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Legally Binding Work for Hire Agreements

By Brian K. Scott

Work for Hire (WFH) agreements are well-known legal-binding contracts between employers and freelancers in which the employer retains the copyright and ownership of any "works" specified in the contract.

A common situation is when an individual or a group of individuals produce a piece of creative work, such as articles or digital designs. U.S. Copyright laws automatically recognize the creator of the work as the copyright owner; however, the opposite happens under a "work for hire" arrangement. U.S. Copyright laws recognize the employer as the sole creator of the work and the freelancer as a contributor or an "employee" (if only temporary).

WFH agreements are becoming more common in the business world for the simple fact that companies want to retain ownership of their works. Complete ownership means companies can keep generating revenue from such works without paying royalties. For any WHF agreement to be legally-binding, both the company and freelancer must sign and date the contract, acknowledging all terms and rights.

If you freelance, the main disadvantages of this type of work arrangement are that you do not retain rights to what you create, you cannot license non-competing rights to the work, and you cannot demand your rights to revert to you. You are prohibited from modifying it, reselling it, or using your work because it is no longer yours.

Freelancers may encounter work-for-hire jobs from all types of businesses in different industries. Such jobs are common in copywriting, graphic design, computer programming, and newspaper reporting.

Here are a few personal tips from my own experience as a freelancer.

1. Make sure the WFH Contract contains a clause stating that the client does not own the work until the freelancer has received full payment. Clients might attempt to pay for half of the work and still retain all rights; it simply cannot work like that.

2. Not every WFH job warrants you to use all of your creative ideas to produce the work, especially if you want to use these ideas for yourself or for future projects. The client has the right to sue you for infringing on his or her copyright if you create a similar piece of work for somebody else.

3. Never work on your own materials while using the client's computer or other equipment. Your client may try to claim copyright because you've created something with the company's property.

4. If possible, try to opt for a revenue-sharing agreement with your client. This is difficult for small-time projects, but if a client hires you to write daily blog posts, ask if he or she can pay you royalties based on page views, especially if he or she is greatly profiting from your posts.

5. If the employer fails to pay you for your work, then the agreement becomes void and you retain ownership of your work. Copyright to your work should only transfer to the employer if all terms in the agreement are met.

I've created a sample work for hire agreement and a free infographic at my blog Creative Genius 101 to help you understand the different sections and legal language used for this type of contract.