Parting With an App Developer | App Development Contracts


Dismissing someone from a job is one of the most unpleasant tasks you can face as an employer. With a few words, you’re impacting someone’s self-esteem, financial security, and future. Naturally, emotions can run high with so much at stake, and too many employers make the mistake of jumping into the fray. The problem with sloppy, less-than-amicable terminations is that they may leave you legally and financially vulnerable.

No matter how justified your decision is, you don’t want to approach the termination process haphazardly. Read on to learn how to let an app developer go as professionally and efficiently without jeopardizing your business.

Preparing to Terminate

Think of termination as a process and not an event. Firing your app developer should be the last event in a thoughtful, well-reasoned process. Adequate preparation will help you remain level-headed during the interaction.

The requisite preparation will depend on whether your app developer is an employee or a party to a client/developer contract. Before you fire an employee do your best to make sure that doing so won’t violate any of your company’s policies or applicable laws (e.g., discrimination laws). If the employee falls within a protected class, you’ll do best to contact an employment attorney as soon as possible. If your attorney authorizes the termination, or you’re confident in the conclusion from your research, move forward by pulling the developer’s personnel file and holding a meeting. If the termination is unrelated to performance, make sure you’ve had documented conversations with the developer beforehand about the reason for letting him/her go.

The pre-termination homework is a bit more intensive for contractual client/developer relationships. If you and your developer have signed an app development contract, review that document thoroughly. Make sure that you have performed all your duties under the contract; otherwise, you may invite a claim that you breached the contract. You may also want to review the developer’s past performance so you have articulable reasons for your decision to terminate him. An objective decision is far less likely to create bad blood and can help preempt objections.

Getting Your Code: Possession and Ownership

The biggest risk in parting with an app developer is losing the app itself. What happens to your app’s code largely depends on the agreement you made with the developer, such as a simple work-for-hire agreement or an assignment. A pure work-for-hire agreement may not be sufficient to grant full ownership of the app to your company.

Your agreement with the developer likely needs assignment language to give you full rights to the code. An assignment clause compels the developer to assign the client rights to the app if it does not qualify as a work made for hire. Without work-for-hire status or assignment language, you will likely end up sharing ownership with the developer 50/50.

Performing a software code audit is a good idea before you take physical possession of your app’s code. A code audit will determine what is in your app, thereby clarifying what belongs to you and what, if anything, belongs to the developer. A code audit will also establish licensing, authorship, security breaches, and copyright restrictions on any third-party content within the code.

Drafting a Release

A termination and release agreement can help forestall conflicts and misunderstandings in the future. Typically, such an agreement will definitively terminate the client and developer’s commitments to each other. No agreement can make you immune to future liability, but a well-drafted termination and release agreement will provide a solid defense to any claims that arise.

The terms of the termination agreement will depend on the terms of the original agreement. The termination agreement will explicitly discharge both parties’ responsibilities under the original agreement. You may also include a mutual release of liability. Such a release discharges you and your app developer of all liabilities arising from your original agreement. That means you both agree not to sue each other for any outstanding obligation, including payments, under the original agreement.

The agreement can also provide for final payments, assignments of rights, code transfers, and other loose ends. For example, you might protect your rights in the app by making the developer’s final payment contingent upon the valid assignment of the app’s code copyright (if the original agreement gave you that right).

Communicating with the Developer

How you deliver the news of termination can profoundly influence the amount of backlash you receive. While sugar-coating the truth is counterproductive for both parties, a certain level of respectful decorum can help defuse a potentially volatile situation. Here are a few tips to help you make termination as amicable as possible:

•    Terminate the developer in a private space to preserve confidentiality.
•    Be direct; let the developer know immediately that you are terminating him or her.
•    Briefly explain your reasons as sensitively as possible.
•    Avoid trying to justify your reasons; it will only hurt or incite the developer.
•    Listen, but don’t react.
•    Answer any questions.
•    Have the developer sign any termination and release papers.

Firing someone is never easy, but the cutthroat app industry often necessitates it. Following these guidelines will help you part ways with your app developer without creating ill will or subjecting your company to legal and financial risk.

This is not a comprehensive guide for terminating employees or contractors. Further, this is not tailored to your situation. If you are considering terminating an employee or contractor, you will de best by contacting employment counsel.