Does an employment NDA cover side projects created on my own time?

Generally, no, provided the project does not use company resources, relate to the employer's business, or result from work performed for the employer. However, broad 'Invention Assignment' clauses often override NDAs, potentially claiming ownership of all work created during your employment.

What states have laws protecting employee side projects?

California (Labor Code 2870), Washington (RCW 49.44.140), Illinois (Employee Patent Act), and several others have statutes that invalidate contract provisions requiring employees to assign inventions developed entirely on their own time without company equipment.

How can I protect my side project from my employer?

Ensure you use zero company resources, document your development timeline, keep your project outside the scope of your employer's current or anticipated business, and review your employment agreement for restrictive IP assignment language.

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?

TermScore analyzes any legal document including freelance contracts, employment agreements, residential leases, NDAs, brand sponsorship deals, SaaS vendor agreements, and rental applications. Upload PDFs, Word documents, or images.

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.

Does an employment NDA cover side projects created entirely on my own time without company resources?

Does an employment NDA cover side projects created entirely on my own time?

An employment NDA typically protects confidential information, not ownership of your work. However, most employment contracts include an 'Invention Assignment' clause that may claim ownership of your side projects. If your project relates to your employer's business or uses their resources, they likely own it, regardless of when you worked on it.

The Distinction Between NDAs and Invention Assignment Agreements

Employees often confuse Non-Disclosure Agreements (NDAs) with Proprietary Information and Inventions Assignment Agreements (PIIAAs). While an NDA restricts what you can share, a PIIAA dictates who owns what you create.

Why NDAs Usually Don't Apply

An NDA is designed to prevent the unauthorized disclosure of trade secrets. If you build a side project that is entirely unrelated to your employer's business and uses none of their proprietary data, an NDA is technically irrelevant. The risk arises when the employer argues that your side project constitutes a 'derivative work' or utilizes 'confidential methodology' learned on the job.

The Danger of Invention Assignment Clauses

The real threat to your side project is the PIIAA. These clauses often state that any invention, software, or creative work developed during your employment—even on weekends—belongs to the company. You must look for language that defines 'Inventions' broadly to include anything 'conceived or reduced to practice' during your term of employment.

Key takeaway: Always check your contract for an 'Invention Assignment' section. An NDA is a shield for the company's secrets; an Invention Assignment is a grab for your intellectual property.

Action Item: Locate your original offer letter or employment contract and search for the terms 'Inventions,' 'Intellectual Property,' or 'Assignment of Rights.'

Jurisdictional Protections: The 'Own Time' Exception

Several states have enacted legislation to protect employees from overreaching IP assignment clauses. These laws generally prevent employers from claiming ownership of inventions created on your own time, provided specific criteria are met.

State	Statute	Key Requirement
California	Labor Code 2870	No company resources; not related to employer's business.
Washington	RCW 49.44.140	No company equipment; no trade secrets used.
Illinois	765 ILCS 1060/2	Developed entirely on own time; no employer equipment.
New Jersey	N.J.S.A. 34:1B-265	No company resources; not related to employer's business.

The Three-Pronged Test for Ownership

To ensure your side project remains yours, you must typically satisfy these three conditions:

No Company Resources: You did not use company laptops, software licenses, servers, or office space.
No Business Relation: The project does not relate to the employer's actual or demonstrably anticipated business, research, or development.
No Work-Related Result: The project did not result from any work performed for the employer.

Action Item: If you live in a state with these protections, ensure your side project documentation explicitly notes that no company resources were utilized.

How to Protect Your Side Project

If you are planning to launch a side project, you must be proactive. Employers rarely waive their rights after the fact.

Audit Your Contract: Identify if your contract contains an 'Invention Assignment' clause.
Maintain Strict Separation: Never use a company-issued email address, Slack account, or laptop for your side project.
Disclose (If Necessary): In some cases, you may need to request a written waiver from your employer.
Document Everything: Keep a log of your development hours and the hardware used to prove the work was done on your own time.

Key takeaway: If your side project is in the same industry as your employer, you are at high risk of a legal claim, regardless of whether you used their resources.

Action Item: Create a 'clean room' environment for your project. Use a personal computer, personal software subscriptions, and a personal repository (e.g., a private GitHub account) that is not linked to your work identity.

Conclusion

The legal landscape regarding side projects is complex and heavily dependent on the specific language in your employment agreement. While state laws offer some protection, they are not a blanket immunity. You must ensure your project is distinct from your employer's business and entirely independent of their resources.

TermScore can automatically analyze your employment contract to identify aggressive Invention Assignment clauses and potential conflicts, giving you the clarity you need to pursue your side projects with confidence.