top of page

Labor relations with a programmer: nuances of the contract and compelling cases

Lawyers often face using standard templates of employment contracts by companies, even in relations with key employees. Such templates do not contain nuances that are important to consider when working with a programmer, for example, the transfer of copyright to intellectual property, non-disclosure clauses, and a detailed list of job duties.

When concluding a typical employment contract with a programmer, the employer risks losing intellectual property copyrights customers, profits, and the finished product.

The contract is the basis of labor relations in IT

A team of specialists is involved in the project through direct hiring or outsourcing. Still, in both cases, the employment contract is the basis of labor relations between the employee and the employer.

A common problem in the relationship between an employer and a programmer is copyright infringement and the illegal use of intellectual property. Sometimes, employees use the employer's intellectual property for personal purposes to make money "on the side" of competitors or create their own business. To avoid this, a comprehensive contractual framework is necessary, in particular, an employment contract, job description, and an agreement on the non-disclosure of commercial secrets.

A detailed list of duties

A clear definition of the job duties of the programmer in the employment contract will help to establish which work results in the creation of official work.

If a programmer creates a product outside his duties, even during working hours and using the employer's facilities, such work result does not belong to the company. If the employer needs to perform tasks outside the scope of the employee's duties, it is necessary to draw up a separate contract and transfer the result of the work through an act of acceptance and transfer.

Property rights to the intellectual property

It is necessary to establish the list of intellectual property rights and the moment of their transfer from the programmer to the company. The employment contract must contain a clause in which the employer can change, transfer, and dispose of the work results at his own will.

The employee receives an author's fee for creating intellectual property objects.

The order of its accrual, amount, and issuance methods are established by the parties' agreement and described in detail.

Working conditions of a programmer

Foreign IT companies have used remote work mode and personal work schedules for years. However, regardless of whether specialists are engaged remotely or work in the office, the employment contract establishes the following:

  • work schedule

  • vacation time

  • lunch breaks

  • options if the employee did not use vacation or weekend

Even in the case of remote work, the material and technical base for the performance of duties is provided by the employer unless otherwise stipulated by the contract.

Protection of confidential information

When a programmer is involved in a project, he gets access to confidential information. Therefore, a Non-Disclosure Agreement (NDA) is signed in addition to the employment contract.

The NDA contains the following:

  • a list of information that is considered confidential

  • the rights and obligations of the programmer when accessing data

  • the period of limitation of distribution of information after dismissal

  • liability for information disclosure or unauthorized access

  • compensation procedure

You can add non-compete and non-solicitation clauses — a temporary ban on working in specific areas and soliciting clients. The detailed definition of these points is essential: the courts have a negative attitude to general wording.

Pay enough attention and time to correctly draw up and execute employment contracts to avoid future risks.

Below, we have provided several examples of situations where a sufficient contractual basis mattered.

Interesting cases

Case number 1

A logistics company turned to a development studio to create a mobile application. After discussing the nuances, the parties signed a contract for 300,000 euros.

After the start of the work, the customer once again considered the conditions and decided that the price was too high. He directly addressed the programmer who headed the project — offered 70 thousand euros for the completion of the mobile application and a permanent position in the staff.

The customer and the executor terminated the contract. The logistics company paid 15,000 euros for work already done. The programmer resigned and finished the application development, thus violating the intellectual property rights of the development studio.

In the employment contract between the studio and the programmer, the employer stated that the results of the employee's activity, which arises during work within the limits of the tasks from the employer, are considered official work. Intellectual property rights to it belong to the employer.

The actions of the programmer caused damage to the development studio. A trial began, in which it recognized these actions as illegal. The trial imposed a fine, and the programmer handed over the finished mobile application to the rightful owner.

Case number 2

A developer of a large company created an application that the company used as a base for its operations. After two years, he decided to quit and start his own business.

In the employment contract with the programmer, there was no clause on transferring rights to the created program, so the intellectual property rights belonged to him. The developer offered the former employer a license agreement under the terms of a simple, non-exclusive license for non-commercial use.

The programmer's copyright sign was removed from the code within a year. The program developer believed the rights were violated and appealed to the court. The court established that the program was used for commercial purposes by several companies. The court ordered the former employer to stop illegal actions and pay three sums in favor of the programmer:

  • to remove the copyright symbol from the code

  • to play the program

  • and to provide commercial access to a copy of the company's server

Case number 3

A network security company filed a lawsuit against a small LLC that engaged in similar activities. Content of the case — the LLC uses technologies that belong to the plaintiff.

Former employees of the company founded the defendant company. At the time of the founding of the LLC, they were still working for the company. The court established that the employment contracts of the employees contained clauses on the transfer of rights to the official work to the employer. In addition, the contract had a non-compete clause, which prohibited employees from engaging in similar activities independently or as part of a competing firm for three years after dismissal. The plaintiff provided evidence that the programmers received significant monetary compensation upon dismissal for the non-compete clause.

The programmers from the LLC had no right to use the plaintiff's technology without permission. The court also considered the compensation payment for non-compliance with the non-compete clause. Therefore, for the violation of intellectual property rights, the LLC paid a fine in favor of the company, and due to the non-compete clause, the programmers sold their shares in the company.


bottom of page