Can an employer use an NDA to restrict my ability to build open source projects on my own time?

Can an employer use an NDA to restrict my ability to build open source projects on my own time?

An NDA (Non-Disclosure Agreement) typically protects confidential information, but it rarely restricts your ability to build open source projects. However, your employment contract likely contains an Invention Assignment Agreement, which is the real legal mechanism employers use to claim ownership of your side projects. If your contract asserts that all work created during your employment belongs to the company, your open source contributions could be legally owned by your employer.

Understanding the Difference: NDAs vs. Invention Assignment Clauses

It is critical to distinguish between confidentiality and ownership. An NDA is designed to prevent you from leaking trade secrets, client lists, or proprietary source code. It does not inherently stop you from writing code. Conversely, an Invention Assignment clause is a transfer of property rights.

The Scope of Invention Assignment

Most tech employment contracts include a broad "Work for Hire" or "Invention Assignment" clause. These clauses often state that any intellectual property (IP) created during your term of employment—even on nights and weekends—belongs to the company if it relates to the company's business or is developed using company resources.

• Broad Clauses: Claim ownership of anything "related to the employer's actual or anticipated business."
• Restrictive Clauses: Claim ownership of anything created during the term of employment, regardless of the subject matter.
• Resource Clauses: Claim ownership of anything created using company hardware, software, or proprietary data.

Key takeaway: An NDA is a shield for the company's secrets; an Invention Assignment clause is a grab for your personal creative output. Always check for the latter.

Jurisdictional Protections: The California Exception

Several U.S. states have enacted laws that limit the reach of Invention Assignment agreements. If you reside in one of these jurisdictions, your employer's ability to claim your open source work is significantly restricted.

Action Item: If you live in a state with these protections, ensure your contract does not contain a "catch-all" provision that attempts to override state law. If it does, that specific provision may be unenforceable, but it is best to have it explicitly carved out.

How to Protect Your Open Source Work

If you are a developer who contributes to open source, you must take proactive steps to ensure your personal projects remain yours.

1. Audit Your Contract: Search for terms like "Invention Assignment," "Proprietary Information," and "Work Product."
2. Request an IP Waiver: Ask your employer for a written letter or an addendum to your contract that explicitly excludes your open source projects from the assignment clause.
3. Segregate Resources: Never use company-issued laptops, cloud accounts, or proprietary libraries for your personal projects.
4. Use Personal Infrastructure: Host your code on personal GitHub accounts, not company-managed repositories.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific red flags that indicate your open source work is at risk:

• "All-Encompassing" Language: Phrases like "all inventions created during the term of employment" without a carve-out for personal projects.
• "Anticipated Business" Clauses: Language that claims ownership of anything related to what the company *might* do in the future.
• Lack of "Own Time" Distinction: If the contract fails to distinguish between work done during business hours versus personal time.

Key takeaway: If your contract is overly broad, do not assume your employer will be "reasonable" later. Get a written carve-out before you start your project.

Conclusion: Take Control of Your IP

Navigating the intersection of employment law and open source contribution requires vigilance. You should not have to choose between your career and your personal projects, but you must ensure your legal documentation reflects that separation.

TermScore can automatically analyze your employment contract to identify dangerous Invention Assignment clauses and restrictive IP language. By uploading your document to our platform, you receive an instant, plain-English breakdown of your rights, allowing you to negotiate with confidence and protect your open source contributions before they become a legal liability.