What states have laws protecting employee side projects?

California (Labor Code 2870), Washington (RCW 49.44.140), Illinois (Employee Patent Act), and several others have specific statutes that invalidate employment contract clauses claiming ownership of inventions created on your own time without company resources.

How can I tell if my contract is too restrictive?

Look for language that claims ownership of 'all ideas conceived during employment' regardless of whether company equipment or time was used. If the clause lacks a carve-out for personal projects, it is likely overbroad and potentially unenforceable.

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.

Can an employment NDA legally override my right to work on personal side projects during weekends?

Q: Can an employment NDA legally override my right to work on personal side projects?

Generally, no. While NDAs protect trade secrets, they cannot legally prevent you from working on unrelated side projects. However, 'Invention Assignment' clauses often found alongside NDAs can claim ownership of your work if they are overly broad or violate state labor codes.

An employment NDA alone cannot legally prevent you from working on personal side projects. However, most employment contracts include 'Invention Assignment' clauses that can claim ownership of your work. Whether these are enforceable depends on your jurisdiction, the use of company resources, and the scope of the project.

The Critical Distinction: NDAs vs. Invention Assignment Agreements

Employees often conflate Non-Disclosure Agreements (NDAs) with Intellectual Property (IP) Assignment Agreements. Understanding the difference is the first step in protecting your side hustle.

NDAs: These are designed to prevent the unauthorized disclosure of confidential information. They do not inherently stop you from working; they only stop you from using your employer's proprietary data to do so.
Invention Assignment Agreements: These are the clauses that actually threaten your side projects. They dictate who owns the code, designs, or inventions you create while employed.

Key takeaway: An NDA is a shield for your employer's secrets, but an Invention Assignment clause is a sword that can claim your personal work. Always check your contract for both.

Action Item: Review your employment contract specifically for the section titled "Proprietary Information and Inventions Agreement" (PIIA) rather than just the NDA section.

State-Specific Protections for Side Projects

Several states have enacted legislation to protect employees from overly aggressive IP assignment clauses. If you live in one of these jurisdictions, your employer's contract may be legally unenforceable to the extent that it conflicts with state law.

State	Relevant Statute	Key Protection
California	Labor Code 2870	Protects inventions made on own time without company resources.
Washington	RCW 49.44.140	Invalidates agreements requiring assignment of inventions unrelated to employer business.
Illinois	Employee Patent Act	Prevents employers from claiming inventions developed entirely on personal time.
New Jersey	N.J.S.A. 34:1B-265	Limits assignment of inventions not related to the employer's actual business.

Action Item: Search for "[Your State] employee invention assignment law" to see if your state provides a statutory "safe harbor" for your personal work.

Red Flags in Your Employment Contract

When analyzing your contract, look for these three common "overreach" indicators that suggest your employer is trying to claim more than they are legally entitled to:

The "Any and All" Clause: Language that claims ownership of "any and all ideas, concepts, or inventions conceived during the term of employment," regardless of whether they relate to the company's business.
The "Company Equipment" Trap: Clauses that claim ownership if you use *any* company resource, including a company-issued laptop or even a company-provided email address, to work on your project.
The "Related to Business" Ambiguity: Broad definitions of "company business" that could be interpreted to include almost any software or creative project.

Key takeaway: If your contract claims ownership of work created entirely on your own time, using your own equipment, and unrelated to your employer's business, that clause is likely unenforceable in many states.

Action Item: If you find these red flags, document your work process. Keep a clear log of hours worked and ensure you are using 100% personal hardware and software licenses.

How to Protect Your Side Projects

If you are worried about your current contract, follow this systematic approach to mitigate risk:

Audit your contract: Identify if there is an Invention Assignment clause.
Check for carve-outs: See if there is a "Prior Inventions" section where you can list existing projects to exclude them from the agreement.
Maintain strict separation: Never use company Slack, email, GitHub, or hardware for your side project.
Negotiate: If you are starting a new role, ask for a "Side Project Addendum" that explicitly permits your outside work.

The Role of AI in Contract Analysis

Manually parsing dense legal jargon is prone to error, and missing a single "assignment of rights" clause can cost you the ownership of your startup. TermScore uses advanced AI to instantly scan your employment agreements, flagging restrictive IP clauses and comparing them against state-specific labor laws. By identifying these risks early, you can negotiate with confidence or adjust your workflow to ensure your personal projects remain yours alone.