Does an employment NDA allow my company to claim ownership of independent projects built without company resources

No, a standard Non-Disclosure Agreement (NDA) does not grant your employer ownership of your independent projects. However, most employment contracts contain a separate Invention Assignment Agreement that can claim ownership of your work, even if built without company resources, depending on the specific language used.

Understanding the Difference: NDA vs. Invention Assignment

Employees often confuse NDAs with Invention Assignment Agreements. An NDA is designed to protect trade secrets and confidential information. It restricts what you can say, but it does not inherently transfer the title of your intellectual property (IP) to your employer.

The real threat to your side projects is the Proprietary Information and Inventions Agreement (PIIA). This document typically includes:

• Assignment Clause: A legal transfer of all rights, title, and interest in inventions created during your employment.
• Scope of Work: Definitions that often include anything "related to the company's business."
• Disclosure Requirements: Obligations to report all inventions to the company, regardless of when or where they were created.

Key takeaway: Always check your employment contract for an "Invention Assignment" section. If it exists, the NDA is the least of your concerns regarding project ownership.

Action Item: Locate your original offer letter and any subsequent PIIA you signed. Look specifically for the section titled "Inventions" or "Intellectual Property Assignment."

The "Company Resources" Trap

Even if your contract is narrow, using company resources can trigger an automatic claim of ownership. Courts generally look at three factors to determine if an employer owns your side project:

• Time: Did you work on the project during your contracted hours?
• Equipment: Did you use a company-issued laptop, software licenses, or servers?
• Relationship: Does the project compete with or relate to the company’s current or anticipated business?

Action Item: Audit your development environment. If you are using a company-provided MacBook, you are at high risk. Purchase a personal device for all independent work.

Jurisdiction Matters: The California Exception

Your location significantly impacts your rights. In states like California, Washington, and Illinois, there are statutory protections for employees.

California Labor Code Section 2870

This law provides that an employer cannot require an employee to assign rights to an invention developed entirely on the employee's own time without using the employer's equipment, supplies, facilities, or trade secret information, provided the invention:

1. Does not relate to the employer's business.
2. Does not relate to the employer's actual or anticipated research or development.
3. Does not result from any work performed by the employee for the employer.

If you live in a state without these specific protections, your contract language is the final word. If your contract says the company owns "all inventions created during the term of employment," you may be legally bound by that, regardless of whether you used company resources.

Action Item: Search your state's labor code for "Invention Assignment" protections. If you are in a restrictive state, you must negotiate an "Excluded Inventions" list before signing your contract.

How to Protect Your Side Projects

To ensure your side projects remain yours, follow these strict protocols:

• Maintain a Paper Trail: Keep logs of when you worked on your project to prove it was outside of business hours.
• Use Personal Infrastructure: Host your code on personal GitHub accounts, not company-managed repositories.
• Disclose Early: If you have a project that could be seen as "related" to your work, disclose it in writing to your HR or legal department and get a written waiver.
• Avoid Conflict: Never build a product that competes with your employer. This is the fastest way to trigger a breach of contract claim.

Key takeaway: If you are building something that could be considered a "competitor" to your employer, no amount of "personal time" will protect you from a breach of fiduciary duty claim.

Action Item: Create a "Side Project Disclosure" document. If you are worried about a specific project, have a lawyer review it against your employment contract to see if it falls under the "related to business" clause.

Conclusion

Your employment contract is a binding legal document that often claims more than you realize. Do not assume that because you used your own time, you own the IP. Review your PIIA, understand your state's labor laws, and maintain a strict separation between your professional and personal work environments.

If you are unsure about the language in your contract, TermScore can automatically analyze your employment agreement to identify aggressive IP assignment clauses and potential risks to your side projects, giving you the clarity you need to build with confidence.