal-guide-cooperative-conversions/employment-law-worker-cooperative-conversions/

What have others chosen to do, in regards to classifying members as owners vs employees? When did you choose to start doing it that way? And have you experienced any issues with client relations or legal edge-cases, one way or the other?

Thanks! Any context appreciated!

Shouldn’t these copyright transfers be defined in the contracts between your business, and your business’s customers?

If the copyright transfer is explicitly laid out in the co-operative-customer contract, then they won’t have to worry.

Still an interesting question though.

Thank you for sharing. :smiley:

Anyone else had customers asking questions that wouldn’t be asked about a company-customer contract?

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More thoughts.

The issue would be whether the co-op had the legal right to make the copyright transfer.

There needs to be an explicit layout of the different hats that everyone is wearing, one legal relationship for the co-op member as “employee-of-the-co-operative”, and the other legal relationship for the co-op member as “joint-owner-of-the-co-operative”.

Making those different legal relationships explicitly clear would go a long way towards clearing up any legal issues that may arise.

More L’Esprit D’Escalier:

Would the customer have a problem if the contract was with a Ltd.Company, where employees owned equity?

If not, then NP.

We have signed contracts with customers, detailing a section on the ownership of the code developed, and a commitment of the company to release the developed components. It has also happened to us that several clients get a little nervous about working with a cooperative organization and have demanded a lot of effort in meetings and negotiations to explain the work format and objectives of the cooperative company.

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Thanks! My concern (maybe unfounded) is how rights are formally transferred from developer to agency, so that the above contract would be valid. I’ve always known this to happen in employee agreements. But as owners, it seems we don’t need those agreements per se.

The article I linked above seemed to imply that creating employee agreements might convert us legally from “owners” into “employees”, which might carry an extra compliance burden we don’t wish to shoulder…!

So I was curious what internal agreements others had signed within their co-ops, or whether none at all :slight_smile:

Do any co-ops here fall under (or voluntarily comply with) legal obligations for employees, or do you consider yourselves outside those as owners?

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I would say that rights of ownership, use, etc over the products of the work are separate from the status of the people doing the work. As I understand it, common practice is that the client wants total control over the goods and services they have purchased. But there’s nothing to say you can’t do it another way. Maybe you provide the client with the code (or whatever it is that you’ve made for them) and they have a perpetual licence to use that and do what they will with it, but ownership of the intellectual property rests either with the co-op or the worker/s. I’m doing some work using the Fareshares model at present, and that says that ownership rests with the worker (the creator) and the co-op has an exclusive right to use the work. When/if the worker leaves, ownership is then shared between the co-op and the worker, and the co-op has a non-exclusive right to use the work. Fareshares doesn’t currently address the scenario where the customer might want ownership.

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Ah sorry, I think there is a misunderstanding, and in retrospect, it may have caught @jose.fantasia as well.

This is work for a VC-funded for-profit startup building on a decentralized project (as a funding model for that same project). We don’t wish to own their code, and alternative models aren’t tenable for this contract, unfortunately.

Having said that, the Fairshare model looks super interesting! Just that we’re not in a position to explore it here :slight_smile:


We’re curious about the much more standard case where a client wants to own the code (and we have no issue with that), but we’re reluctant to sign worker-owners under employment agreements that the client would otherwise expect to cover their concerns. Anyone have experience with that line of thinking? (omg, I am so grateful for y’all putting your brains to this so far!) :raised_hands: :raised_hands: :raised_hands:

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We avoided this problem, because all of our members have been employees from the start. This has meant we can hire new staff with a probation period before membership. Also, the flip side of obligations as an owner is that you as an employee get the corresponding rights and guarantees.

We also don’t have anything in our Terms of Employment about copyright, because in the UK works created “in the course of employment” are automatically owned by the company. https://www.gov.uk/guidance/ownership-of-copyright-works#works-created-for-an-employer

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Thanks Ben! That is super helpful context on UK.

And I really respect the “employees from start” thing, even if we prob can’t meet it yet