Can an employer claim ownership of side projects built on my own time?

Generally, no, if the project is unrelated to your employer's business and created without company resources. However, broad 'Invention Assignment' clauses in employment contracts can legally grant employers ownership of your work regardless of when or where it was created.

What states have laws protecting employee side projects?

States like California (Labor Code 2870), Washington, Illinois, and New Jersey have specific statutes that invalidate employment contract provisions requiring employees to assign rights to inventions developed entirely on their own time without company equipment.

How can I tell if my contract is too broad?

Look for language that claims ownership of 'all inventions conceived or reduced to practice during the term of employment.' If there is no carve-out for personal projects, the clause is likely overly broad and potentially unenforceable.

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Can an employer enforce an NDA to claim ownership of side projects built on my own time?

Whether an employer can claim your side projects depends on the specific language of your 'Invention Assignment' clause and your state's labor laws. If your contract lacks a specific carve-out for personal work, broad language can legally grant your employer ownership of any intellectual property created during your employment tenure, regardless of whether company resources were used.

Understanding Invention Assignment Clauses

Most employment contracts contain an 'Invention Assignment' or 'Proprietary Information and Inventions Agreement' (PIIA). Unlike a standard NDA, which protects trade secrets, an assignment clause transfers the ownership of your creative output to the company. These clauses are often drafted to be as broad as possible to protect the employer's competitive advantage.

The Three Pillars of Employer Ownership

Employers typically claim ownership if your project meets any of these criteria:

Company Resources: You used company laptops, software licenses, servers, or proprietary data.
Business Relevance: The project relates directly to the employer's current or anticipated business, research, or development.
Scope of Employment: The work resulted from tasks performed during your assigned working hours.

Key takeaway: Even if you work on a weekend, if your project uses a company-provided laptop or software, you have likely triggered an assignment clause that grants your employer full ownership of your code or design.

Action Item: Audit your current project setup. If you are using any company-provided hardware or software, migrate your project to a personal environment immediately.

Jurisdictional Protections: The State Law Factor

Several U.S. states have enacted legislation to protect employees from overly aggressive IP assignment clauses. These laws essentially create a 'safe harbor' for personal projects.

State	Statute	Key Protection
California	Labor Code 2870	Invalidates assignment of inventions created on own time without company resources.
Illinois	Employee Patent Act	Protects inventions developed on own time, provided they don't relate to employer business.
Washington	RCW 49.44.140	Protects inventions developed on own time without company equipment.
New Jersey	N.J.S.A. 34:1B-265	Prevents employers from requiring assignment of non-work-related inventions.

If you reside in a state without these specific protections, your contract's language is the final word. In these jurisdictions, courts often enforce the contract as written, even if the result seems inequitable to the employee.

Action Item: Check your state's labor department website for 'Invention Assignment' statutes. If your state lacks these, you must negotiate a written carve-out in your employment agreement.

How to Protect Your Side Projects

If you are currently employed and want to build your own products, you must take proactive steps to ensure your ownership remains secure.

Review the PIIA: Locate your original employment contract and identify the 'Inventions' or 'Intellectual Property' section.
Request a Carve-out: If you have a specific project, ask your employer for a written 'Prior Inventions' disclosure or a waiver for that specific project.
Maintain Strict Separation: Never use company email, Slack, or cloud storage for personal projects.
Document Everything: Keep a log of hours worked on your project to prove it occurred outside of your 9-to-5 schedule.

Key takeaway: A verbal agreement with your manager is insufficient. Always secure a written acknowledgment from HR or legal counsel that your side project is excluded from your invention assignment obligations.

Action Item: Create a 'Prior Inventions' document today, listing any projects you are currently working on, and submit it to your HR department to establish a clear record of your ownership.

The Role of TermScore in Contract Analysis

Navigating the legalese of employment contracts is difficult, and missing a single clause can cost you the rights to your intellectual property. TermScore uses advanced AI to instantly analyze your employment agreements, highlighting broad assignment clauses and identifying potential risks to your side projects. By providing clear, actionable insights, TermScore helps you understand exactly what you are signing before you commit, ensuring your creative work remains yours.