May 2010

Tech Startup Nightmare on My Street: How Lack of Written Documentation for Staff Developers Wreaks Havok

It's difficult to imagine a more frightening scenario for tech startup founders. Envision a small bootstrapped tech venture hiring a software engineer, with family connections and a proven track record of competence and trustworthiness, to perform coding work from his home in a remote out-of-state location. The engineer is paid solely in shares. He receives no benefits and no tax withholding occurs. No written agreement between the engineer and the company exists.

You work from home with your own computer? You are not paid cash salary or benefits or have taxes withheld? You're an EMPLOYEE!

It could be one of hundreds of similar situations that occurs every day in the Valley. A developer-founder paid only in shares, working from a remote (out-of-state) location, with no benefits, and no withholdings — and is ruled to have been an employee of his company for purposes of copyright ownership.

 

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