No Contract

[greenjeans]

No Contract- UPDATED

What is the name of your state? Texas
Recently the trucking company I was contracted to work for, auditing daily logs and maintaining a web database, was bought out. As of July 1, 2003 the company no longer existed and the new company now owns everything. Now, we have no written contract about how long we would work for the original company but there was a “gentlemen’s” agreement that either party would give 30 days notice of termination. It was basically if they sent the logs, we did the logs and all information for the database came from our audit of the logs. Today the new company agreed to pay us for the month they did not give us notice for but then rescinded saying there was no agreement so they don’t have to pay. But there is the issue of all data in the database; can we make them pay for the data? All the data is on each of the logs and they can, just as easily as we did, audit them and get the exact data. All we did was put it in a convenient and easily read form. They were very interested in the website and before the deal went down the old company shut off all their access due to concerns of them copying the database’s formulas and queries.

So my basic question is, do I have to give them the data or can I make them pay for the data and/or the time it will take to pull it out our would that be extortion? What about the 30 days advanced notice? We were told it would be business as usual and then, it wasn’t.

Thank you in advance.

 

[badtenant]

Couple of question, how were you paid? on the old comapnies payroll with taxes being taken out, or as an independant contractor on a 1099?

If you were an actual employee, getting paid a regular check, then the data belongs to them.

If you are a 1099, then whose website its it on? the companies? yours?

What i am probably getting at is: its their data, but you may have to give them access to the website, and any extra work that is requred they must pay you to do it.

so you need to explain who owns what and how you were paid.

 

[greenjeans]

I was considered an "independant contractor" and paid my own taxes and recieved a 1099. The website is owned by my company and they paid us for the access. I might also add that the old company was paid up until Sept. 1st but before the deal went through they, not us, shut off everyone's access. There is a standing directive that all access has to be approved from a certain person at the old company (not us) and he isn't letting anyone through. It is a daily occurence when someone from the new company calls requesting access to the site. I believe it is in the buyout contract that access has to be obtained through him.

Thank you for the quick reply!

 

[badtenant]

So its on YOUR website but they have access till Sept 1st.

So what you did is instead of auditing the long way by hand you devised a program to make it easier on yourself to do the job. And you billed them for less hours then normally it would have cost them the other way?????

So i guess you want to know is after Sept 1. can you shut down the website and throw away the data, if they dont pay you anymore?

Maybe that is their plan. They know that unless they pay you, the data might be unavailable after Sept 1st. Then you can change the password, or change the location, so only you would have access to it. Just dont delete the data.

Then you can make any deal you want with the new company over the data. Its their data, and if they want it bad enough they will pay you to retrive it After Sept 1st.

As long as they are paid up with you till sept 1st, then the directive must stand.

 

[hexeliebe]

So i guess you want to know is after Sept 1. can you shut down the website and throw away the data, if they dont pay you anymore?

ANSWER: WRong! The data is company-owned. You only own the website and any and all code used to produce the data in the form required by the client.

As long as they are paid up with you till sept 1st, then the directive must stand.

ANSWER: Correct or Incorrect, depending on the contract for sale between the two businesses. If you get another inquiry you need to tell them they must resolve the issue with the old company since you are not privy to the contractural arrangements between the two parties.

Be very careful. Although you had a 1099 relationship with the old company, anything produced for them under the old relationship is considered 'work-product' and owned by the company.

Now, we have no written contract about how long we would work for the original company but there was a “gentlemen’s” agreement that either party would give 30 days notice of termination.

ANSWER: That's not the important point here. The question you need to answer is "did you have a performance contract with the old company? If so, you need to re-read it. The new company, unless it has an idiot for an attorney, has bought not only the old company, but also all assets of the company, including all contracts. And that means you.

Also, in your contract (if it exists) with the old company, did you design and develop the website to handle their data or was it an ASP (application service provider) arrangement in which you included the old company's data? This makes a BIG difference.

There are many other issues you need to address before moving in any direction. Just because you were 1099 doesn't mean that the data and/or website is your property. 1099 is simply tax standing, not legal standing for ownership.

 

[greenjeans]

I don't believe the website is company owned, it was designed before we started working for them. That's how it started, we had this website and we did the data thing, then the old auditor tragically died of food poisoning and we took over "temporarily" and just kept doing it because we undercut almost everyone. Although we added stuff to the website for the company (driver files with their info and stuff) we were never paid for the designing. They simply said, "wouldn't this be nice?" So we would design it and they would pay us to have access to this new feature.

Hexe, thank you for the reply. Here are some answers. It is an ASP and there was no performance contract or anything. I guess after three years no one really thought about it since we never had any problems. They also didn't want to get stuck in a contract if they were having safety problems and needed to switch.

On top of this data, I have about 4 months worth of their logs sitting in my house. that's 120,000 pieces of paper that if destroyed will land me a really nice fine or possibly prison time. I just want some closure to this all so I can move on. It's not easy to one day be planning the opening a new division and get excited about the extra income and the next watch your company go down the toilet because of some "super company."

 

[hexeliebe]

It's still not clear so I'll ask straightout...

Did the website exist under your license before even having conversations with the company or did the company have the website and ask you to take it over.

The answer to your question will determine who owns it.

As for the changes suggested by the company, if this was your website before initial conversations with the company, then any changes or modifications to the site at the suggestion of the company still reside with you but the changes as suggested by the company are simply modifications to solicit new business.

As for the logs and other paperwork, write the new company and ask them what they would like done with the materials as of Sept. 1, 2003. Send it registered, return receipt requested then do as they suggest come Sept. 1.

 

[greenjeans]

Yes the website existed before they asked for our services.
The new company's legal team understood that and the fact that the old company only paid for the access.

The legal team also was told about the 30 days notice thing. That's why they agreed to pay it. We have a meeting on Monday to discuss this issued. I have a feeling I'm gonna be out over 6 grand for this month simply because, even though they call everyday we were never told that our services are no longer needed.

 

[hexeliebe]

Then contact the new company as I suggested with a Sept. 1 date of turnover pursuant to existing obligations and get what the new company wants to be done with the logs and data in writing. Then execute on Sept. 1.

 

[greenjeans]

Thanks for being so helpful. It's much appreciated.
One last question, since they own the data, can I charge them for the time it takes to extract the data? We're talking massive amounts of data.

The sad part is that they only want the data so they show how "safety oriented" their becoming. They bought out a company that was one of the safest rated companies in the country. The new company, dead last every year. I've worked my butt off for this company for several years now and DOT has audited their paperwork once in that entire time. I found more violations than the DOT did.

Thank you again

 

[hexeliebe]

They own the data. As for charging them for extracting it, that's a good question and one I'm not qualified to answer. Of course, you can always ask for a specified amount. It wouldn't hurt.

 

[greenjeans]

I'm off

alright, i'm off to go and talk to them. Any last minute advice?

 

[hexeliebe]

Just let them know you are seeking a solution to the situation but cannot involve yourself in the legal matters between them and the old company. After Sept. 1 you are open to any suggestion.

 

[greenjeans]

Update

Talked to them today in a conference call. Things got kinda nasty. We sent them our contracts and they sent us a ''revised" contract. We asked for $10,000 and they responded with $500. Slap in the face.

I have some questions about their contract.
Is it common to have the clause "The company A data delivered to company A will not contain any trademarks, service marks or logos."

Now that, I know what they want I would like to ask the original question again. They want the employee files, accident reports, inspections (which we don't have) and motorist complaints. They have all of that in paper form already. Do I have to hand it over?

This is rather confusing and frustrating.

And thank you hexe for your previous answers. They are greatly appreciated.