[METIP #17] Adopting MetricsDAO Contractor Policy

MetricsDAO Governance
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Intro:

METIP#17

Title: Adopting MetricsDAO Contractor Policy

Author(s): naan#1447, GJ | Flipside#1919, imaaronlamphere#8577

Type: Social

Dependencies: n/a

Replaces/Amends: n/a

Short Summary:

To follow legal standards, MetricsDAO must create a Contractor Policy that defines the relationship between MDAO as an entity and an independent contractor that the DAO has engaged.

Motivation:

See above

Proposal Details:

As a legally incorporated Delaware non-stock non-profit corporation, MetricsDAO Assoc needs to create a Contractor Policy. This policy is broad, but covers topics such as the obligations of the contractor, their legal status, the period of engagement, and who has control over things that may be created during their work. If needed, this policy may be amended at any time. The full policy can be found in the document linked below.

References:
Original document:

Version of the original document with most of its text replaced with plain English. Posted in this thread and on Discord on 4/12/23. Edited into main post on 5/13/23.

First document with questions sent to legal. Posted in this thread and on Discord on 4/24/23. Edited into main post on 5/13/23.

Second document with questions sent to legal. Posted in this thread and on Discord on 5/8/23. Edited into main post on 5/13/23.

Voting Outcomes and Next Steps:

Yes: Adopt this version of the MDAO Contractor Policy

No: Do not adopt this version of the MDAO Contractor Policy

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Contractor shall be responsible for all costs and expenses incident to the performance of services for MDAO, including but not limited to, all costs for equipment provided by Contractor, all fees, fines, licenses, or taxes required of or imposed against Contractor and all other of Contractor’s costs of doing business.

@Sunslinger I think we reimburse gas fees right now for people that are signing transactions from the multisig, would this mean that we can’t do things like that anymore?

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Naan, good call out! Should add a statement that MDAO can choose to reimburse.

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  1. In section 1: “In case of a conflict between the applicable Word Order and this Policy, the terms of the Word Order shall prevail.” What is Word Order? Is this meant to be “Work Order”? Small change but does a thing to the meaning.

  2. Does the topic of Contractors in the context of badging and governance fit in here, or should that be a separate proposal? I.e. proposing to define the Independent Contractor onchain badge as a non-voting one, separate from Season Contributor badges eligible for temp check voting.

  3. This one is not a question but I love that the #daoing-in-public Discord channel is the official notices channel, and how that reflects on the strength of our transparency and, well, DAOing in public!

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As Marina pointed out, looks like the writer made a typo. They wrote Word Order instead of Work order.
Work Order might also be incorrect. The Work is given to the Contractor using a Statement of Work. The term “Work Order” is new and not defined in the document. The clauses that mention Work Oders might not be legally binding if no Work Order is given to the Contractor.
Better to use the same term everywhere in the documents.

The following modification will ensure consistent terminology is used.

At: Article 1 Terms of Service

Delete: The scope of services, compensation and other terms of engagement between MDAO and each Contractor shall be set forth in a Statement of Work (“Statement of Work”) approved by MDAO and such Contractor. In case of a conflict between the applicable Word Order and this Policy, the terms of the Word Order shall prevail.

Insert: The scope of services, compensation and other terms of engagement between MDAO and each Contractor shall be set forth in a Statement of Work (“Statement of Work”) approved by MDAO and such Contractor. In case of a conflict between the applicable Statement of Work and this Policy, the terms of the Statement of Work shall prevail.

At: Article 7.2 Entire Agreement of the Parties.

Delete: (…) Each party acknowledges that no representations, acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Policy or the applicable Word Order shall be valid or binding. (…)

Insert: Delete: (…) Each party acknowledges that no representations, acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Policy or the applicable Statement of Work shall be valid or binding. (…)

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I’m not a lawyer none of this is legal advice

  1. “(c) immediately upon written notice by MDAO to Contractor; (d) upon 10 days prior written notice by Contractor to MDAO” - its a bit friendlier to make this even; either both parties can terminate immediately or both have to provide the same notice.

Even better if it’s clear that termination is primarily related to failure to deliver not arbitrary: “Either party may terminate this Agreement, effective immediately upon
written notice to the other party, if (a) the other party breaches any provision
of this Agreement and fails to cure its breach, or if the breach is incapable of
cure, within seven (7) days, or (b) for any or no reason upon thirty (30) days’
prior written notice to the other party, in the event of which all planned work
and payments due to the Service Provider during the notice period will
remain in full force and effect, and any planned payments due thereafter are
expressly null and void.”

  1. It’s nice to have a statement like this to make it clear: “Both the Company and the Service Provider acknowledge that this
    Agreement does not create an exclusive relationship between the parties.
    The Company is free to engage others to perform services of the same or
    similar nature to those provided by the Service Provider, and the Service
    Provider shall be entitled to offer and provide services to others, solicit other
    clients, and otherwise advertise the services offered by the Service Provider.”

  2. Perhaps for further clarity/CYA: “The Service Provider is an independent contractor of the Company, not an
    employee of the Company. Nothing contained in this Agreement shall be
    construed to create the relationship of employer and employee, principal and
    agent, partnership or joint venture, or any other duciary relationship. The
    Service Provider shall have no authority to act as agent for, or on behalf of,
    the Company, or to represent the Company, or bind the Company in any
    manner.”

  3. Severability is v common for agreements like this: “Severability. If any term or provision of this Agreement is held to be void or
    unenforceable, that term or provision will be severed from this Agreement, the balance
    of the Agreement will survive, and the balance of this Agreement will be reasonably
    construed to carry”

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Does the topic of Contractors in the context of badging and governance fit in here, or should that be a separate proposal? I.e. proposing to define the Independent Contractor onchain badge as a non-voting one, separate from Season Contributor badges eligible for temp check voting.

I was planning to keep them as separate proposals, this one would cover legal and the other operational. The thinking was I wanted to have a solid base for the idea of an MDAO contractor before we started doing internal changes, but there’s no reason we can’t get an informal discussion thread up about the badges and we can turn it into a full proposal once this one is processed.

What is Word Order? Is this meant to be “Work Order”?

They wrote Word Order instead of Work order. Work Order might also be incorrect. The Work is given to the Contractor using a Statement of Work. The term “Work Order” is new and not defined in the document. The clauses that mention Work Orders might not be legally binding if no Work Order is given to the Contractor. Better to use the same term everywhere in the documents.

Good catch, thanks to both of you.

I also got a dm from someone overnight who felt that this version of the document wasn’t easy to understand with this much legal wording. Just want to be clear that this isn’t going to a vote until all the feedback is taken into account and part of that is making sure that feedback can even be given. This version of the policy will remain uploaded, but I’m going to try to get a version in plain english that counsel has looked over and approved as being interpreted correctly so people can make more of an informed decision, even if the vote is on the version with legal language.

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I also am not a lawyer, this is just my opinion

All of these make sense to me, as we all work through this lets get a list of things we want added or removed in plain english and we can ask counsel to help get those requests into the wording needed.

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The contractor policy document that was linked initially in this proposal was largely legal language and we had some feedback from people who mentioned they weren’t sure if everything was understandable. There is now a version of the document with most of its text replaced with plain English linked here and in the original post. This language has been looked over by a lawyer and can effectively be used in place of the original document for the purposes of gathering feedback.

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Hi Naan,

I’m glad that METIP #17 is still being discussed, and I appreciate that our feedback is being considered. Also, thank you for providing the plain English version of the document.

I found the legal jargon in the original version quite intimidating and hard to read, especially in parts 4.1 and 4.2. However, the new version has cleared up the confusion, and I now understand what MetricsDAO is proposing in those sections.

Finally, I think it would be helpful to have a plain English version posted alongside important legal documents and policies like METIP #17 in the future. This would make it easier for members who are not legal experts to understand the proposal’s content, context, and implications.

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Definitely agree, will have the plain English version created and presented along with the official document going forward.

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Summarizing the suggested changes up till now:

  • Spelling of Work Order/Word Order (in sections 1 & 7.2)
  • Allow MDAO to reimburse contractors for funds (in section 2.1)
  • Allow either both sides to terminate immediately or both to have 10 days notice (in section 3)
  • Should make it clear that termination is related to failure to deliver and not arbitrary (in section 3)

@cryptofreedman would your numbers 2, 3, and 4 be covered by section 5 and 7.4 in the current version? Happy to ask about the particular language you used but not sure if i’m understanding the nuance here or if anyone else might have an opinion on this

Some more personal input on this:

  • Related to reimbursing expenses, MDAO can have tools and let contributors use them with the provision that they don’t own whatever they’re borrowing (in section 2.2)
  • I want to double check that ‘resulted from MDAO’s own intentional actions’ would cover something like if a work order had something included which later got the contributor sued (in section 2.7)
  • Any amendments should be passed through MDAO’s governance and will be communicated to anyone affected (in section 7.4)
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  1. Severability is a different concept; speak with the Lawyer they’ll know what it is, that’s just boilerplate CYA stuff

  2. Only allowing MDAO to arbitrarily change contract terms feels like everything wrong with big tech TOS to me (re:7.4); I do a lot of “handshake deals” with contractors/clients - no formal written contract. It’s fine to realize the original agreement needs to be renegotiated - but both parties have the same ability to do that.

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The document linked here is what was sent to legal counsel as questions around changes we wanted to make to the policy. They’ve provided some feedback that can help inform how we want to move forward. This discussion is still informal, and a final set of changes will be posted before being incorporated into the legal language and voted on.

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We currently pay things like gas fees for when people need to do things on the DAO’s behalf. Can this be amended to allow for reimbursement on some discretionary basis?
“Ideally, the contractor pays for the expenses that are required to complete the job, and price their initial offer accordingly. This is designed to keep the relationship as an independent contractor relationship and not an employment.”

I’m understanding this as budgets needing to include more money than might really be used as a way to make sure contributors aren’t taking personal losses to help MDAO function. This means gas fees, but also anything else that’s been discretionary so far. Maybe we can come up with some list of what we’ve run into so we can include that potential spend on our budgets?

Can we instead also allow for the DAO to own things and let contractors use them with an agreement that they’re just borrowing it?
“Ideally, the contractor uses their own tools. That said, if the Contractor’s work is related to improving the DAO’s tool, they may have to have access to the tools. If you have specific examples, happy to discuss.”

Same idea here, not sure how exactly all the tooling is being paid for right now.

In section 7.4, can we change it so that either MDAO or a Contractor could propose a change and that change has to go through governance with notice given to people working in the DAO at the time?
It is already now possible for a Contractor to propose a change and once approved by MDAO, it will be effective immediately. Any changes you’d like to make?

I’m still reading “MDAO may amend any term of this Policy in its sole discretion at any time. Any such amendment will be immediately effective on all outstanding and future Statements of Work without notice.” to mean that only MDAO can make the change, will follow up here to clarify.

I also wanted to make sure that ‘resulted from MDAO’s own intentional actions’ (in section 2.7) would cover situations like if a work order had something included as a responsibility which later got the contributor sued.
The current section 2.7 is a revised version of my original language and doesn’t work as is. What are we trying to accomplish? Indemnification or limitation of liability?

I don’t have the background to be confident on anything here but I think we’d want indemnification? Happy to let someone else fill in here.

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We currently pay things…

Re: this + transparency, I think the right way to do this is to allow “cost centers” plus some level of reporting; the overhead here can get complicated/a lot, MDAO support with the accounting could be helpful but it’s something like “The community pod has pre-approval for $1k/month in gas fees; at the end of the month (or quarter), they’ll have an accounting report to show how much they actually spent and on what”

Can we instead also allow

Operationally, we just spoke about this; it is important that the DAO has a certain level of access/control of tooling eg we need to be able to get into Twitter if/when the person in charge of it atm leaves

I also wanted to make

Probably ask the lawyer what the difference between indemnification and limitation of liability is

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We got another round of feedback from legal around our potential contractor policy. I think we’re close to the point where we won’t get a lot more meaningful clarification with how specific the comments can be so that leaves us to make a couple big decisions about how we’re wanting to manage structural risk. Document with comments is below:

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Requisite I’m not a lawyer statement

" MDAO may want to consider if this structure increases the employee/independent contractor misclassification"

It might, I think scale matters as to whether this is a worthwhile concern. Maybe simpler to say “we pay a lump sum for services rendered; the contractor is responsible for paying for expenses required to complete the job and is expected to report these expenses if asked” eg my agreement is 10k/month but it’s expected that I’m hiring others at my risk/expense, paying for tools and ads etc. I’ve shared accounting on this for the sake of transparency and trust while technically I can do anything I want with that money because I’m a contractor not an employee.

" but indemnification is generally understood to mean that the contractor indemnifies the DAO against losses"

Sounds like we want indemnification.

"“no notice”

Sounds like we keep this BUT it would be nice to maybe have the policy be that the contractor is @ mentioned when a proposal that affects their contract is made? (to be nice and make it easy for them to know something’s happening if they’re paying attention)

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I reviewed the summary of changes shared on Discord on May 9th, 2023m and the MDAO Contractor Policy Replaced Language that was linked above (presuming that’s the latest official policy draft). Sharing a few comments:

  1. The tooling clause. What are tools - only equipment like laptops and phones etc.? Or also subscriptions, accounts and logins etc.? Anything else? Can this be defined in the contractor policy directly?

Why it matters: when it is not the DAO’s responsibility to provide equipment like hardware to the contractor that works in practice. However accounts and subscriptions really need to be owned by the DAO and provided to the builders in many cases.

Scale at which the contractor policy is/will be applicable also matters here. MetricsDAO currently has one contractor, but could possibly have more in the future, plus in Discord Naan touched on the possibility that the DAO may be encouraged in the future to move from the contributor model to the contractor model overall.

How scale matters for a clause like tooling: If the clause applies to one or two contractors, even if it applies to software and subscriptions and not just hardware, one contractor may be using a specialized tool the rest of the DAO doesn’t. If everyone or almost everyone were to become contractors at one point thought, it is not realistic that one person owns the Mailchimp subscription and another the Airtable subscription and the third the Typeform subscription and so on (especially if a contributors leaves). We’ve had several cases where a contributor owns a subscription account, which causes bottlenecks and access issues if they become less involved or leave the DAO, and sometimes bottlenecks even while the owner is still around and active. Centralization is needed for this use case to ensure the builders of the DAO can all do their work without barriers.

  1. The changes document discusses section 7.4 and says “It is already now possible for a Contractor to propose a change and once approved by MDAO, it will be effective immediately. Any changes you’d like to make?”
    The MetricsDAO constitution currently does not enable a contractor to propose a change through governance, though. A contributor (defined as a contributor badge holder) can. The constitution says: " Any DAO member who holds the contributor badge can post a proposal to the forum can post a proposal to the forum" which kicks off the governance process. If over time contributors got contractor status instead, I think both the governance process (constitution) and the contractor policy need to extend the same rights to participate in the governance process to a contractor. Alternatively, contractor policy would need to mention that a contractor gets a contributor badge, erasing the distinction between the two categories from the governance POV.

  2. Same section says “in case of MDAO, a proposal will always be posted on Discord per MDAO’s rules” – it’s actually Discourse forum, not Discord.

Cryptofreedman said in his message above: “Sounds like we keep this BUT it would be nice to maybe have the policy be that the contractor is @ mentioned when a proposal that affects their contract is made? (to be nice and make it easy for them to know something’s happening if they’re paying attention)”. That would be possible on Discord, but proposals are posted on Discourse forum (on this platform where we are having this discussion right now). To make this happen, an additional requirement would need to be added to the Constitution. Something like: “When a contributor badge holder posts a proposal on Discourse, they must post the link on Discord on the same day (e.g. #daoing-in-public channel) and @ mention the contractors and contributors affected.”

  1. Discussion of section 2.7 indemnification or limitation of liability.

To advocate for the DAO builders here: the goals and work specifications are generally a product of collective requirements and discussion at Mdao. To reflect that I want to advocate for a model here that gives more protections to DAO builders (in this case contractors), not the one that has less. I’m most definitely not a lawyer, but if, for example, limitation of DAO liability generally means some DAO liability and some contractor’s, and indemnification of the DAO generally means no DAO liability and all contractor’s, I believe the shared liability reflects the work process more accurately than “all liability on the contractor” can. It sounds like cryptofreedman in his latest message advocates for the opposite, though?

  1. In the Contractor Policy Replaced Language version it says " 1. Compliance with Policies. You’ll follow dao policy while working for MDAO." What the full list of documents collectively referred to as “dao policy” here?

  2. In the Contractor Policy Replaced Language 2.7 “unless it resulted from MDAO’s own intentional actions, gross negligence, or inactions.” Can the policy include definitions of what each these would mean?

  3. Cryptofreedman raised the question of contract termination above. Then Naan summarized the proposed change above as “Allow either both sides to terminate immediately or both to have 10 days notice (in section 3)”. I am following up on the same topic.

The Contractor Policy Replaced Language says “Contract ends if/when: […]- Immediately upon written notice from MDAO to the contractor. - After 10 days prior notice from the contractor to MDAO.”

That still sounds like one set of standards applied to the organization and another to the individual, which cryptofreedman wrote was his original concern. Is there any reason this was kept uneven for the sides? Can it be made both immediate or both with the same notice period? Or to specify a set of termination conditions that are applicable to both sides?

  1. “If someone sues the DAO because of something the Contractor did, the Contractor will defend MDAO and pay for its legal fees.” sounds much broader than the original language “Consultant agrees to indemnify and hold harmless MDAO and its affiliates and their directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys’ fees and other legal expenses, arising from or in connection with (i) any obligation imposed on MDAO to pay withholding taxes or similar items, (ii) any determination by a court or agency that Contractor is not an independent contractor.” Could legal please clarify more how the two are equivalent?

  2. Contractor Policy Replaced Language says “Amendments. MDAO can change this policy at any time without notice and the amendment will be effective immediately.” Can there be mandatory notice to contractor? Not necessarily advance notice, rather making them aware right away when it has happened.

  3. Is Contractor Policy replaced language going to be the only official version of the policy? I.e. the previous version that had legal language will just remain an old draft, and not official?

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Maybe simpler to say “we pay a lump sum for services rendered; the contractor is responsible for paying for expenses required to complete the job and is expected to report these expenses if asked”

This language sounds ok to me since it’s making it explicit that it’s a contractor, but like usual I don’t have a full understanding of all of the legal things.

Sounds like we want indemnification.

Agreed, indemnification with limitations on things like if the work order included a task that the contractor did properly but later caused legal problems or something.

Sounds like we keep this BUT it would be nice to maybe have the policy be that the contractor is @ mentioned when a proposal that affects their contract is made?

Might be wrong but I feel like this adds a lot of overhead for the people managing discord. Right now we have group tags, changing this to become individuals might be a bit rough. Will defer to anyone who’s actually doing that though, I personally only use the contributors and governors tags. @mar1na might have more insight here.