What states have laws protecting employee side projects?

States like California (Labor Code 2870), Washington (RCW 49.44.140), and Illinois (Employee Patent Act) provide statutory protections that invalidate employment contract provisions claiming ownership of inventions developed on an employee's own time without company resources.

How can I tell if my contract is too broad?

Look for language that claims ownership of 'all inventions conceived during the term of employment' regardless of whether they relate to the company's business or use company resources. These clauses are often unenforceable but create significant legal risk.

A TermScore is an AI-generated risk rating from 0 to 100 that evaluates the fairness and risk level of any legal document. A score of 86-100 means the contract is highly favorable, while 0-30 indicates dangerous terms you should walk away from.

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Can an employer use an NDA to claim ownership of side projects built without company resources?

Q: Can an employer claim ownership of side projects built without company resources?

Generally, no. If a project is developed entirely on your own time, without company equipment, and does not relate to the employer's business, it is typically yours. However, overly broad 'Invention Assignment' clauses can legally challenge this ownership.

In most jurisdictions, an employer cannot claim ownership of a side project developed entirely on your own time, using your own equipment, and unrelated to the employer's business. However, broad 'Invention Assignment' clauses in your employment contract can create legal ambiguity that requires careful review.

The Legal Framework of IP Ownership

The default rule in intellectual property law is that the creator owns the work. However, employment contracts almost always include an 'Invention Assignment' clause that shifts this ownership to the employer. The enforceability of these clauses hinges on three primary factors:

Time: Was the work performed during standard working hours?
Resources: Did you use company laptops, servers, proprietary software, or trade secrets?
Relevance: Does the project relate directly to the employer's current or anticipated business, research, or development?

Key takeaway: If you use a company-issued laptop to write code, you have likely forfeited your claim to that IP, regardless of whether you worked on it at 2:00 AM on a Sunday.

Action Item: Audit your current project environment. If you are building a side project, ensure it is hosted on a personal GitHub account, developed on a personal machine, and uses no proprietary company data.

State-Specific Protections

Several states have enacted legislation to prevent employers from overreaching. These statutes act as a 'floor' for your rights, meaning your contract cannot legally override them.

State	Statute	Key Protection
California	Labor Code 2870	Protects inventions made on own time without company resources.
Washington	RCW 49.44.140	Invalidates assignment of inventions unrelated to employer business.
Illinois	765 ILCS 1060/2	Protects employee inventions not related to employer's actual business.
New Jersey	N.J.S.A. 34:1B-265	Limits assignment of inventions developed on employee's own time.

Action Item: Check if your employment contract includes a 'choice of law' provision. If you live in a protective state but your contract specifies the law of a state without these protections, you may be at a disadvantage.

Identifying Red Flags in Your Contract

Not all assignment clauses are created equal. You must scan your agreement for language that attempts to bypass statutory protections. Watch for these specific red flags:

'Any and All' Language: Clauses that claim ownership of 'any and all ideas, concepts, or inventions' conceived during your employment, without qualification.
'Scope of Employment' Ambiguity: Definitions of 'business' that are so broad they encompass every possible industry, effectively claiming everything you create.
Post-Termination Tails: Provisions that claim ownership of ideas developed for a period (e.g., 6–12 months) after you leave the company.

Action Item: If you find these clauses, request an 'IP Exclusion' addendum. This document explicitly lists your existing side projects and clarifies that they are excluded from the assignment agreement.

How to Protect Your Side Projects

To ensure your side projects remain yours, you must maintain a strict 'firewall' between your professional and personal work.

Document Everything: Keep a log of hours spent on your side project to prove it was done outside of company time.
Use Personal Infrastructure: Never use company email, Slack, or cloud storage for any part of your side project.
Disclose Early: If your project is significant, disclose it to your employer in writing and ask for a written acknowledgment that it falls outside the scope of your employment.
Avoid Conflicts: Ensure your project does not compete with your employer's business, as this can trigger 'duty of loyalty' claims even if the IP assignment clause is weak.

Key takeaway: Documentation is your best defense. If a dispute arises, a clear paper trail showing the project was developed independently is more persuasive than a vague contract clause.

Action Item: Create a 'Personal IP Disclosure' document today. List your current side projects and keep it in your personal files as a baseline for future negotiations.

Leveraging AI for Contract Clarity

Navigating the nuances of IP assignment clauses is complex, and missing a single line of legalese can cost you the rights to your work. TermScore uses advanced AI to instantly scan your employment contracts, flagging overly broad assignment clauses and identifying potential conflicts with your personal projects. By providing a clear, plain-English analysis, TermScore helps you understand your rights before you sign, ensuring your creative output remains firmly in your control.