Ask HN: Should a 'no side projects' policy be taken seriously?
My employment contract says the following:
"The rights to any intellectual property created by employee during his work shall be transferred to employer in full."
"The employee shall shall not be allowed to provide any services to another company and not to run any other business"
Is this sort of thing actually enforceable?
What would the process look like if I released a "competing" app independently, and the company wanted to take it down?
Or if they wanted to claim ownership over unrelated media, like a github repository?
I'm living in Cyprus. Does this mean I should be much less afraid of getting sued than if I were in the US?
70 comments
[ 3.4 ms ] story [ 145 ms ] threadTalk to a lawyer. But also, make plans to leave that job soon and go somewhere with a reasonable IP agreement.
It definitely is not ment to apply to things u do in your free time. As long as you do your stuff on your own hardware, it does not relate to IP or source code your employer owns, or does not provide competing services to your employer's customers, I don't see how your boss interprets that clause in such a way.
In addition I would check how 'work' is defined in your contract, since you are in EU as I am, I believe it usually mentions place where work is performed and work time from - to, work load (how many hours) and description of work. If the contract defines 'work' as any activity you do in your life that would be pretty jaw dropping.
If you have inside knowledge (ie not otherwise available) of your employer's app you might be on shaky ground, employee or not.
First three are obvious but you can be put on the hook for using skills and understanding obtained on company dime, too.
The process is the punishment: their license to sue is typically enough to force you to disgorge any IP rights -- unless you have free attorneys.
Incredibly naive if someone does this. In a employee/employer relationship, I believe one should only be loyal to themselves. Again, have integrity and don't steal stuff, but be loyal to yourself.
If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. They're here: https://news.ycombinator.com/newsguidelines.html.
That happens everyday. In fact most companies are found by people who already work in the industry. You simply should not steal trade secrets, copyright or patents.
1. Is it possible to explore obtaining an agreement from the company that the lawyer's bill (probably won't be more than two hours' worth of lawyer time) be foot by the company?
2. Independent of (1), and under general circumstances (not violent boss, etc.), should OP relate his lawyer's interpretation to his boss & company? (I'm guessing that most^ would answer this with a no -- boss is not going to follow OP around on the weekends to monitor his side project's progess).
^most who aren't bosses (hah)
That's why you hear about some tech founders offering their side project to the company they work for before they continue with their venture. The company can decide to keep it or you can agree with the company that they don't want it and you can keep it.
In theory, they can sell you the rights to your own project if that's what they want to do. It's what you agreed to in your contract.
In short, take it very seriously. If you have a side project that you think can be a successful venture for you then get an ok from your employer to make sure they have no claim on it.
Companies can sue anywhere but the further you are from them the harder it is. Like anything, you can always take your chances that it's not worth their time to pursue. But it's much easier to just get a release of all claims on your project from them.
Spare time isn't work though. Or does my company also own the food I made yesterday, the children I made...
I suspect in this specific case the company could have something to say because it's a competing product,but that would hinge on them arguing that the idea was worked on at work.
Further. Contracts state a number of hours, or at least there are limits to hours worked. How would it go down if you took Friday off because you were thinking about work on Tuesday evening?
This is in the EU, where you have actual employee protections.
But: if the company wants the fruit of the work you do outside of paid time, they should pay you 24/7.
If they decide that is not worth it, they should not expect to see any of your work.
So this might just be a very bad contract..? From the corp perspective I understand they would like to prevent you from creating a product that relates to their core business. This is only fair.
Maybe you can get them to allow certain different (unrelated to their core business) exceptions?
Assuming you are in tech / software development, that clause suggests you are not aloud, for example, to play in a band that is paid to perform at weddings at the weekend. That clearly isn't the intent of the clause.
Say you work in FinTech as a software developer, but at the weekend you want to make computer games. You are doing software development but it's in no way connected to your employment, again that is clearly not the intent of the clause.
Say you work in a specific industry, FinTech, Gaming or something, and you have an idea for a development tool that would aid people in your line of work, but isn't something that would be a "product" that your employer would make themselves as it's not their core business. It may be the kind of tool that your employer may purchase to make development easer, or to use in their backend. Then you should speak to them, pitch the idea, most good employers are likely to be happy for you to work on that sort of side project, especially if you let them use it for free or at a discount.
The closer your side project becomes to your day job the more likelihood you should speak to your employer first. If they are difficult about it, un justly, then it's an indication that it may be time to move on and find a new employer.
That is assuming the clause is enforceable in Cyprus, and isn't just legal intimidation.
That's better covered by an actual noncompete agreement than a general "we own anything you do no matter what" clause.
It doesn't matter what the boss thinks, it matters what the contract says.
I don't know what "refusing to make exceptions" means - what power do they have to make exceptions? Even if they agreed you could work on something, unless they changed the contract they can freely break that agreement.
I encountered this clause at a previous job and i did not sign anything until we agreed on an additional document stating that that clause does not apply. I got the advice of a lawyer and vetted the additional document before signing. This clause was not even legal in my country
Contract law should be taken seriously. Get a lawyer and see if you can push back. If you're not in the US and they really want you it might work.
Also, f** companies that have such clauses.
California notoriously voiding the anti-compete language so well that you can still comfortably sign a contract with the anti-compete language because you know its unenforceable. (This is seen as a key part of California's tech industry growth.)
Get a lawyer.
I feel like this question is kind of moot. If this company goes as far as putting it into the contract, they may try to fire/sue you even if it's not enforceable. Do you want to spend time in the court and money on a lawyer even if you'd win? If not, either comply or tell the company to take a hike.
I live in Ireland and these sorts of clauses are pretty standard, but I don't know how enforceable they are...there's a lot of nuance. For example, creating a direct competitor will probably put you on shaky ground as it could be argued that you used company trade secrets to gain an advantage.
If you create something completely unrelated it could come down to whether you used any company resources in the process i.e. a company laptop, company email, worked on the project during work hours etc. But even if you create something unrelated and didn't use any company resources that doesn't mean your employer won't try to enforce the clause which could result in a whole bunch of expensive litigation which you probably don't want to have to deal with.
What I have seen work is discussing any side projects (including open source) you're going to work on with your employer first and get written confirmation that they're waiving their right to enforce this clause. They may have legitimate concerns about what you're doing (is it competing with their business, will it be a distraction from your work etc) that you may have to address. This may not work in every case, but usually does.
Ultimately you need a paper trail to ensure you can prove the project wasn't something your employer was paying you for, but as I said if you anticipate your employer enforcing this clause you probably want to think hard about whether you want to have that fight.
Also, the employee "shall shall"? wtf?
Or maybe it just applies to Mr. Shall, first name Shall.
The first rule is: Go to a lawyer and discuss such matters with them. Consultations are cheap. Often you can get clauses you don't like stricken from the contract (I do this all the time, and as a bonus it helps filter out companies that will become a problem in future).
The second rule is: If they refuse to negotiate on the points you don't like, consider working somewhere else.
https://en.wikipedia.org/wiki/Standard_form_contract
But you don't want to get to the point where legal action is taken to test it.
If you released a competing app to your employer, I'd expect legal action.
I generally refuse to sign contracts that claim ownership over any IP I create out of work (although I would accept it if the IP in question directly relates to my employment).
Even if the company appears to have good will here, you need to be careful. One company I worked at went through a merger. Their lawyers tried to argue that the software I had created in my spare time now belonged to them. The original company would never have done that.
Luckily I had a different contract to the standard one as I had those clauses removed :).