Does an employment NDA cover personal side projects created on my own time without company equipment?

Does an employment NDA cover personal side projects created on my own time without company equipment?

An NDA alone usually does not grant your employer ownership of your side projects; however, most employment contracts include a separate Invention Assignment Agreement. If your project relates to your employer’s business or uses their resources, they may legally claim ownership, even if you worked on it off-hours.

The Distinction Between NDAs and Invention Assignments

It is a common misconception that an NDA (Non-Disclosure Agreement) is the primary vehicle for IP theft. An NDA is designed to prevent you from sharing trade secrets. The real threat to your side project is the Proprietary Information and Inventions Agreement (PIIA), often bundled with your employment contract.

What the PIIA Actually Claims

• Scope of Work: Any work related to the company’s current or anticipated business.
• Resource Usage: Any project developed using company-provided hardware, software, or proprietary data.
• Timeframe: Work performed during your employment period, regardless of whether it was done on a weekend or after hours.

Key takeaway: Always check your contract for an 'Assignment of Inventions' clause. If it is present, the NDA is secondary to the ownership rights granted to the employer in the PIIA.

Action Item: Search your employment contract for the word 'Inventions' or 'Intellectual Property' to identify the specific scope of your assignment obligations.

State-Specific Protections for Side Projects

Several U.S. states have enacted laws that provide a 'safe harbor' for employee side projects. These laws generally invalidate contract clauses that attempt to claim ownership of inventions created on your own time.

If you live in a state without these specific protections, your contract terms will likely be interpreted strictly in favor of the employer. Action Item: Check if your state has an 'Employee Invention' statute, as this may override overly broad language in your contract.

Criteria for Protecting Your Work

To ensure your side project remains yours, you must satisfy specific criteria that demonstrate a clear separation from your employer. If you fail these, you risk a legal claim of 'misappropriation' or 'breach of contract.'

• No Company Equipment: Do not use your work laptop, company-licensed software (e.g., Adobe, Jira, GitHub Enterprise), or company-provided cloud storage.
• No Company Time: Avoid working on your project during lunch breaks or while on the clock.
• No Trade Secrets: Do not incorporate any proprietary knowledge, client lists, or internal methodologies you learned at your job.
• No Business Overlap: Ensure the project does not compete with your employer’s current or 'demonstrably anticipated' business lines.

Action Item: Maintain a 'clean room' environment for your project. Use personal hardware and a personal email address for all development and communication.

How to Handle 'Prior Inventions' Disclosures

Many employment contracts include a 'Prior Inventions' schedule. This is a list of projects you owned before joining the company. If you have a side project that you started before your current role, you must disclose it here to protect it.

1. Review the Schedule: Locate the exhibit or appendix in your contract labeled 'Prior Inventions.'
2. Be Specific: Provide a brief, non-confidential description of the project.
3. Update Regularly: If your contract allows, provide updates to this list as you begin new, independent ventures.

Key takeaway: Failing to disclose a pre-existing project on the 'Prior Inventions' schedule can create a presumption that the project was created during your employment and is therefore owned by the company.

Action Item: If you have an existing side project, document its creation date and verify if it was disclosed during your onboarding process.

Conclusion

Protecting your intellectual property requires a proactive approach to contract review. Understanding the difference between an NDA and an Invention Assignment is the first step in ensuring your side projects remain your own. TermScore can automatically analyze your employment contracts to highlight risky assignment clauses and identify potential conflicts, giving you the clarity needed to build your projects with confidence.