## Facts

- Island Recreational, a retail chain selling swimming pools and supplies, hired Clifford Scott Aymes in May 1980 to perform computer programming work.
- From 1980 to 1982, Aymes wrote a suite of programs known as “CSALIB,” used to track cash receipts, inventory, sales, purchase orders, merchandise transfers, and price changes.
- Aymes did most programming at Island’s office using Island’s computer hardware, generally working alone and without assistants.
- Bonelli gave functional direction about what Island wanted the program to do but lacked the technical skill to supervise how Aymes wrote the code; Aymes had substantial autonomy in creation.
- Aymes worked semi-regular hours; payment varied, including hourly compensation at times, invoicing, project-based pay, and bonuses for timely completion.
- Island provided no health or insurance benefits to Aymes, did not withhold federal or state taxes, and did not pay the employer share of payroll taxes; Island reported compensation on IRS Form 1099.
- No written agreement assigned or transferred copyright ownership in CSALIB; Aymes claimed an oral limitation on use to one computer in one office.
- Aymes sued for copyright infringement; after a bench trial, the district court dismissed, holding CSALIB was a work made for hire because Aymes was Island’s employee.

## Issues

1. Whether Aymes was an “employee” under 17 U.S.C. § 201(b), applying the common-law agency factors of *Community for Creative Non-Violence v. Reid*, such that CSALIB was a work made for hire owned by Island.
2. How the *Reid* multi-factor test should be weighed in the software-programmer/business-client context when factors point in different directions.

## Decision

- The Second Circuit reversed the dismissal and remanded.
- Applying *Reid*, the court held Aymes was not Island’s employee for § 201(b) purposes when he created CSALIB.
- Because Aymes was an independent contractor and there was no written agreement transferring ownership, CSALIB was not a work made for hire owned by Island by operation of law.
- The district court erred by overemphasizing on-premises work, use of Island equipment, and semi-regular hours, and by giving insufficient weight to tax treatment, lack of benefits, skill, and autonomy.

## Legal Principles

- Under 17 U.S.C. § 201(b), an employer is deemed the author of a work prepared by an employee within the scope of employment unless the parties agree otherwise in a signed writing.
- Employee status for § 201(b) is determined under common-law agency principles using the nonexclusive factors identified in *CCNV v. Reid*.
- Not all *Reid* factors carry equal weight in work-for-hire disputes; courts may treat certain factors as especially significant, including:
  - hiring party’s control over the manner and means of creation,
  - skill required,
  - provision of employee benefits,
  - tax treatment of the hired party,
  - right to assign additional projects.
- Independent-contractor tax treatment (no withholding; no employer payroll taxes; Form 1099) and absence of employee benefits are strong indicators against employee status, even when work is performed on the hiring party’s premises using its equipment.

## Conclusion

The Second Circuit held that a highly skilled programmer who retained substantial autonomy and was treated as a contractor for taxes and benefits was not an employee under § 201(b); absent a written transfer, the software was not a work made for hire, requiring reversal and remand for further proceedings.


Aymes v. Bonelli, 980 F.2d 857 (2d Cir. 1992)