Ask HN: Should a 'no side projects' policy be taken seriously?
70 comments
Ignore advice on the internet and get a lawyer instead.
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.
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.
To be honest.. if I needed to consult a lawyer for a new job I would just find another job.
Yea I mean it's good advice to get a lawyer, but imagine you had to do that for every job offer. You'd be spending so much upfront just to get a job. And they don't even reimburse you for the cost of the modified contract from the hired lawyer if you accept.
"Well, about this provision..."
"That's non-negotiable."
"You want to own all of my intellectual property? All of it?"
"Yes."
"Can you explain to me why you want to own nude photos of my wife?"
"What?"
"What are you planning to do with my MBA assignments? Do we need to have a conversation about plagiarism?"
"That's not what I..."
"Okay then. Let me know when you decide what you do mean and we can negotiate about the appropriate language."
"That's non-negotiable."
"You want to own all of my intellectual property? All of it?"
"Yes."
"Can you explain to me why you want to own nude photos of my wife?"
"What?"
"What are you planning to do with my MBA assignments? Do we need to have a conversation about plagiarism?"
"That's not what I..."
"Okay then. Let me know when you decide what you do mean and we can negotiate about the appropriate language."
I've had companies try to take my OSS projects. It seems that the smaller the company, the greater the likelihood that they'll try (you can get some real dicks who go on power trips in small companies, whereas larger companies tend to have a bureaucracy tempered by good lawyers and usually cooler heads).
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.
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.
Caveat: Once the contract has been modified for your specific case, all ambiguous clauses (and there are many that laymen cannot identify as ambiguous) are no longer considered unfavourable towards the employer by default. This is because that one simple change renders the contract as longer being a Standard Form Contract.
https://en.wikipedia.org/wiki/Standard_form_contract
https://en.wikipedia.org/wiki/Standard_form_contract
Playing devils advocate .. what if you created something illegal? Warez site for example. Or a BitTorrent site. Wonder how that would play out in court.
Doesn't even need to be illegal, just really bad for their reputation. There's a reason companies like to plaster everything with "This doesn't necessarily reflect our opinion", here they're doing the exact opposite. Any kind of questionable content in any medium is automatically their IP? Good luck.
I'm not a lawyer, but first clause and it's variations are common in contracts and it's ment to protect the rights of company for IP developed at work.
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.
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.
It doesn't say anything about location or work hours in the contract. (I guess to avoid responsibility for periods of crunch)
It's not just crunch, it's to have the ip rights for anything you create during your downtime they might want to use/sell.
is this a contract with US or company outside of EU? the contract should mention the court jurisdiction in case of a legal dispute, my contracts in past always mentioned it
Yes it should be taken seriously, even if the company claimed it was not to be taken seriously. Whether it's enforceable or not or to what it really applies is irrelevant. The important thing is that they may sue you for anything you may create while you work there. The question you should ask yourself is, "do I want to find out." My advice, since your boss's response wasn't something like "Oh, that's just required by our investors, we are going to give you an exception on the thing you want to work on.", don't work on any side thing while there, and walk out as soon as possible.
Or tell your boss that this will be the reason for walking out. If they want to keep you this exception has to be put in writing.
Yes, any project that you create while you are employed by the company, company time or your time, belongs to them. That's what you agreed on when you signed the contract.
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.
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.
I don't think this should be taken as legal advice. Though it reflects the strict wording of the contract, most jurisdictions apply a reasonable filter to this. We also don't know what law the contract is subject to unless I missed it on my quick read.
"created by employee during his work"
Spare time isn't work though. Or does my company also own the food I made yesterday, the children I made...
Spare time isn't work though. Or does my company also own the food I made yesterday, the children I made...
The food and the children are not intellectual property, if the recipe is original though, they technically own it.
IANAL but I'm fairly confident that would only apply if you are employed as someone who develops recipes. If you are a software developer no court will decide your employer owns the recipe you invented.
If you create the recipe at work maybe (but doubtful). Signing an employment contract isn't signing away your soul to the devil though.
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.
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.
And if you do seek permission, get it in writing.
is this US concept where you are hired to do a job as opposed to Europe where usually working time is fixed and defined?
Read your contract -- it should specify what court has jurisdiction. That will determine enforceability.
Talk to a lawyer. But also, make plans to leave that job soon and go somewhere with a reasonable IP agreement.
Talk to a lawyer. But also, make plans to leave that job soon and go somewhere with a reasonable IP agreement.
The "during work" part is ambiguous. I read this to mean during working hours. The boss seems to be interpreting it as "while employed", so including spare time.
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 :).
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 :).
A few comments here point the OP/ hint to the OP that a lawyer be consulted. This is likely a good move.
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)
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)
Presumably, the side project you want to work on is valuable. It's worth paying the lawyer out of your own pocket -- you want the lawyer to be working for you, not the employer. And the lawyer should not also be a lawyer of the company -- the lawyer should not have a conflict of interest.
good point!
This is one of these grey areas where the clause is in the contract mostly to deter the employee from working in the same industry on the side, poaching clients, or using your position in the company to build a competing business on the side.
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.
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.
The text of the contract isn't limited by 'intent'. Relying on what they might have intended, but not written, is legally throwing yourself at their mercy.
That is assuming the clause is enforceable in Cyprus, and isn't just legal intimidation.
That is assuming the clause is enforceable in Cyprus, and isn't just legal intimidation.
Exactly, and why talking to an employer is important. IANAL but my understanding is that courts often have to decide what the "intent" of a clause is in a contract - thats what I am referring to, and you don't want to end up in court arguing over "intent".
If it's not in the contract, it doesn't exist.
> This is one of these grey areas where the clause is in the contract mostly to deter the employee from working in the same industry on the side, poaching clients, or using your position in the company to build a competing business on the side.
That's better covered by an actual noncompete agreement than a general "we own anything you do no matter what" clause.
That's better covered by an actual noncompete agreement than a general "we own anything you do no matter what" clause.
I'm not a lawyer and the best advice is to check everything with a lawyer...that said it sounds like the contract would be covered by Cypriot and (if you're in the south) EU law.
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.
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.
[deleted]
"the boss is defensive about the first part applying to"..
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.
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.
That's a contractual term that I've seen in 2/3 of such contracts. I consider it unacceptable and negotiate its removal. I've never received much pushback to that.
If they wouldn't remove it, that's a showstopper. It's such a serious thing that I would certainly pass on the job.
If they wouldn't remove it, that's a showstopper. It's such a serious thing that I would certainly pass on the job.
I had to deal with this recently. Apparently these are "standard templates".
I hired a lawyer to rewrite that section to have a clearly split for side stuff and the company's stuff as well as the other invention assignment sections. See github's for an example of a fair agreement https://github.com/github/balanced-employee-ip-agreement). The company accepted it and everyone was happy.
If the company doesn't accept that they have no business taking ownership of completely unrelated stuff you do outside of work hours find another company to work for, they clearly don't care about you as a person.
I hired a lawyer to rewrite that section to have a clearly split for side stuff and the company's stuff as well as the other invention assignment sections. See github's for an example of a fair agreement https://github.com/github/balanced-employee-ip-agreement). The company accepted it and everyone was happy.
If the company doesn't accept that they have no business taking ownership of completely unrelated stuff you do outside of work hours find another company to work for, they clearly don't care about you as a person.
>I'm living in Cyprus. Does this mean I should be much less afraid of getting sued than if I were in the US?
Many places in the world, the copyright produced goes to the producer and not employer. Hence why these need to exist.
However, this isn't the take you need to be concerned with. If they have this, you know some talented lawyers have been engaged.
You know this employer is litigious, you know they are actively talking to lawyers. Why? Do they have lots of ex-employees they are effectively stealing their project from? Or are they just shitty employers who constantly have legal problems?
Frankly when I see something like this, I would walk calmly in the other direction.
Many places in the world, the copyright produced goes to the producer and not employer. Hence why these need to exist.
However, this isn't the take you need to be concerned with. If they have this, you know some talented lawyers have been engaged.
You know this employer is litigious, you know they are actively talking to lawyers. Why? Do they have lots of ex-employees they are effectively stealing their project from? Or are they just shitty employers who constantly have legal problems?
Frankly when I see something like this, I would walk calmly in the other direction.
I am not from the US so I don't know what kind of dystopian regulations you guys got over there.
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?
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?
Yes, you should take it seriously, and in the US this would be several issues, some of which are in the employer's favor federally, and some parts like whether - - you can compete or not - are regulated at the state level.
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.
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.
The language is ambiguous and childish, nothing like I would expect to find in a legal document written by an adult and meant to be legally binding or even taken seriously.
Also, the employee "shall shall"? wtf?
Or maybe it just applies to Mr. Shall, first name Shall.
"The employee shall shall not be allowed to provide any services to another company and not to run any other business"
Also, the employee "shall shall"? wtf?
Or maybe it just applies to Mr. Shall, first name Shall.
Like, just don't work there?
Just over 20 years since the (absolutely related and relevant) Ben Tilly drama in Perl land: https://developers.slashdot.org/story/02/03/21/0139244/bewar...
> Is this sort of thing actually enforceable?
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 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.
If it's just code and there is no money involved, then it's not a business - A business necessarily involves customers and money. Of course company directors will tend to say that side projects are not allowed; they prefer it if their employees don't do (in order to protect the company's interests).
> What would the process look like if I released a "competing" app independently, and the company wanted to take it down?
If you have inside knowledge (ie not otherwise available) of your employer's app you might be on shaky ground, employee or not.
If you have inside knowledge (ie not otherwise available) of your employer's app you might be on shaky ground, employee or not.
Just make your projects very expensive for them to run at scale, like building them on top of AWS and several other cloud services. If you ever get out of the company the know-how will be yours and then you can create an optimized version.
> "The rights to any intellectual property created by employee during his work shall be transferred to employer in full."
It says "during work", so anything created in your spare time is out of the question, isn't it?
It says "during work", so anything created in your spare time is out of the question, isn't it?
Cyprus might as well be Russia for all the protection you'd get from the law.
Tell them to clarify what "during his work" means
Either during work hours or during work contract, enveloping all hours including weekends (unlikely).
If it's the latter, walk away.
Either during work hours or during work contract, enveloping all hours including weekends (unlikely).
If it's the latter, walk away.
It should be taken seriously, by not remaining at that workplace and seriously looking elsewhere.
I very specifically avoid this language. No one has a right to my creativity.
It’s not enforceable if the employer cannot prove beyond reasonable doubt that you have used company resources on it. Time, hardware, IP, skills, domain knowledge.
First three are obvious but you can be put on the hook for using skills and understanding obtained on company dime, too.
First three are obvious but you can be put on the hook for using skills and understanding obtained on company dime, too.
No jurisdiction uses "beyond reasonable doubt" as the standard of proof for contract disputes.
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.
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.
Based. If what you're working on isn't even within the same realm as corporate, why should they care? Build it, get a new job, and release it. Stop letting corporate take what isn't theirs
It depends on what state's or country's laws the contract is signed under. Some jurisdictions are more unreasonable (from engineer's perspective) than others.
As an employee you have a duty of loyalty to your employer. I’m not sure about side projects generally, that is probably a Cyprus specific question. But I’d be shocked if it’s legal anywhere to release a product that competes with what you work on at your job. That’s just common sense. You would likely be violating not just your employment contract, but also trade secret, copyright, patents, etc. This is egregious enough behavior to even be criminally charged in many places.
'As an employee you have a duty of loyalty to your employer'
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.
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.
This is a legal concept. You have to be loyal to your employer. You can’t intentionally undermine their business, charge them for hours you didn’t work, etc. It doesn’t mean that you have to go out of your way to advance their ends.
Maybe the word "loyal" is confusing here. I'm not aware of any legal requirement for loyalty. There's a legal prohibition against fraud and such, though.
It is literally called a duty of loyalty in many legal systems. Something you could have easily confirmed with a quick Google search in half the time it took to write your comment.
Which jurisdiction, can you cite precedent?
Quick Google shows this to be true in common law jurisdictions and every civil law jurisdiction I saw relevant information on.
> But I’d be shocked if it’s legal anywhere to release a product that competes with what you work on at your job.
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.
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.
Everything can be a trade secret. They’re not labeled with a stamp that says “Trade Secret”. If you’re working on a direct competitor to something you make at work, you are almost certainly stealing trade secrets without even realizing.
Hmm yes, in the same way they are loyal to employees despite being able to fire them with no notice? Terrible ideology.
nopehnnope(1)
And the boss is defensive about the first part applying to anything created in the spare time as well, also refusing to make exceptions.
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?