Does an employment NDA cover personal side projects created entirely on my own time without company assets?

An employment NDA or Invention Assignment Agreement does not automatically claim ownership of your side projects, provided they are created entirely on your own time, without company resources, and do not relate to your employer's business. However, overly broad contract language can legally grant your employer ownership of your work regardless of these factors.

The Critical Distinction: NDA vs. Invention Assignment

Employees often confuse Non-Disclosure Agreements (NDAs) with Proprietary Information and Inventions Assignment Agreements (PIIAAs). An NDA is designed to protect trade secrets, while a PIIAA is designed to transfer ownership of your intellectual property to the company.

Why the PIIAA is the Real Threat

While an NDA restricts what you can say, the PIIAA dictates what you own. If your contract contains a "Work Made for Hire" clause or a broad "Invention Assignment" provision, your employer may claim ownership of any intellectual property created during your employment term, even if it is unrelated to your job duties.

• Work Made for Hire: Legal doctrine where the employer is considered the author of work created within the scope of employment.
• Invention Assignment: A contractual obligation to assign all rights, title, and interest in any inventions or code developed while employed.

Key takeaway: Always check your contract for an "Invention Assignment" clause. An NDA is rarely the primary vehicle for IP theft; the PIIAA is the document that poses the greatest risk to your side projects.

Action Item: Locate your original employment agreement and search specifically for the section titled "Inventions," "Intellectual Property," or "Assignment of Rights."

Jurisdictional Protections: The State-Level Shield

Several states have enacted legislation that limits how aggressively employers can claim ownership of employee side projects. If you live in one of these states, your contract may be unenforceable to the extent that it violates these statutes.

Even in these states, the protection is not absolute. If your side project relates directly to your employer's "actual or demonstrably anticipated research or development," the employer may still have a legal claim.

Action Item: Research your specific state's labor code regarding "Invention Assignment" to determine if your contract language is preempted by local law.

Four Steps to Protect Your Intellectual Property

To ensure your side projects remain yours, you must create a clear "firewall" between your professional duties and your personal innovation.

1. Use Personal Hardware: Never use a company-issued laptop, phone, or tablet for side projects. Company-owned hardware often contains monitoring software that logs activity and file creation.
2. Avoid Company Networks: Do not use your employer's VPN, Wi-Fi, or cloud storage (e.g., company Google Drive or Slack) to host code or documentation.
3. Document Your Timeline: Maintain a clear, timestamped record of your development process. This serves as evidence that the work was performed outside of business hours.
4. Disclose Prior Inventions: If you had a project before you started your job, list it in the "Prior Inventions" disclosure section of your employment contract. If you didn't, ask your employer for a written waiver or clarification regarding your side project.

Key takeaway: If you are building a project that competes with your employer, no amount of "own time" work will protect you. Most employment contracts include a "Duty of Loyalty" or "Non-Compete" clause that prohibits working on projects that directly compete with your employer's business interests.

Action Item: Audit your current development environment. If you find company-owned assets, migrate your project to a personal, encrypted repository immediately.

When to Seek Legal Counsel

If your side project has significant commercial potential or if you are concerned about a "Non-Compete" or "Non-Solicitation" clause, do not rely on general advice. A contract attorney can review your specific agreement to determine if the language is overly broad or violates state law.

TermScore provides an automated, AI-powered analysis of your employment contracts, identifying high-risk clauses like broad invention assignments and non-compete restrictions in seconds. By uploading your agreement, you can gain immediate clarity on your rights and potential liabilities before you launch your next big project.