Does an NDA automatically cover side projects?

No. NDAs generally protect confidential information, not ownership of work. However, your employment agreement likely contains an 'Inventions Assignment' clause that may claim ownership of side projects regardless of equipment usage.

Can my employer claim my side project if I used my own laptop?

Yes, if your contract contains a broad 'Inventions Assignment' clause that covers any work related to the company's business, even if developed on personal time and equipment.

What states have laws protecting side projects?

States like California (Labor Code 2870), Washington, and Illinois have statutes that limit an employer's ability to claim ownership of inventions developed entirely on your own time without company resources.

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How to tell if my employment NDA covers independent side projects built without company equipment?

Whether your side project is covered depends on the specific language in your 'Inventions Assignment' clause, not just your NDA. If your contract claims ownership of any work 'related to the company's business,' your employer may claim your project even if you used your own equipment and time.

Understanding the Difference: NDA vs. Inventions Assignment

Employees often confuse Non-Disclosure Agreements (NDAs) with Proprietary Information and Inventions Assignment Agreements (PIIAAs). An NDA restricts you from sharing company secrets, while an Invention Assignment clause dictates who owns the intellectual property (IP) you create.

NDA: Focuses on confidentiality and trade secrets.
PIIAA: Focuses on ownership of your creative output and code.

Action Item: Locate your employment contract and search specifically for the section titled 'Inventions,' 'Intellectual Property,' or 'Assignment of Inventions.' Do not rely on the NDA section to determine ownership.

The 'Related to Business' Trap

Most standard employment contracts include a catch-all provision. If your side project falls within the 'actual or demonstrably anticipated business' of your employer, they may have a legal claim to it, regardless of the equipment used.

Clause Type	Risk Level	Description
Narrow	Low	Only covers work created using company time/resources.
Broad	High	Covers any work related to the company's current or future business.
Universal	Extreme	Claims ownership of everything created during the term of employment.

Key takeaway: If your side project is in the same industry as your employer, the risk of a claim is significantly higher, even if you used your own hardware.

Jurisdictional Protections: The California Exception

Some states provide statutory protection for employees. For example, California Labor Code Section 2870 prevents employers from requiring you to assign rights to an invention developed entirely on your own time without using the employer’s equipment, supplies, or trade secrets, provided the invention does not relate to the employer’s business.

California (Labor Code 2870): Strong protection for independent work.
Washington (RCW 49.44.140): Similar protections for inventions developed on personal time.
Illinois (Employee Patent Act): Protects inventions developed without company resources.

Action Item: Check if your state has an 'Employee Invention' statute. If you live in a state without these protections, your contract language is the final authority.

Red Flags in Your Contract

Review your agreement for these specific phrases that signal high risk:

'Any and all ideas, concepts, or inventions conceived during the term of employment.'
'Work related to the company’s business or anticipated research.'
'Work created using any company confidential information.'

If these phrases appear, the 'no company equipment' defense may be legally insufficient to protect your side project.

Steps to Protect Your Side Project

Audit your contract: Identify the 'Inventions Assignment' section.
Document everything: Keep a log of hours worked and hardware used for your side project.
Disclose early: If your project is significant, consult an attorney about a formal disclosure or a 'carve-out' agreement.
Avoid overlap: Ensure your project does not utilize any company trade secrets or proprietary data.

Action Item: Create a 'clean room' environment for your project. Use a separate computer, separate cloud storage, and work only outside of your contracted employment hours.

How TermScore Can Help

Analyzing complex legal language manually is prone to error. TermScore uses advanced AI to scan your employment agreements, highlighting risky 'Inventions Assignment' clauses and explaining your ownership rights in plain language. Upload your contract to TermScore today to get an instant, authoritative breakdown of your IP risks before you launch your next project.