What is the difference between an NDA and an Invention Assignment Agreement?

An NDA restricts you from sharing trade secrets. An Invention Assignment Agreement (or PIIA) transfers ownership of your intellectual property to your employer, often regardless of whether you used company resources.

How can I protect my side projects while employed?

Review your contract for 'Proprietary Information and Inventions' clauses, ensure you use zero company equipment, and negotiate an 'Excluded Inventions' list if your state law allows it.

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 prevent me from working on personal side projects during my own time?

Q: Does an employment NDA prevent me from working on personal side projects?

An NDA alone typically protects confidential information, not your work product. However, most employment contracts include 'Invention Assignment' clauses that claim ownership of anything you create, even on your own time. Always check your contract for these specific provisions.

An employment NDA (Non-Disclosure Agreement) typically restricts you from sharing trade secrets, but it does not inherently prevent you from working on side projects. However, most employment contracts contain separate 'Invention Assignment' clauses that claim ownership of your work product, even if created on your own time using personal equipment.

Understanding the Legal Distinction: NDA vs. PIIA

Employees often conflate NDAs with Proprietary Information and Inventions Agreements (PIIAs). While they often appear in the same document, they serve distinct legal functions:

NDA: Focuses on secrecy. It prevents you from disclosing proprietary data, client lists, or internal processes.
PIIA: Focuses on ownership. It dictates that any intellectual property (IP) you create during your employment belongs to the company.

Key takeaway: An NDA is a shield for the company's secrets; a PIIA is a claim on your future creative output. You can technically work on a side project without violating an NDA, provided you do not use the company's confidential information to build it.

The Danger of 'Scope of Employment' Clauses

Many contracts define the scope of your work so broadly that any project related to the company's business—or even 'demonstrably anticipated' business—is automatically owned by the employer. If you are a software engineer, a contract might claim ownership of any code you write, regardless of the subject matter.

Clause Type	Primary Restriction	Risk Level
NDA	Sharing trade secrets	Low (if you keep quiet)
Invention Assignment	Ownership of IP	High (loss of your project)
Non-Compete	Working for rivals	Very High (career limitation)

Action Item: Search your contract for the word 'Inventions' or 'Developments' to see if the language extends to work created 'entirely on your own time' without company resources.

Jurisdictional Protections: State-Specific Laws

Some states provide statutory protection for employees, limiting how aggressively an employer can claim your side projects. California, Washington, and Illinois have specific labor codes that invalidate invention assignment agreements if the work meets certain criteria.

California Labor Code Section 2870: An employer cannot require you to assign rights to an invention developed entirely on your own time without using the employer's equipment, supplies, or trade secrets, unless the invention relates to the employer's business or actual/anticipated research.
Washington RCW 49.44.140: Similar to California, this protects employees from being forced to assign rights to inventions created on their own time, provided no company resources were used.

Key takeaway: Even if your contract claims everything you create, state law may override those provisions. Always verify if your state has a 'Labor Code 2870-style' protection.

Action Item: Check your state's labor department website for 'Invention Assignment' statutes to see if your contract's language is legally enforceable.

How to Safely Develop Side Projects

If you intend to pursue a side project, follow this rigorous process to minimize legal exposure:

Audit your contract: Identify if you signed a PIIA and what the specific 'carve-outs' are.
Use zero company resources: Never use your work laptop, company-licensed software, or company email to work on your project.
Maintain strict separation: Do not work on your project during company hours.
Disclose (if required): Some contracts require you to list 'Prior Inventions' before starting. If your project existed before your employment, document it immediately.
Avoid conflict: Ensure your project does not compete directly with your employer's current or planned product lines.

Action Item: Create a 'clean room' environment for your side project—use a personal computer, personal cloud storage, and personal internet connection exclusively.

When to Seek Legal Counsel

If your side project has significant commercial potential, the risk of a future ownership dispute is high. You should consult an attorney if:

Your project is in the same industry as your employer.
You have access to highly sensitive trade secrets that could be 'accidentally' used in your project.
Your employer has a history of aggressive IP litigation.

Action Item: If you are unsure about your contract's language, do not guess. Use a professional tool to analyze the specific clauses before you invest time and capital into your project.

TermScore provides an AI-powered analysis of your employment agreements, instantly flagging restrictive invention assignment clauses and potential IP traps. By uploading your contract, you can identify exactly what your employer claims to own and where your personal rights begin, allowing you to build your side projects with total peace of mind.