Ex-employee of my flower shop used to be a key designer and helped with actual floral projects has now started her own company. Ex-employee is now using pictures of projects/product that was done by her while working for my company and now has them posted with her new company. These pictures are part of her company portfolio to sell projects/product. Do they have the right to use the pictures when the projects were completed while employed with my company? Ex-employee used her own camera to take photos while on the job at my company. Also, how do I protect myself from this happening with other employees?
The answer will depend, but here is how I see the argument in your favor. Under US law the copyright interest in creative works such as designs and photos belongs to the employer when the work in question was done by a bona fide employee (meaning on your pay roll and not an IC) and within the scope of their employment. If the ex-employee did this routinely as part of her job and it was obvious that the pictures were taken for the purpose of promoting your shop then I would argue that all the IP in them has passed to you as the employer and you can demand that this competitor and ex-employee no longer use them.
I would add that there may be facts and circumstances unknown here that may make a difference. Further, this is in no way the type of case that will be worth you investing much in. That is, this is not a big award kind of matter and the cost of copyright litigation is very high.
I think you should discuss it over with a lawyer in private to arrive at a best course of action. Most of us here, including myself, offer a free phone consult.
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Contracts / Agreements Lawyer
It is very likely your company owns the copyright on the photos the ex-employee is using.
Whether or not the ex-employee used their camera or a company camera is not relevant. what is relevant is whether this was part of their job, and if they were a real employee or an independent contractor.
You can protect yourself by having a contract that explicitly states pictures taken on the job are the property of the company. This will not prevent ex-employees from attempting the same thing in the future, but it will clear up the ambiguity of who own the photos.
Consult with an attorney in your area to confirm.
Workers' Compensation Lawyer
I think you should consult az business atty asap.