Can my employer claim ownership of personal side projects under my employment NDA?

Can my employer claim ownership of personal side projects under my employment NDA?

Yes, your employer can claim ownership of your side projects if your employment agreement contains a broad Invention Assignment clause. Ownership is generally triggered if the project relates to the employer's business, uses company resources, or was developed during working hours. You must verify your specific contract language to confirm your rights.

The Anatomy of an Invention Assignment Clause

Most employment contracts include an "Invention Assignment" or "Proprietary Information and Inventions Agreement" (PIIA). This is distinct from a standard NDA, which focuses on confidentiality. An assignment clause legally transfers the rights of anything you create to the company.

Common Triggers for Employer Ownership

• Business Relevance: The project relates directly to the employer’s current or demonstrably anticipated business, research, or development.
• Resource Utilization: You used company equipment, supplies, facilities, or trade secret information to build the project.
• Temporal Overlap: The work was performed during your contracted working hours or using company-provided software licenses.
• Scope of Employment: The project results from any work you performed for the employer.

Key takeaway: Never assume a project is yours just because you worked on it at home. If the technology overlaps with your employer's market, the burden of proof often shifts to you to demonstrate that you did not use company resources.

Action Item: Locate your employment agreement and search for the section titled "Inventions," "Intellectual Property," or "Assignment of Rights." Highlight any language that claims ownership of "all inventions conceived or reduced to practice during the term of employment."

Jurisdictional Protections: The California Exception

State laws significantly impact the enforceability of these clauses. California, for example, provides statutory protection under Labor Code Section 2870.

Even in states with strong protections, these laws typically do not apply if the invention results from work performed for the employer or relates to the employer's actual or anticipated business. Action Item: Check if your state has an "Employee Invention Act." If it does, ensure your side project documentation explicitly notes that it was developed without company resources.

How to Protect Your Intellectual Property

To minimize the risk of a legal dispute, follow these strict operational guidelines:

1. Use Personal Hardware: Never install your project code on a company-issued laptop or cloud environment.
2. Maintain Time Logs: Keep a record of when you work on your project to prove it occurred outside of your 9-to-5 schedule.
3. Avoid Company IP: Do not use any proprietary code, libraries, or data owned by your employer in your side project.
4. Disclose Early: If you are building something significant, consider disclosing it to your HR or legal department to request a formal "carve-out" or waiver.

Key takeaway: A written waiver is the gold standard. If your employer signs a document acknowledging that your specific project is excluded from the invention assignment, you gain a significant layer of legal protection.

Action Item: Create a "Project Log" folder on your personal computer. Document the start date, hours worked, and a list of tools used. This serves as contemporaneous evidence if a dispute arises.

Assessing Risk with AI Analysis

Employment contracts are often dense, filled with legalese that masks the true scope of IP assignment. Manually parsing these documents is prone to human error. TermScore allows you to upload your employment agreement to instantly identify broad assignment clauses and potential "red flag" language that could jeopardize your personal projects. By utilizing AI-powered analysis, you can understand your legal standing in seconds rather than hours of manual review.