Can my employer claim ownership of my side projects?

Generally, no, provided the project was created entirely on your own time, without company equipment, and does not relate to the employer's business. However, overly broad IP assignment clauses in your employment contract can legally grant them ownership regardless of these factors.

What are the legal protections for employee side projects?

States like California (Labor Code 2870), Washington, and Illinois have specific statutes that invalidate employment agreements requiring employees to assign inventions developed on their own time without company resources.

How can I tell if my contract is too restrictive?

Look for language that claims 'all inventions conceived during the term of employment' without exceptions for personal time or unrelated business activities. These 'all-encompassing' 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.

What types of documents can TermScore analyze?

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How much does TermScore cost?

TermScore offers a free plan with 3 scores per month. The Team plan is $15/month for 30 scores, and the Professional plan is $50/month for 500 scores with team collaboration features.

Is my document data secure?

Yes. Documents are processed in memory and analysis results are stored encrypted. TermScore never shares your document data with third parties and you can delete your data at any time from your dashboard.

Can my employer use an NDA to claim intellectual property rights over side projects built on my own time?

An employer cannot automatically claim ownership of your side projects simply because you are employed by them. However, if your employment contract contains a broad Intellectual Property (IP) assignment clause, you may have inadvertently signed away rights to work created on your own time, using your own equipment.

Understanding IP Assignment Clauses

Most employment agreements include an "Inventions Assignment" or "Proprietary Information and Inventions Agreement" (PIIA). These clauses define what the company owns. While companies have a legitimate interest in protecting work related to their core business, many contracts are drafted with "over-breadth," claiming ownership of anything you create during your tenure.

The Three Pillars of Ownership

To determine if you own your side project, courts typically evaluate three criteria:

Time: Was the work performed entirely outside of your contracted working hours?
Resources: Did you use any company-provided hardware, software, proprietary data, or office space?
Relevance: Is the project related to the employer's current or demonstrably anticipated business, or does it result from work performed for the employer?

Key takeaway: If you use your company laptop to code a side project, you have likely provided the employer with a legal argument for ownership, regardless of whether you worked on it at 2:00 AM.

Action Item: Audit your current workspace. If you are working on a personal project, ensure it is on a personal machine with no company-licensed software installed.

Jurisdictional Protections: The California Exception

Some states provide statutory protection for employees. California Labor Code Section 2870 is the gold standard. It explicitly states that an employer cannot require an employee to assign rights to an invention developed entirely on their own time without using the employer’s equipment, supplies, or trade secrets, unless the invention relates directly to the employer's business.

State	Statutory Protection	Scope
California	Labor Code 2870	Strong; invalidates overbroad contracts.
Washington	RCW 49.44.140	Protects inventions made on own time/resources.
Illinois	765 ILCS 1060/2	Protects inventions unrelated to employer business.
Other States	Common Law	Relies on contract interpretation and "shop rights."

Action Item: Check your state’s labor laws. If you live in a state without specific IP assignment statutes, your contract language is the final word, making it significantly more dangerous.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific phrases that signal an overreaching employer:

"All inventions conceived during the term of employment": This is a massive red flag. It fails to distinguish between work-related tasks and personal hobbies.
"Relating to the business of the Company": This is often defined so broadly that it could encompass almost any software or creative work.
"Resulting from any work performed for the Company": This is a "catch-all" that can be used to claim ownership of projects that were merely inspired by your daily job.

Action Item: If you find these clauses, do not sign without requesting an "Excluded Inventions" addendum where you list your current side projects to carve them out of the agreement.

How to Protect Your Side Projects

If you are planning to build a startup or a significant side project, follow these steps to maintain ownership:

Disclose Early: If your contract requires it, disclose your side project to your employer in writing.
Maintain Strict Separation: Never use company email, Slack, or cloud storage for your side project.
Document Everything: Keep a log of hours worked and the hardware used to prove the work was done on your own time.
Review the PIIA: Have a legal professional or an AI tool review your PIIA to identify if your specific project falls under the "related to business" definition.

Key takeaway: Silence is not protection. If you are building something valuable, you must ensure your contract does not grant your employer a "backdoor" claim to your equity.

Action Item: Create a "separation log" today. Documenting that your project is distinct from your employer's business is your best defense in a potential dispute.

Leveraging AI for Contract Clarity

Navigating the nuances of IP assignment clauses can be daunting, but you don't have to do it alone. TermScore uses advanced AI to analyze your employment contracts, instantly flagging overbroad IP assignment clauses and identifying potential risks to your side projects. By providing a clear, plain-English breakdown of your obligations, TermScore empowers you to negotiate better terms and protect your intellectual property before you sign.