As an employer, you will naturally want ownership over the works you pay your employees to create. However, are you aware of the difference between works created by employees and those created by independent contractors? Employee-created works are considered “works made for hire” and are presumed to be owned by the employer. On the contrary, in order to qualify as works-for-hire, anything created by an independent contractor must fall into one of the following nine categories as defined by the U.S. Copyright Act (17 U.S.C. 101, et al.):

• Translations
• Contributions to a motion picture or other audiovisual work
• Contributions to collective works (e.g. magazines or books)
• Atlases
• Compilations
• Instructional texts
• Tests
• Answer material for tests
• Supplementary works (i.e., forewords, afterwords, charts, illustrations, editorial notes, bibliographies, appendices and indices).

Since the Copyright Act expressly states that works prepared by employees within the scope of their employment are automatically considered to be “made for hire”, no written agreement is required by law. However, it is still advisable to include language clearly stating that all work created by employees will be considered “made for hire” and that you, as the employer, will be considered the owner.

An employment agreement should also contain confidentiality clauses stating that, if employment ends, employees will maintain strict confidentiality with regard to your company’s proprietary information.

Finally, in order to protect trade secrets and other sensitive information, you should include a non-compete clause in which employees agree that they will not work for or do business with any company that is in competition with your own for a set period of time.

If you fail to include confidentiality and non-compete clauses, you could find yourself in a situation where your employees go to work for your competitors armed with your proprietary information.
If employees are made aware of the rules from the beginning, your assets will be protected and the likelihood of future conflicts will be lessened.