Are non-compete agreements enforceable for side projects?

Enforceability depends on your jurisdiction. In states like California, non-competes are largely void. In other states, they must be reasonable in scope, duration, and geography to be enforceable.

What is an Invention Assignment Agreement?

An Invention Assignment Agreement is a contract clause stating that any intellectual property you create during your employment—even on your own time—belongs to your employer if it relates to their business or uses their equipment.

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.

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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.

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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.

Can an employment NDA legally restrict me from working on personal side projects during my off-hours?

Q: Can an employment NDA legally restrict me from working on personal side projects?

An NDA alone typically protects confidential information, not your right to work. However, many employment contracts include 'Invention Assignment' or 'Non-Compete' clauses that can legally restrict side projects if they relate to your employer's business or use company resources.

Can an employment NDA legally restrict me from working on personal side projects?

An NDA (Non-Disclosure Agreement) is designed to protect trade secrets, not to prevent you from working. However, employers often bundle NDAs with 'Invention Assignment' and 'Non-Compete' clauses. If your contract contains these, your employer may legally claim ownership of your side projects or prohibit them entirely if they compete with company interests.

Understanding the Difference: NDAs vs. Restrictive Covenants

It is critical to distinguish between the three types of clauses often found in employment contracts. Confusing these can lead to significant legal exposure.

NDA (Non-Disclosure Agreement): Restricts you from sharing proprietary company data. It does not stop you from working on your own projects, provided you do not use their confidential information.
Invention Assignment Agreement: States that any work product created during your employment belongs to the company.
Non-Compete Clause: Prohibits you from working for a competitor or starting a business that competes with your employer.

Key takeaway: An NDA is rarely the legal mechanism used to stop side projects. Look for 'Invention Assignment' or 'Conflict of Interest' clauses instead, as these are the primary tools employers use to claim your personal work.

Action Item: Review your employment contract for the specific header 'Intellectual Property' or 'Proprietary Rights' to see if your side work falls under their ownership scope.

The Role of State Law and Jurisdiction

The enforceability of these restrictions varies wildly by state. Your location dictates your leverage.

Jurisdiction	Enforceability of Non-Competes	Invention Assignment Protections
California	Strictly Prohibited (BPC 16600)	Strong (Labor Code 2870)
New York	Reasonableness Test	Moderate
Texas	Enforceable if 'Reasonable'	Employer-Friendly

California Labor Code 2870

California provides the strongest protection for employees. Under Labor Code 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, facilities, or trade secret information, unless the invention relates directly to the employer’s business or actual/demonstrably anticipated research.

Action Item: If you live in a state with strong labor protections, verify if your contract includes a 'carve-out' clause that explicitly excludes your personal projects from the scope of the agreement.

Red Flags in Your Employment Contract

When reviewing your contract, watch for these specific phrases that signal potential trouble for your side projects:

'All work created during the term of employment': This is overly broad and potentially unenforceable in many jurisdictions.
'Any business related to the company’s field of interest': This vague language can be used to claim ownership of almost any tech-related project.
'Sole and exclusive property of the company': This language leaves no room for personal ownership of IP.
'Prior approval required': This forces you to disclose your side projects, which may lead to employer interference even if the project is unrelated to your job.

Key takeaway: If a clause is too broad, it may be unenforceable. However, you should never assume a clause is void without consulting a local employment attorney, as 'blue-penciling' (where a judge strikes out only the illegal parts) is common.

Action Item: Create a list of your side projects and compare them against your employer's 'Business Purpose' statement in your contract. If there is no overlap, you are in a much safer position.

How to Protect Your Side Projects

Use your own equipment: Never use company laptops, software licenses, or cloud accounts for personal work.
Maintain strict time separation: Work on your projects only during non-working hours.
Document everything: Keep a log of your development process to prove that no company resources were utilized.
Disclose if necessary: If your contract requires disclosure, provide a narrow, written description of your project that emphasizes its lack of connection to your employer’s business.

Final Thoughts on Contract Analysis

Navigating the intersection of employment law and intellectual property is complex. TermScore allows you to upload your employment agreement to instantly identify restrictive covenants, invention assignment traps, and non-compete clauses that could jeopardize your personal projects. By using AI to highlight these specific risks, you can negotiate better terms or ensure your side work remains yours.