What states have laws protecting employee side projects?

States like California (Labor Code 2870), Washington, Illinois, and Delaware have specific statutes that invalidate employment agreements claiming ownership of inventions developed entirely on an employee's own time without using company resources.

How can I protect my side projects from my employer?

Maintain strict separation: use personal hardware, personal software licenses, and personal time. Document your development process, and have your employment contract reviewed for 'Invention Assignment' clauses.

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Can an employment NDA claim ownership of personal side projects built without company resources?

Generally, no. If a side project is developed entirely on your own time, without company equipment, and does not relate to the employer's business, an NDA or Proprietary Information and Inventions Agreement (PIIA) cannot legally claim ownership. However, overly broad contract language can create significant legal risk and ambiguity.

Key takeaway: An NDA is primarily for confidentiality, but the 'Invention Assignment' clause in your employment contract is the real threat to your side projects. Always distinguish between the two.

The Legal Framework of Invention Assignment

Most employment contracts contain an Invention Assignment clause. This clause dictates that any intellectual property (IP) created during your employment belongs to the company. While these clauses are standard, they are not absolute.

The Three-Prong Test for Ownership

In many jurisdictions, for an employer to claim ownership of your work, the project must typically meet specific criteria. If your project fails any of these, it likely remains yours:

Time: The work must be performed entirely on your own time (evenings, weekends, or PTO).
Resources: No company equipment, proprietary software, trade secrets, or office space may be used.
Relevance: The project must not relate directly to the employer's current business, anticipated research, or development.

Action Item: Review your contract for the term 'Inventions' and check if it includes a 'carve-out' section that explicitly excludes your personal projects.

Jurisdictional Protections

Several states have enacted legislation to protect employees from overreaching employment contracts. These laws effectively override contract language that attempts to claim ownership of personal work.

State	Statute	Key Protection
California	Labor Code 2870	Invalidates agreements that claim inventions made on own time/resources.
Washington	RCW 49.44.140	Protects inventions not related to employer's business.
Illinois	765 ILCS 1060/2	Prevents employers from requiring assignment of non-work-related inventions.
Delaware	19 Del. C. § 805	Limits assignment to work related to employer's business.

Action Item: If you live in one of these states, your rights are significantly stronger. If you live in a state without these protections, your contract language is the final word.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific red flags that suggest your employer is trying to claim everything you build:

'Any and all' language: Clauses that claim ownership of 'any and all ideas, concepts, or inventions' regardless of when or where they were created.
Broad 'Business' definitions: Definitions of the company's business that are so vague they could encompass any software or creative work.
Lack of Exclusions: The absence of a 'Prior Inventions' list where you can disclose existing side projects before signing.

Key takeaway: If your contract lacks an 'Exclusions' or 'Prior Inventions' schedule, you are at risk. Create a list of your current projects and attach it as an addendum to your contract immediately.

Best Practices for Protecting Your IP

To ensure your side projects remain yours, you must maintain a strict 'air-gap' between your professional and personal work.

Hardware Separation: Never use your work laptop for personal coding or design. Keep a dedicated personal machine.
Software Licenses: Do not use company-provided software licenses (like Adobe Creative Cloud or IDE subscriptions) for personal projects.
Network Security: Do not push personal code to company-managed GitHub or GitLab repositories. Use a personal account on a separate network.
Documentation: Keep a log of when you work on your project to prove it was done outside of business hours.

Action Item: Audit your digital workspace today. If you find company-related files on your personal machine, move them to a secure, company-approved location immediately.

How TermScore Simplifies Contract Analysis

Navigating the legal jargon of employment contracts is complex, and missing a single clause can cost you the rights to your intellectual property. TermScore uses advanced AI to scan your employment agreements, identifying aggressive Invention Assignment clauses and highlighting potential risks to your side projects. By providing clear, plain-English summaries and flagging problematic language, TermScore empowers you to negotiate with confidence and protect your creative output before you sign.