Can an employment NDA legally restrict me from working on open-source projects?

Can an employment NDA legally restrict me from working on open-source projects?

An employment NDA typically restricts the disclosure of confidential information, but it is rarely the primary tool used to claim ownership of your open-source work. Instead, companies use 'Invention Assignment Agreements' to claim rights to your code. Whether these are enforceable depends on state law and whether you used company resources.

Key takeaway: An NDA prevents you from sharing trade secrets, but an IP Assignment Agreement is what actually threatens your ownership of open-source contributions. Always check for both clauses in your employment contract.

Understanding the Legal Framework

Most employment contracts contain two distinct types of clauses that impact your ability to contribute to open-source software (OSS):

• Confidentiality/NDA Clauses: These prohibit you from sharing proprietary company data, algorithms, or internal business strategies.
• Invention Assignment Agreements: These state that any intellectual property (IP) created during your employment—and sometimes even on your own time—belongs to the employer.

If your contract states that 'all work created during the term of employment' belongs to the company, you are at risk. However, many jurisdictions provide statutory protections to prevent employers from overreaching.

The Role of State Law

In states like California, Washington, and Illinois, there are specific statutes that limit an employer's ability to claim ownership of your side projects. For example, California Labor Code Section 2870 provides that an employer cannot require you to assign rights to an invention if:

• The invention was developed entirely on your own time.
• No company equipment, supplies, facilities, or trade secret information was used.
• The invention does not relate to the employer's business or actual/demonstrably anticipated research.
• The invention does not result from work performed for the employer.

Action item: Research your specific state's labor laws regarding 'employee invention assignments' to see if you have statutory protection.

Comparison: NDA vs. IP Assignment

How to Protect Your Open-Source Contributions

If you are a developer who contributes to the open-source community, you must take proactive steps to ensure your side projects remain yours.

1. Review your contract: Look for sections labeled 'Proprietary Information,' 'Inventions,' or 'Intellectual Property.'
2. Request an IP Exclusion: If you have existing projects, list them in an 'Excluded Inventions' exhibit attached to your contract.
3. Use personal hardware: Never push code to GitHub or other repositories from a company-issued laptop.
4. Get written consent: If you plan to start a new project, email your manager or HR department and get a written waiver stating the company has no claim to the project.
5. Avoid company trade secrets: Never use internal company logic or proprietary data in your open-source code.

Key takeaway: A verbal 'okay' from your manager is insufficient. Always secure a written waiver or an email confirmation that explicitly disclaims the company's interest in your specific open-source project.

Identifying Red Flags in Your Contract

When reviewing your employment agreement, watch for these common 'overreach' phrases that could jeopardize your open-source work:

• 'All work created during the term of employment': This is overly broad and potentially unenforceable in states like California.
• 'Related to the company's business': This is often interpreted so broadly that it could cover almost any software development.
• 'Any and all ideas, concepts, or inventions': This language is designed to capture your intellectual output even if it is unrelated to your job duties.

Action item: If you find these phrases, consult with an employment attorney or use an automated analysis tool to identify the specific risks before signing.

Conclusion

While an NDA is a standard part of employment, it should not be a barrier to your professional growth in the open-source community. By understanding the distinction between confidentiality and IP ownership, and by leveraging state-specific protections, you can safely contribute to the projects you love. TermScore can automatically analyze your employment contracts to flag overly broad IP assignment clauses and restrictive NDA language, giving you the clarity you need to negotiate your terms with confidence.