Can an employment NDA block me from working on personal open-source projects?

Can an employment NDA block me from working on personal open-source projects?

An NDA typically prevents the disclosure of trade secrets, but it rarely blocks open-source work on its own. However, most employment contracts include 'Invention Assignment' clauses that claim ownership of all work created during your employment. If your project relates to your employer's business, they may legally own your code.

Understanding the Legal Framework

To determine if your open-source project is at risk, you must look beyond the NDA. Employment contracts usually contain three distinct types of clauses that impact your side projects:

• Confidentiality/NDA: Restricts you from using or sharing proprietary company data.
• Invention Assignment: Transfers ownership of anything you create to the employer.
• Non-Compete/Non-Solicitation: Limits your ability to work on projects that directly compete with your employer’s market.

Key takeaway: An NDA is about secrecy; an Invention Assignment is about ownership. You can violate an Invention Assignment without ever breaching an NDA.

The Scope of Invention Assignment Clauses

Most standard employment agreements contain broad language stating that any intellectual property (IP) developed during your term of employment belongs to the company. In states like California, Illinois, and Washington, there are statutory protections that limit this, but these protections often only apply if the work was done entirely on your own time, using your own equipment, and does not relate to the employer's business.

How to Protect Your Open-Source Work

If you are planning to contribute to or launch an open-source project, follow these steps to minimize your legal exposure:

1. Review your 'Prior Inventions' list: Most contracts have an exhibit where you list projects you started before joining. Ensure your current projects are documented there.
2. Segregate your hardware: Never use a company-issued laptop or cloud account for personal coding. Use a dedicated personal machine.
3. Avoid company time: Do not commit code or work on projects during your contracted working hours.
4. Check for 'Scope of Business' language: If your contract claims ownership of anything 'related to the company's business,' ensure your project is clearly distinct from your employer's product roadmap.

Key takeaway: If you use company resources, you have likely forfeited your claim to the IP. Always maintain a clear physical and digital separation between your professional and personal work environments.

Jurisdictional Nuances

State laws significantly impact the enforceability of these clauses. For example, California Labor Code Section 2870 prevents employers from claiming ownership of inventions developed entirely on your own time without using company resources, provided the invention does not relate to the employer's business or anticipated research. However, if you live in a state with fewer protections, your employer’s contract language will likely be the final word.

Actionable Steps for Developers

• Request a carve-out: Before signing, ask for an addendum that explicitly lists your open-source projects as 'Excluded Inventions.'
• Audit your commits: Ensure your GitHub profile does not show activity during your employer's core business hours.
• Use a personal email: Never register your personal projects using your corporate email address.

Action item: Audit your current employment contract today. If you find broad language claiming 'all work product,' initiate a conversation with your manager or HR to clarify the status of your side projects in writing.

How TermScore Can Help

Analyzing complex legal agreements manually is prone to error and often misses the subtle 'catch-all' phrases that put your personal IP at risk. TermScore uses advanced AI to scan your employment contracts, identifying restrictive invention assignment clauses and non-compete language in seconds. By providing a clear risk assessment, TermScore empowers you to negotiate better terms and protect your open-source contributions before you sign.