Works Made for Hire

Reid Agency Factors Applied to Freelance Software Developers

Whether a work is made for hire turns first on whether its creator was an employee or an independent contractor under the general common law of agency. Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). The touchstone is the hiring party's right to control the manner and means by which the product is accomplished, informed by a non-exhaustive list of factors — the skill required, the source of tools, the location and duration of the work, the right to assign additional projects, the method of payment, employee benefits, and tax treatment. No single factor decides the question.

Counting the factors is not enough: they "should not merely be tallied but should be weighed according to their significance," Aymes v. Bonelli, 980 F.2d 857 (2d Cir. 1992) instructs, and five will almost always prove highly probative — the right to control the manner and means of creation, the skill required, employee benefits, tax treatment, and the right to assign additional projects. Aymes himself, a skilled programmer who received no benefits and whose payroll taxes were never paid, presented what the Second Circuit treated as "virtual admissions" of contractor status; his program was not a work made for hire.

Graham v. James, 144 F.3d 229 (2d Cir. 1998) applied that weighting six years later to a programmer engaged project-by-project: with no benefits and no payroll taxes withheld, he was an independent contractor, and the hiring party's general control could not tip the balance where its participation in development was minimal and its instructions very general.

Nor is the pattern confined to the Second Circuit. A highly skilled developer who kept consulting for other companies — and once unilaterally hired a subcontractor — was an independent contractor who owned the program he wrote: the hiring party never provided benefits or withheld payroll taxes, and, as the Eighth Circuit observed, every case since Reid has found contractor status where benefits and social security taxes were absent. Kirk v. Harter, 188 F.3d 1005 (8th Cir. 1999). A developer who worked through his own consulting corporation fared the same way: the corporation invoiced weekly and handled his payroll, taxes, and benefits, while he supplied much of his own equipment and coded primarily at his own office on his own schedule. Numbers Licensing, LLC v. Bvisual USA, Inc., 643 F. Supp. 2d 1245 (E.D. Wash. 2009).

JustMed, Inc. v. Byce, 600 F.3d 1118 (9th Cir. 2010) pushes the other way. A remote developer was an employee, the Ninth Circuit concluded, in light of the hiring party's character as a technology start-up: the relationship ran indefinitely rather than toward a discrete deliverable; a regular monthly salary, even one paid largely in stock, weighed heavily toward employee status; loose supervision meant little for an inventive programmer expected to work independently; and the absence of benefits and tax withholding reflected start-up informality, not contractor status.

For freelance developers, the throughline is that the formal indicia — benefits and tax treatment — usually defeat work-made-for-hire claims, while integration into an informal start-up can flip the result. Even a finding of contractor status does not end the inquiry: a commissioned work can still qualify under § 101(2), but only if it falls within one of nine enumerated categories and the parties expressly agreed in a signed written instrument. Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).