Question

In IRAC Form

Clifford Aymes was hired by Jonathan Bonelli of Sun Island Sales, Inc., to create a computer program for Sun Island to use in maintaining records of its cash receipts, inventory, sales, figures, and other data. No agreement was reached as to ownership rights in the program that Aymes developed, called CSALIB. Aymes did most of his programming at the Sun Island office. Although Bonelli gave Aymes frequent instructions as to what he wanted from the program, Aymes generally worked alone and enjoyed considerable autonomy in his work. He worked fairly regular hours, but he was not always paid by the hour—occasionally, he submitted bills (invoices) to Sun Island for his work. Aymes never received any employee benefits, such as health insurance, and Sun Island never withheld federal and state taxes from Aymes’s paycheck; nor did it pay any Social Security taxes on Aymes’s earnings. When Bonelli unilaterally cut Aymes’s hours in violation of an alleged oral agreement, Aymes left Sun Island and demanded compensation for Sun Island’s use of CSALIB. Bonelli refused to pay Aymes for the program’s use and also stated that he would not pay Aymes $14,560 in back wages unless Aymes signed a form releasing all rights in CSALIB. Aymes then sued Bonelli and Sun Island for copyright infringement, and the court had to decide who owned the copyright in the program. Central to the determination of this issue was whether Aymes was an employee of Sun Island or an independent contractor. What should the court decide, and why?

Answer 1

In this case, it is important to look at both the fact that whether or not, Aymes was employed with Sun Island and the copyright issue which is coming into play as the product CSALIB has been created by Aymes himself.

In the first section we would have to differentiate between the difference between employment and independent work as a contractor. The employment regulations are covered under Employment Rights Act (Also referred to as ERA) and was established in the year 1996.

This regulation is what helps courts in differentiating between employment and contractual work as an independent contractor. Here, courts usually look into the social security contributions made by a company and other factors such as income tax deductions and whether or not the same salary was paid during the employment time period.

In this case, since Aymes was never paid salaries which were regularly credited into his account nor was there any social security contributions made by Sun Island. Therefore, the court would rule Aymes as an independent contractor. This is primarily because a direct channel of employment in this case is never established. The employment never came into existence and even the verbal contract in itself was subject to creation of a software only which would be looked at as contractual work only.

Further, a copyright is an exclusive right which is given to the creator of a new invention. In this case, the court would look into the employment aspect and rule that the employment never existed.

In that circumstance, the Software would be the exclusive property of Ayme's and all obligations decided during formation of the contract should be paid by Sun Island until which the copyright would remain why Ayme's respectively.

Please feel free to ask your doubts in the comments section if any.