Does an employment NDA prevent me from contributing to open source projects on my own time?

Does an employment NDA prevent me from contributing to open source projects?

An employment NDA alone rarely prohibits open source contributions, but it is often paired with an 'Invention Assignment' clause that can legally transfer ownership of your side projects to your employer. If your contract claims ownership of all work created during your employment, you may inadvertently assign your open source code to your company.

Key takeaway: An NDA protects secrets, but an Invention Assignment clause claims ownership of your intellectual property. Always distinguish between the two when reviewing your employment agreement.

Understanding the Difference: NDA vs. Invention Assignment

Employees often conflate NDAs with IP assignment agreements. Understanding the distinction is the first step in protecting your personal projects.

The NDA (Non-Disclosure Agreement)

An NDA is a restrictive covenant designed to prevent the unauthorized disclosure of trade secrets, proprietary algorithms, and internal business strategies. Contributing to open source is generally safe under an NDA provided you do not use or disclose your employer's confidential information in your code.

The Invention Assignment Clause

This is the clause that poses the greatest risk to open source contributors. It typically states that any invention, software, or intellectual property created during the term of your employment—whether on company time or not—belongs exclusively to the employer. If your contract contains a broad assignment clause, your open source contributions could technically be considered company property.

• Scope: Does it cover 'all work' or only 'work related to the business'?
• Time: Does it apply 24/7 or only during business hours?
• Resources: Does it claim ownership if you use any company equipment?

Action Item: Locate your employment contract and search specifically for the terms 'Invention Assignment,' 'Proprietary Information,' or 'Work Made for Hire.'

Jurisdictional Protections for Employees

The enforceability of broad invention assignment clauses varies significantly by state. Some jurisdictions provide statutory protections that limit an employer's reach.

Even in states with strong protections, these laws often have exceptions if the invention relates directly to the employer's business or anticipated research. Always consult local labor statutes.

Action Item: Check if your state has an 'Employee Invention Act' that limits the scope of what your employer can claim.

Best Practices for Open Source Contributors

To minimize legal risk, follow these four steps to insulate your personal projects from your employer's claims.

1. Use Personal Hardware: Never use a company-issued laptop, cloud account, or software license for your open source work.
2. Maintain Separation: Do not contribute to projects that compete directly with your employer's core product or services.
3. Request an IP Exclusion: If you have a significant side project, ask your employer to sign an 'IP Exclusion Agreement' that explicitly lists your project as your own property.
4. Document Everything: Keep a log of when you work on your projects to prove it was done outside of your contracted hours.

Key takeaway: If you are working on a project that is even tangentially related to your employer's business, you are at high risk. Get written clearance from your manager or legal department before pushing code.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific red flags that signal potential trouble for your open source activities:

• 'All Inventions' Language: Clauses that claim ownership of 'any and all' ideas or code, regardless of subject matter.
• 'During the Term' Clauses: Language that claims ownership of everything created while you are employed, regardless of whether it was created on company time.
• Broad Definitions of 'Business': Definitions that include 'anticipated' or 'future' business lines, which can be used to claim almost any software project.

Action Item: If you find these red flags, do not sign until you have negotiated a carve-out for your personal projects.

How TermScore Can Help

Navigating the legalese of employment contracts is complex, but you don't have to do it alone. TermScore uses advanced AI to scan your employment agreements, identifying restrictive invention assignment clauses and potential conflicts with your open source contributions. By highlighting these risks in plain language, TermScore empowers you to negotiate better terms and protect your intellectual property before you sign.