> Not related to your employer’s line of work. Um, wait. What’s the definition of related? [...] I don’t know. It’s a big enough ambiguity that you could drive a truck through it.
No, it's not that ambiguous at all. The courts rarely side with the company, and only in cases where it's quite obvious the work was directly related. If your side project isn't directly related to the work you are doing, then you don't need to worry.
Don't let Joel or any other tech CEO scare you into not working on side-projects. Don't even tell your employer about side projects. Leave them out of the loop entirely.
You don't quite understand Joel's point. Regardless of whether you are legally right, a larger company could sue you for the sake of suing, and make your life very miserable. And if the fight continues and you run out of money, what then?
I had exactly that thing. I was being bought-out and a small client decided (against the contract that they had signed) that the changes we had made to our mortgage broker commission system were their own IP, and that they would suffer damage if those changes were part of the overall IP we were selling to our prospective buyers. And it was absolute nonsense since their changes were just a collection of reports and small features which were part of the public domain since whenever. It took weeks to iron-out the agreement and obviously could have scuttled the buyout.
And when I left the company that bought me out to start another project, I made sure that I had a release to say that I'm indemnified against any future legal actions and I started the project the day after I got that release.
The old adage is correct: plan for the worst, hope for the best.
> You don't quite understand Joel's point. Regardless of whether you are legally right, a larger company could sue you for the sake of suing, and make your life very miserable. And if the fight continues and you run out of money, what then?
Don't work for companies that are dicks. If there's crap about them wanting to own you or your thoughts, don't sign it and get a different job elsewhere.
Remember when little kids would die in factories doing dangerous jobs? No? Me neither. Know why? Because at some point people had enough, went on strike, attitudes and laws changed. If you live in an area where your employer can make your life miserable for no apparent reason, or where your employer can own you outside of work, then you need to help put a stop to that madness.
> Don't work for companies that are dicks. If there's crap about them wanting to own you or your thoughts, don't sign it and get a different job elsewhere.
That's Joel's whole point, almost every single company had these restrictions written into your contract. And it's not possible to know if they're "the nice ones" who won't sue you ahead of time.
Simple. Don't work as an employee. This is the one industry where it really isn't that difficult. I took the leap 5 years ago and within 3 years quadrupled my income and have complete autonomy and freedom.
I'm not a software dev or tech worker. But I hope you guys do this.
I may have just drunk too much HN kool-aid, but software devs seem to be criminally under-valued and often exploited (see Crytek thread on front page, for example). Then there's guys like Bezos who, after underpaying and exploiting you, will replace you with a machine-learning algo the second it is technically feasible and a net positive to the company bottom line.
I've also noticed some interesting features of the software development labour market: quite a lot of the work is creative in nature, you produce non-rivalrous products (i.e. my consumption of 'software x' does not block someone else's consumption), and the workforce is supposedly peppered with unusually talented individuals who produce 50-100x the value that the average worker does.
There are two other industries that have similar features: traditional screen entertainment (TV & Movie), and professional sports leagues. In both of these industries, the content producing workers (baseball players, actors) are invariably a member of an industry guild or union, and operate more like independent contractors than employees...
I did this as well. Best thing I ever did. However I find that when Isuggest this, people have all the reasons in the world not to. More $€ for us then.
There's a time-tested solution to this: one of the functions of these sorts of organisation could be to provide legal representation for their members. Unions, for instance, will often supply professional advocates (i.e. lawyers, negotiators etc.) to members in employee-employer or even professional-industry legal disputes.
It's often said on HN that skilled software developers are more akin to 'craftsmen' than they are to 'employees'. There's a number of good reasons why craftsmen have, almost invariably throughout history, formed guilds, unions or 'professional associations'...
You either organise or you accept being exploited.
I really disagree with this. The law is a type of magic.It's socially constructed. The idea of blind justice is sort of a fairytale. Reality shows us that some of the most powerful get away with murder while the people least able to defend themselves take plea deals rather than fight charges.
You may be technically correct (the best kind of correct, of course), but companies do love their options. And for you to be able to take them away, you need to have some kind of negotiation leverage. If you're Geoffrey Hinton, you've got what you need; if you're Joe Schmoe, chances are you don't.
No you can't. Anyone can sue you any time for any reason, and then it's just a matter of how badly you are going to lose: because even "winning" means you wasted tens of thousands of dollars, at minimum, paying lawyers to defend you.
Your only defense, as a small player, is not to be noticed.
> And when I left the company that bought me out to start another project, I made sure that I had a release to say that I'm indemnified against any future legal actions and I started the project the day after I got that release.
How do you force a company to do something like that? What's in it for them to agree, especially when you're leaving?
I had come to them with a couple of ideas during my employment which they had rejected but I said I may pursue. In addition, they had purchased my company so as with most buyouts there was the usual cultural and operational issues between myself and upper management. So I framed it that it would be good for both parties to release each other from any future claims and we could both go on our merry ways.
The way you handle this as a typical employee is to not work for dicks. That way when they see you being successful they cheer you on rather than try to bring you down.
Also, you don't always have no leverage to negotiate contract terms. When I separated from my last job, my severance agreement as given to me included a 2 year gag clause keeping me from talking about it to anyone. I negotiated it down to six months, using the time-honored tactic of bitching until I got my way.
Bitching is a useful tool in the kind of low-stakes environment that most employee negotiations happen in. Legal action is the equivalent of nuclear warfare, if you're willing to bitch about something, the company, so long as you're not working for a bunch of dicks, is going to eventually open up about what they need to get out of a particular contract clause. This paves the way for a gentleman's agreement whereby you agree to not fuck their shit up, and they agree to not fuck yours up.
In my case, what they wanted was for me to not lead an employee charge for better perks / compensation, and I just wanted to be able to yak about it on Hacker News. So I agreed to keep my mouth shut to my fellow employees about the agreement, and they agreed to reduce the length of the gag clause.
But again, you can't be working for a bunch of dicks. You need to maintain good relationships with your bosses and company leadership and your work output and ethic should never be in question. You are, in other words, loyal to each other. It's great to be ambitious and to want more out of life, but you shouldn't stomp all over the people who are helping you to get there.
Every time I've ever seen one of these "former employer fucked with me after I moved on" stories, the employee in question was clearly working for a bunch of dicks. Your intuition is your most valuable asset as a little guy. Your chances of getting stepped on can range from 0% all the way up to 100% if you're working in the entertainment biz where stepping on little guys is just the culture. You don't have to bury your head in the sand and ignore the risk.
Just be careful. A company and its board isn't a person - it's a legal entity. The company exists solely to make profit. That's it. And, the company will do everything in its legal power to do so. It doesn't matter what the intent of the founders were, nor how nice your boss or even the current owners are. They are not the company.
Plus, I've seen way too many nice people turn into 'dicks' when it came down to money. This is the primary reason why it's a bad idea to go into business with friends or relatives.
I'd argue that the primary reason you don't go into business with friends or relatives because 99% of the time, they're not looking to do any real work or take on any real risk. Hire friends and relatives after the business is de-risked, not before.
Anyone forming a company in England & Wales, also, might benefit from a chat with someone with long experience as a company director, or professional secretary, or even better a insolvency practitioner. If none are to hand, the staff at Companies House are unable to provide opinions, but I found they are ready to give well rounded observations which might make anyone think twice as to the value of relying on Companies Act, to protect their rights. At least the Act, alone. I've even enjoyed a very candid conversation at some length with the Registrar Of Companies, when the last major Act came into force, and she was incredibly helpful and illuminating, explaining the nuances of her statutory role and its offices. For guidance as to effect of Articles or Association, please do ask their Compliance office. Articles or Table A are the bylaws of a company, and many sharp operators will try to get Companies House to accept heavily modified articles, which contradict or attempt to restrict, statutory rights, roles or obligations. There was once a inactive registered company, names Silverstone blah blah management, about the time of a rumoured bid for control of the motor racing circuit. I pulled the Table A, and none to my surprise, almost every page of it was marked in the margin, alongside almost every paragraph, with a dot or a code, indicating Compliance was highly suspect of this document, as to its legality. But, as Compa ies House began to intone by reflex, I remember the information becoming a mantra when inquiring about almost anything, they are only a records office, not enforcers. The Registrar told me in addition, that that year sh had budget and allowance (I got the sense as if she felt it was a deliberately token allowance, arbitrarily set somehow and not under her budgetary power, to prosecute four directors each month, for technical breaches of the law. I had presented her office with a single director, for whom records tallied literally hundreds of summary offences.
Larger but less scrupulous or less publicly reported companies, flout the law routinely, a trivial cost of doing business. Small fly by nights and sham "business partners" you may encounter, may roll right over you, in a instant. You might be a director and have majority equity in common shares, but another director may (quite unlawfully, but see further) de-register you as a director, call a company meeting, if one is even required, dilute you to nothing, seek shareholder approval for consolidating fraudulent actions, like divesting working capital via special dividend, and banks will almost in every single case, do as they are told if the right forms are provided. You will sure have recourse under the Act, and many summary (not tried but assessed on the facts by a judge) offenses are criminal and even punishable by imprisonment, but you would be lost without a proper management contract and ideally a law firm of repute contracted as Company Secretary and that contract specifying detailed additional procedures, even clerical checks and notifications help here, and ultimately if thus sort of thing happens, you are in real trouble with little real recourse and no immediate remedy.
That's a mere taste of the fun which can be English Limited Companies!
From memory, and it's long since I undertook any comparative study, only Sweden has laws which truly make a manager / managing director, responsible for their behaviour, under real penalty. Obviously, don't take my word for it, but I was seeking answer to just this: "So where can I risk turning my back one second, on a limited company I invest in?", and Sweden was the only jurisdiction which I felt satisfied me.
oops, p.s. re my hypothetical of a director abusing powers:
digital signatures and other online filing is of course potential safeguard to much abuse,
but how many accountants are given those keys, to file reports, and how many accountants will typically be contracted to accept instruction solely from two simultaneous directors authorizing together?
I has one bank account, where it's never been possible to get the bank to enforce the |two signatures required| rule that was supposed to be created on ticking the obvious, simple, standard feature, option box on their form!
I personally think the way to go with UK entities, is to ensure all company compliance is handled by a larger or larger accountancy, and to begin the contract with a obligation to report "any notable alteration or variation from last known fully authorized intent as mandated by a order approved by the full board", with requirement to cease work until they have a appropriate (by scale, with "if in doubt, require every approval as if the contract is void" e.g, written responses from directors, not mere "informed by email at 03.42hrs Saturday".
But that is expensive, of course.
I can no longer neatly summarise, and I would be woefully out of date anyhow, how the principles of England & Wales company law, tend to uphold directors powers, almost to omnipotence.
But the actual Companies Court, a branch of the High Courts, has teeth, if you apply to it.
I never looked up if this was affected by recent legislation, and I cannot even recall the case docket any longer, but a 1973 case caused a director to be disqualified fro life from being involved in any company, solely on the evidence he relied on a accountant for advice during a decision.
The principle the court upheld, was that a director gains his power under the act solely by competency to run a company, and solely under his or her own attestation and reconnaissance of such competence and in the event that a director explicitly sought even professional external advice, he was under a duty to the company to de minimus inform the board his positive reconnaissance of competency was I doubt; second that by failing to do so, he acted fraudulently in being without capacity to contract his obligations, which is a implied prerequisite of employment, which employment is a fact of appointment, thirdly that by relying on (even professional) advice, he caused the actual decision basis to become unknown to the board, as he could not be questioned at a later extraordinary meeting about the crisis the company faced, and therefore was liable to a criminal standard of deception.
Name me one company director (count of fingers, I mean, if you can name any) whom you know do not rely on accountants to make financial decisions?
As late as mid 2000s, I found no superseding case law to overrule this earlier precedent. But actual actions in Companies Court are rare. If you were in need of stopping a rogue director in their actions, or others in acting upon rogue instructions, you would wan to rush down to Applications Court, with as much evidence as you can grab, the pertinent law for reference, and a draft "without notice" application to obtain a order immediately, not waiting for anyone to reply, not wasting time politely writing cease & desist of other futile letters, and most likely unless you really are mistaken, you probably will get such a order to serve to stop rogue actions, with little or no delay. Such action is easily within the competence of most anyone here, to quickly prepare and present. You will find the Master Of Court, himself usually a senior judge, acting as a "doorman" or "bouncer" to prevent rubbish cases wasting the court's time. The Master is exactly who can be willing to get your application in good order, something I know no remotely affordable solicitor can do, within the time necessary, or at all. The experience in court is infinitely less troubling or intimidating, than the real worries you likely are facing, time of your visit. I found that court almost friendly, if friendly wasn't quite the effect they would ever go for... Judges are not unhelpful to law litigants in person, nor is anyone in the high courts, allowing you aren't silly or time wasting.
I used to rant and rave about how much complete and utter disrespect for company law costs the UK, the lassezx faire of it all, providing none of the benefits the legislation might be hoped to provide a smaller business, in terms of a level base of behaviour etc. But that was before Companies House began citing legislation guidance notes, stating the purpose of the act was to promote business, a nebulous and at worst deceptive "mission statement" that the registrars' offices were not hiding behind so much, as using as a clear warning sign to the attentive, whenever they could. It's really worth getting a chat with anyone there able to still give their time and not attached to a ACD headset, but in real office, I wholeheartedly recommend inquiring beyond casual call center contact, if the moment offers itself to do so.
FWIW, my most rewarding, productive, and of all my experiences the least every worried about money, collaboration in business, was with a family friend and henceforth, my friend, who sadly passed away unexpectedly and far too young, a decade ago. But my experience of "doing business with a friend" is almost unique, and we almost vied with one another competitively to be "by the book" and compliant with our duties to one another and company because of lousy earlier experiences. If anything, I think we raised that to the point of being a unnecessarily high cost, at least from our time. But it was absolutely a superb and indeed rare case of continuous trust building, which didn't supplant other necessary trust creating behaviour, nor detract or affect life negatively in any way. (e.g. bothering too much about being "above board" never caused one of us to think the other was "overdoing it much" for the wrong reasons. I can merely hope I'll have as good a experience again. But one huge positive legacy of all that exercise in transparency and proper discharge of our duties, really made me acutely aware of how I've just not met anyone since who I felt could meet my late partner's standards. I think we used our exchange of concerns as a means to inspect our business very usefully, but in the real world, you simply must have systems in place to fulfil this role, or you'll go crazy.
Sadly, unless you really know what you're doing, you have to pay a lawyer to respond to their lawyers, and that process can be dragged out in any number of ways, either intentionally or just because the system has a lot of process and red tape.
In addition, they can request to do things like:
- Request a court order to stop you from doing any further side work until the case is settled
- Depose all your friends and co-workers
- Seize all your equipment for analysis
- Change the venue to another state if corporate HQ isn't where you live, requiring travel for you (and your lawyers) for meetings
You can, of course, object to all this in front of a judge...but that requires a lawyer too.
This all adds up over time, and every phone call, letter, meeting, or appearance in court costs hundreds of dollars per hour (and usually billed in whole-hour increments) for your lawyer to represent you. Eventually, some people can no longer afford to defend themselves.
Note: IANAL - these are only things I have witnessed personally.
This kind of naïveté about the legal system is dangerous.
I know someone who spent 4 years of his life in court in a case where he was obviously in the right
But every time he won, it was escalated to a higher court and it ended up costing him several magnitudes more than the sum the case was about ($10k, yes, seriously)
Just the opportunity cost lost due to spending 4 years in litigation is insane in itself
This was in Denmark, not the us. But if someone has it out for you, in any court system, they can make your life hell
And the Danish system is in many ways a lot saner than the us one anyway
That gives a larger/richer entity the power to use litigation as threat/bullying only by having deeper pockets.
It means there is a legal advantage of having more money. That's insane.
As I usually say re the US "How is THIS not an issue in the election?"
If I was reasonably sure I had the law on my side I'd dare go to court against an entity of any size, relying on the convention that the loser pays, and the rulings are nearly always in favor of an employee.
If you have 95% chance of winning a lawsuit, and if the company you sue can afford to spend $10M on it, loser-pays-all means you have 5% chance of going bankrupt (unless you have >$10M in your account).
I don't think it's any more fair than the current US system.
First of all most would be better chance than 95% in favor of the employee in almost all cases like this, and second even $1M would not be considered reasonable costs (they can spend what they want but the court won't rule their costs to be paid by the other party if they aren't reasonable in comparison to the case itself).
I'd most likely face a less than 1% risk of paying less than $100k, even if the other party is a global mega corp. Also, the tech workers union I'm in can step in to back legal fees.
Are you not American? It seems like legal costs in the US are sky high and people are constantly afraid of getting sued. I think it's somewhat better in mainland Europe, at least I don't see such anxiety over getting sued or so many threats of suing someone.
I am in Germany now. Can you tell me why this is not the case in mainland Europe? Is it much better in Europe to do side-project in lieu of the fear of getting sued?
I don't have any experience in this. I simply hear less fear about getting sued when you're in the right (I don't know how it is with side projects, I was more reacting to the issue of getting sued when you're right). I think the legal costs of defending yourself aren't so extreme in Europe. Also, I think there's less suing culture in Europe than in the US. All those stories of people suing the microwave manufacturer for failing to warn about drying cats in it or cafés not writing "Warning! Hot!" on the cup etc. In such cases people can get extreme amounts of money in the US that is less usual in here I think.
Depends on what you mean by "required". Is it required by law? No, probably not. If you actually want to win your case, however, you're going to need a lot of knowledge about the laws in question as well as court and legal proceedings to stand a chance, or your opposition's lawyers are likely to win the case on some sort of technicality because you didn't provide some document at the appropriate time or something like that.
This is terribly dangerous logic exactly because it's so alluringly close to right.
As I said elsewhere on the thread: the worst, most heartbreaking problems a startup can have are the kind that only become apparent after the company is successful. You screw up vesting or grants somehow. You mess up liability in a contract, or don't get any legal review at all. In almost every case, you're fine either way...
... except in that one, 1% case, where your omission almost entirely counterfeits your success, negating the work you put in only after you've navigated the rest of the whitewater rapids of getting traction for a new company.
If you're just doing side projects for the hell of it, with no intention of ever starting something commercial with it, I'm almost right there with you, and I think the side project concern is overblown.
But if there's even a chance that you're going to commercialize something, you need to be aware that the gravity of your legal fuckups will almost never be apparent until after you're worth caring about, and in most cases --- especially for your first company --- the work and stress you have to put in to reach the point of being "worth caring about" is grueling.
If it helps my case at all (it wouldn't for me, since I'm an inveterate bootstrapper): not taking this side-project stuff seriously is going to seriously complicate both fundraising and later M&A stuff, where the warrants and reps process is going to go through this IP stuff in agonizing detail.
Just fill out the stupid invention disclosure form thingy your company almost certainly has, and quit if they give you any shit about it. It's too good a job market to take this risk in.
Yeah, but if you do the invention off the clock, after you started? And you decide to disclose?
No one will ever give you a yes or no answer. Never. It's like raising VC, or invading Russia. They will just put everything off until tomorrow. Forever.
I worked at That Place In The Valley that is not in Cupertino or Menlo Park. I tried to get "I own the IP" authorization for some side project that didn't matter to the business. I had a meeting every two weeks or so for a year and a half and nothing ever happened.
But now they know about it, and could make a claim if it blew up. So that's over.
> No one will ever give you a yes or no answer. Never. It's like raising VC, or invading Russia. They will just put everything off until tomorrow. Forever.
That hasn't been my experience (albeit with much smaller companies). For one thing, if you have correspondence showing that you've made a good faith effort to get an answer, it is going to tilt the playing field in your favor in a dispute.
But as going to court isn't what you want, this does lead in to something of a ProTip (though IANAP, TINPA): In general, when hashing out a contract, it can pay off to ask for various requirements imposed on you (in this case, it would be disclosure "within 30 days") to be mirrored by similar requirements on the employer.
If they don't sign off, either don't work on the side project or change jobs. Plowing ahead without clearing up the IP feels empowering, but what you've really done is concede virtually all the power to your employer, and in a way that allows them to retain it even after you leave the job.
As opposed to when I leave having started the project there? I have never gotten anything remotely close to a real answer of what I'm supposed to do once I commit the original sin of thinking while I have a salary. It's not like the moment after I quit every line of code I write is mine free and clear. They own the foundation unless otherwise resolved. They already have all the power.
I didn't plow ahead, I stopped once I thought it might have potential. I really only tried for the few months, after that they kept asking me permission to close the request and I kept telling them no. (I was pretty pissed).
> Just fill out the stupid invention disclosure form thingy your company almost certainly has, and quit if they give you any shit about it. It's too good a job market to take this risk in.
I'm not quite sure this is good general advice. It may work for the top 0.01% of talent in Silicon Valley who can quit their job and find another one right away, but that's not the case for the vast majority of tech folks. My company has an extremely hostile stance towards side projects, which is pretty crappy and demoralizing, but there's no way in hell I'm going to quit over it, particularly if I have nothing else lined up. Best to just put side projects on "pause" if you're working in a place you think would try to grab it.
So I understand exactly what you're saying, but I'm not sure you've thought this through: a company that is openly hostile to side projects is likely to be the worst case scenario when it comes to the commercialization of side projects that weren't disclosed to it.
On the first point, big companies clearly feel that they can claim any project that is related to the company's lines of work, not yours.
Companies like Google, Amazon, and Microsoft have arms for hardware design, video game development, web development, close-to-the-metal graphical programming, embedded systems, retail...that's not just big enough to drive a truck through, it's big enough for that platform they truck space shuttles around on!
You can say that those companies are unlikely to realistically claim ownership of anything that YOU didn't work closely with, but I can say from experience that these companies have explicit company-wide policies regarding some of those areas, with stricter mandatory reporting guidelines, and even requirements to use that company's technology, separate from their ordinary side project/open source contribution/etc. policies.
So I wholeheartedly agree with your second point - what you do off the clock is none of your employer's business, full stop. Just don't use company equipment for it.
When I was there I submitted three, every time they came back and said that they wouldn't sign off because it was related. The last one was an iOS only kitchen timer application.
It was at that point I was was convinced that emailing legal to ask permission was a hack to get you to disclose early what you were working on so that when they sued you they already had some of the initial leg work done :-(.
I consulted with an attorney on this and they advised me that because I was working in California the burden of proof that it was related to Google's business was on Google. But that in his experience they were not above pushing the edge of the definition. The bigger point though was that people don't work at companies that are suing them and generally don't work at any company if they have a reputation (real or imagined) of doing work on their own time that is "against" their employers interest.
The summary of his advice was never, under any circumstances, work on any project you don't want to give Google ownership of while you are employed there. And when you have an idea that you want to develop, quit so that those parts of your employment agreement are nullified.
They can still come after you if they think you are using "proprietary or confidential" information in your new effort but that is less common and it makes them look like the bad guys not you.
Google has a painless and usually very fast process for this. It's done on a project by project basis and gives the developer a certain amount of peace of mind. There is a separate process for non OSS work as well. Or at least there was when I was there a couple of years ago.
I never had any problem getting the ok but everyone's experience will be different depending on a number of factors. It's useful to know up front either way though.
This seems insane. I make tiny pull requests all of the time - sometimes it's just a documentation typo fix! If you're a Google, you need to send those through a lawyer, or you'll (I assume) get fired? Ignoring the intrusion, that's a good use of Google's expensive lawyer time?
I will be starting at the job the next summer (graduating next summer) and I too thought the same. If I didn't use the company's infrastructure or their internal technology or do the work while on company time (9 to 5) - then they should not be able to claim my work.
TL;DR If you could not have built the product without being an employee of the company, it probably belongs to them.
eg. Maybe you use Microsoft's latest internal only HoloLens prototype to build a product. You couldn't have done that if you weren't a MS employee - so they can claim it.
But if you used the dev kit and publicly available tech and features then they shouldn't be able to claim it.
> The courts rarely side with the company, and only in cases where it's quite obvious the work was directly related.
The courts in California rarely side with the company, (so if you work on billing for Google and decide to do some machine learning on the side, even though Google does a lot of ML work no court would find in their favor -- though I doubt google would go after you anyway). But at the opposite end of the spectrum, a court in Texas have ruled that simply the thoughts in the head of an employee are a company's (DSC) proprietary information -- the ultimate non-compete (non-competes are illegal in CA).
That doesn't fit my understanding of the law. Do you have references? The law has this concept of "duty of loyalty" which basically says by being an employee you are promising to do what's best for the company. As one example that means not competing against the company. In otherwords even if it's not related to your specific job you can not work on a product that competes with the company.
This is a complex topic and IANAL but I've been through some legal cases regarding this topic. The most recent ruling about employee duties came in Ransom v Customer Systems Plc in 2012 which cleared up some conflicting precedent and established ground rules.
Long story short: employees have no implicit "duty of loyalty" except for directors and fiduciaries who are responsible for reporting accurate facts (without which limited liability entities could not function). Companies can make a variety of responsibilities explicit in the employment contract but the core principal is that the employee must agree to those responsibilities when they sign up. This is why we have noncompetes/circumvents and moonlighting clauses: if it aint on paper, it aint going to hold up in court.
The big exception is the criminal code. There are a variety of things an employee can do that arent against their employment contract but could be prosecuted as fraud, creating a virtual duty of loyalty.
> That doesn't fit my understanding of the law. Do you have references?
Do you live in California? If not, I have no idea what law applies to you and your work.
But if you live in California you are in luck: Section 2872 of the labor code is explicit in this matter. In fact every employee assignment agreement I have handed out to someone I've hired (going back to 1989) has included the text of that section, for example:
in accordance with Section 2872 of the California Labor
Code that the foregoing Agreement between you and Company does
not require you to assign or offer to assign to Company any Invention
that you develop entirely on your own time without using Company’s
equipment, supplies, facilities or trade secret information, except
for those Inventions that either:
a. Relate at the time of conception or reduction to
practice to Company’s business, or actual or demonstrably
anticipated research or development; or
b.Result from any work performed by you for Company. To the
extent a provision in the foregoing Agreement purports
to require you to assign an Invention otherwise excluded
from the preceding paragraph, the provision is against
the public policy of this state and is unenforceable.
This limited exclusion does not apply to any patent or Invention
covered by a contract between Company and the United States
or any of its agencies requiring full title to such patent
or Invention to be in the United States.
Don't use the company's computer, phone, network, IP etc.
Don't try to make your day job a side project.
Don't let your side project get in the way of your day job (or you'll get fired just 'coz you didn't do your day job).
Otherwise: no problem.
This law is widely cited as one of Silicon Valley's advantages over other places.
California went through a period of rational law making, e.g. laws like this, a presumption that drivers know what they are doing regardless of the posted speed limit, etc. Then they went insane (three strikes etc) and the rest is, sadly, history. Still not as crazy as the rest of the USA though.
No, that's in the text I quoted and I referred to it in my original comment: the CA courts have historically sided with the employees over the companies except when it was pretty unambiguous that the employee was going into the same business as their (former) employer, e.g. Avant! -- which typically includes actual taking of source code.
On the other hand stories like google's self driving car team departing to start their own self driving car company, or the tons of people who have left Cisco to start routing companies are legion.
I hope nobody is dissuaded from working on side projects by this post.
First of all, restricting contracts to only work related to the company's business is not unheard of (even outside of California). Every company I've worked at has agreed to that.
Secondly, it ignores the abundant evidence that people successfully turn side projects into businesses all the time without being sued by their ex-employers. In fact, I'd even posit that the median startup is begun while the founder is still working for someone else.
Don't sign draconian contracts and don't be afraid to work on side projects. Be mindful of Joel's bias (he's a CEO, not a developer).
> Be mindful of Joel's bias (he's a CEO, not a developer).
Sorry, but this is ridiculous. Spolsky has built his career around promoting a good work environment for developers. After reading his blog for many years, listening to his talks and podcasts... he's either an extremely talented thespian, or one of the most conscientious people in tech.
And, while everyone has bias, I seriously doubt Joel and StackOverflow worry, or have any need to worry, about employee side-projects. They seem much more interested in employee retention.
I think Spolsky has done a fantastic job of building a an employer brand that attracts developers. It allows him to attract quality developers at under-market rates.
I don't necessarily think this is even a conscious act on his part. It's just that if you spend decades on one side of the table, you inevitable adapt that side's biases. Every employer wants their employees focused solely on their projects.
I get what you're saying, and with most other CEOs I would agree, but it doesn't really compute in his case. Considering the amount of time he has spent for the past decade+ evangelizing the developer side of things, and how obviously he empathizes with life as a developer... I'm happy to accept whatever he says at face value. He's a good egg.
Also, thank you for giving me the opportunity to post something positive about someone in tech! I'm generally the one being cynical and negative, so it's a nice change :)
I guess I'm not in the habit of accepting anything anyone says at face value. It doesn't mean he's running some long-running conspiracy, it's simply a reminder that his perspective comes from a particular position.
> I'm not in the habit of accepting anything anyone says at face value.
Well, that is generally a wise approach. The only reason I'm defending him is that I mentally pegged him a long time ago as an unusually decent guy. To be fair, I only know him from his writings and public speaking, but that has been consistently developer-minded.
That is probably true, but then you also have to look at the merit of those experiences. His fight has essentially been trying to make programming a "respected profession", where you contributions and time is respected. If that's the environment you're trying to create, then side projects are less important. Since your best work, excitement and learning is supposed to happen at work. Side projects might even undermine your efforts since programmers at worse workplaces compensate by having more exciting side projects. So I think the perspective is less that side projects are bad and more that work should be good enough that side projects (that leads to commercial products rather than hobbies) become unnecessary.
I don't think your post contradicts morgante's point at all. As soon as you start taking your side project seriously, you stop being a developer (i.e. a person selling his or her time sitting in a cushy office) and become an entrepreneur. That means his developer advocacy stops applying to you and you become his potential competitor.
Of course there are different kinds of side projects. Everyone is worried about projects that could potentially grow into big businesses or popular open-source libraries. I don't think anyone will sue you over some inconsequential code written while being happily employed by Acme.
> If your side project isn't directly related to the work you are doing, then you don't need to worry.
I'm going to need more than your word to believe that. It's in pretty direct contradiction to the wording of the law, which states that it's your employer's work, not your work, that matters. Do you have any references to support your view? You say the courts rarely side with the company, I'd love to hear about some example cases where these issues were relevant.
I had a colleague who worked on a side project that was no where close to the main business of the company but was related to a "hackathon" type project at the company that he was uninvolved in. His side project took off and he quit to work on it. The company successfully sued him for millions of dollars. This was in the US but not in California.
A contract I was offered had this crap in it. I asked them to clarify in writing what "related to the work" means. They refused so I declined the offer.
You may be better off striking out the paragraphs, sign it, and wait and see. It's a no-fuss attempt to fix something that you/we don't think is right, and if they don't raise the point, it means they're ok with the negotiation. A few colleagues have done that, because they've had and will always have (commercial) background projects, and it worked, even though our 1000+ startup has a venerable amount of lawyers per head.
I wonder what legal recourse you have, if you don't get that contract until after your starting date (and have already left a previous job)? Even if you ask for all contract information ahead of time before accepting the job offer, and they conveniently leave that one out until after starting?
Right, but what I'm talking about is a case where they fail to give that form to you until after your start date (and of course, after you've left your previous job). So they have the advantage -- either you sign the form, or you get fired on your first day of work. Too bad that most states won't consider this "signing under duress".
>either you sign the form, or you get fired on your first day of work.
Why would any company go through the legal and HR hassle to do this? And if they did, why would you want to work for them? Refuse to sign and let their true colours be revealed.
Since you can be terminated for any reason or no reason at all in pretty much every state in the US, I'd be surprised if any state considered this "duress". The expectation is that you can simply quit if presented with a contract you don't like (or, for that matter, if your salary is cut in half).
"Don't even tell your employer about side projects. Leave them out of the loop entirely."
Early in my career I did this. Now I go the exact opposite tack. Tell your employer. Get it cleared in writing. If you work at a company where that is a problem, then consider your side projects non-commercial for perpetuity, or get a new job.
Any tips for the things that should be covered? Do you actually go into a lot of detail, or do you just suggest that the high-level area, and whether it's a commercial endeavor?
I just go really high level. Larger companies usually have a process, sometimes it is categorized under "conflicts of interest". My current side projects are non-commercial, so I just put together a 3 sentence description of the project & a link to the GitHub page. Generally if the lawyers have any questions then I answer those, but I don't go overboard providing info. In the end it's better for everyone to have clarity.
Don't even tell your employer about side projects. Leave them out of the loop entirely.
This depends heavily on the employer.
Google, for instance, is extremely friendly towards both side projects (done entirely on your own time and with your own equipment) and open source contributions done either on or off company time.
I wish more employers had the same level of transparency.
This was not the case in my experience at Google. It heavily depends on your specific group, project, and direct management hierarchy.
Eg they might let you work on some open source project, but if you wanted to commercialize some side project, it's an entirely different can of worms. (And different clauses I'm your employment contract.)
I still don't know how it can hurt to keep it a secret. Any assistance you could get taints the project's ownership, so it seems like you have nothing to gain by sharing and a lot to lose.
I still don't know how it can hurt to keep it a secret.
The article alludes to that, albeit from the company's point of view. The same principle applies to you.
If you ever want to sell your side project in the future, the buyer will put you through the wringer called "due diligence." If you were employed at XYZ Co. at the time you developed the IP being sold, part of the due-diligence process may require you to prove that XYZ Co. doesn't own the rights to it. If you kept it secret from XYZ, you won't have a signed waiver from them, so you won't be able to do that. Instead, you'll have to go back to XYZ Co., hat in hand, and ask them for a waiver now.
Sharing your side project and intentions with your employer satisfies "right of first refusal", which will become much more valuable to have brought up formally on the offchance emplyers attempt to sue for ownership.
Also, this formalizes standing on both sides; both parties will know more clearly where each stands.
Of course you may proceed without sharing, but might also end up losing more later. Calculated risk.
It could just be the people that google attracts ? People who are constantly tinkering ... side or hobby projects could well be ingrained in the company culture ....
According to the comments in this thread google expects you to notify them when you hack on things off the job, and feels entitled to deny you those activities. Sounds quite hostile towards creative people. Nightmarish, even.
If you ever have aspirations of having one of your side projects turn into something that gets outside investment, or gets acquired by another company, you need to be more careful. Having legal ambiguity (or even the chance of legal trouble that you'd almost surely win) is enough to scare off investors and acquirers.
> Don't even tell your employer about side projects. Leave them out of the loop entirely.
On this, my last company had a similar clause, but you could just run a project by the HR team and they would clear any ownership of it. I worked at a media company and I was working on a media-related side project (so definitely "related to your employer’s line of work") and they 'released' any rights to it.
Yeah, if you work somewhere you can easily get clearance, it's definitely worthwhile to do so. Then you don't have to worry. If you don't, it's probably best not to mention it, because it invites trouble and in the general sense (YMMV), it's not very likely that the company will sue you unless you actually are doing something nefarious.
This seems crazy, though. I'm supposed to run some utility script I'm throwing up on Github through an HR team? That'll take more time than actually writing the script!
I find this mindset totally disgusting, but I'm glad it's been summed up in such a concise way.
> Being an employee of a high tech company whose product is intellectual means that you have decided that you want to sell your intellectual output, and maybe that’s OK, and maybe it’s not, but it’s a free choice.
Let's clarify that phrase, "sell your intellectual output". Keep in mind that earlier in the article we discovered that "during work hours" or "related to your work" are not limits on its scope. What are the limits? The evident conclusion is that there are none. You are selling all of your intellectual output.
A situation where every idea you come up with, everything you think, every last shred of creativity is owned by someone else is one of the most profoundly dystopian things I can imagine. But this isn't a sci-fi story, this is standard business practice.
Selling all your intellectual output is selling yourself, and I think it's unconscionable. If you don't even own your own thoughts, what do you have left?
That is what being a salaried employee means - the normal hours are stipulated in the contract but also some clause like "and anything else that may be required".
I was trying to explain to creative people that "intellectual property" is basically enclosure of 20th century, but they had a hard time to grasp the analogy. In both cases, it's means to create an artificial scarcity where one didn't exist before. So they are bound to repeat the same mistakes that workers did before marxism.
What is the alternative though? Through the article Joel gave reasons as to why those two limits can't be placed (even if the company was nice and wanted to)
- Have the employee agree to grant a royalty-free license to all relevant inventions made in the appropriate time period
- Have the employee forfeit all inventions in the event they initiate litigation
- Or better, sign a mutual patent disarmament clause (probably my favorite option)
Going back to the core of the issue though, I would not trust investors who insist on appropriating the rights to any and all inventions they can. The article tries to frame this as a legal protection strategy, but they don't need ownership to do this. The only reason they insist on it is to try and pressure the founders into squeezing maximum value from employees while giving back as little as they can in return. Unfortunately this behavior is quite widespread.
> A situation where every idea you come up with, everything you think, every last shred of creativity is owned by someone else is one of the most profoundly dystopian things I can imagine.
That's rather overdramatic. Several centuries ago, every idea you come up with, everything you think, you could probably keep as your own because no one was interested and there was no way you could sell them and make living, even if you really wanted to, which you probably did not, because such a lifestyle was out of most people's reach.
"What are you saying you've been up to all this morning, thinking? Cut out the laziness and go feed the cows, or there will be no lunch for you!"
Joel also wrote that as a contractor you own all the copyright by default, and it is your free will to sell it. That is your choice to sign up for contract and let the company take over. If you do not want that, simply do your buisness on your own and don't look for work for someone else.
For downwvoters, I am from Poland I live in Netherlands. I am all in for personal freedom. I cry when freedom is taken away from people. It is about beeing more educated, knowing your options. Not just signing up with big corp because you will get more money.
It is about you can loose some of your money because you choose freedom.
Please upvote it. Don't be like a child who wants to have cookie and eat cookie, it is You loose some money in return you get freedom. Those who want money can get all they want, but you loose something more valuable. You can't have all the money and all the freedom...
That is a good point, people are inventing dystopian futures, where we had really dystopian past. Where people actually belonged to someone, were only fed for their work.
Where now in first world you can quit your job and try to sell your inventions or every last shred of creativity to one that offers more. It is also that if you do not like someone you do not have to sell your ideas to him, you can sell those ideas to someone you like cheaper.
Joel also wrote (I hope parent poster read the article) that as a contractor you own all the copyright by default, and it is your free will to sell it.
This is a good article, but the "let them eat cake"-iness of the last paragraph is pretty chilling.
> the only way to gain independence is to be independent. Being an employee of a high tech company whose product is intellectual means that you have decided that you want to sell your intellectual output, and maybe that’s OK, and maybe it’s not, but it’s a free choice.
I was hoping for a closing argument about how thoughtful employers could accommodate their legal requirements while also respecting independent employee creations.
Instead he seems to just be saying that employees that want to keep their side projects should just quit.
Reading that might give me pause about taking a position at Fog Creek.
This is true, but ultimately if your company wants to be a dick about it, you could still end up having to fight them in court. They just have to say "when we signed that form you said it was a <domain A> app, but now it's turned into a <domain B> app which competes with our business. Hand it over."
As Joel says, a judge/jury will probably be inclined to find for you, but you still have go through the pain and cost of litigation. Also, while it's not usually in a company's best interest to pick legal fights with their employees, the catch-22 is this: the only time it's worth it for them to be dicks is when/if your business takes off. I'm sure your employer doesn't care about your little news aggregator until you're shopping around for $100 million in VC funding.
Ultimately he's right. If you seriously want to start a side business, quit your day job.
But you have to quit your day job before starting the side business, or working on it at all. Otherwise your ex-employer still has a claim on your business.
The beauty of side projects is not having to make them pay the bills. As soon as you have to make them pay the rent, they stop being side projects.
But having an ex-employer sue you for lots of money because your side project is booming is a great problem to have ;)
that becomes a question for lawyers at the appropriate time.
Put it like this:
not having a side project because you're afraid your employer will sue will get you exactly and definitely $0.
Having a successful side project will teach you a ton of useful stuff and probably earn you more than $0 even after the lawyers have finished arguing (depending on your definition of successful).
All startup advices, left and right, in unison say: it's way better to develop your product on somebody else's dime :) . Don't hurry to leave your work until your own business starts to fly.
Go figure... What are the practical ways to benefit from side projects? It's hard enough to work on two works at the same time, would be sad if the results would be lost.
That may be a temporary bodge solution to this, but the final solution is to eradicate the kind of legal implications that being an employee entails, aside from the only fact that it is no different than you selling a service to the employer during the contracted working hours. An employee is nothing more than a consultant that, most of the time, works on location, and should legally be treated like that.
Obviously that wouldn't stop you from signing your work away in a contract, but at least removes the whole "it's a different kind of transaction" legal mentality from it.
Be a little careful, because I think you're reading a Stack Overflow question recast as a blog post (Spolsky just moved his blog from CityDesk --- can you believe he was still using CityDesk? --- to WordPress, and so I guess we'll be seeing some more stuff like this on it). People are less careful capturing all angles of an issue on forums than they are in blog posts.
I assume Stack Overflow is just like most big software shops, in that if you have a side project you want to work on and be severable from your employer, you just fill out a little form and get it signed by your manager.
You'd be pushing things to take it further than that, but I'll add anyways: if they're like most firms (and I have every reason to think they would be, since they're famously dev-friendly), even if you didn't follow this process, they're not going to fuck with you. It would be terrible for their own business.
But if you're going to take a side project and turn it into a business, it behooves you to do things by the book, because the worst possible problems for a startup to have are the kind that don't become apparent until after your project is successful.
(Also: Spolsky is the CEO of Stack Overflow; Anil Dash is the CEO of Fog Creek.)
I think the article was supposed to be informational, and from the perspective of the average software developer (who will almost certainly never have any contact with Fog Creek), rather than promotional and from the perspective of a tech CEO.
"Buyer's market" seems like it doesn't apply to this. Both sides in the market have ample selection and competition. I'd have a hard time saying which side you even mean is favored if you said it was imbalanced. Software companies seem to search vigorously for good hires and vice versa-- the sign of a healthy and competitive market.
Not quit - above he outlines different attitudes the employing company might have about side projects.
I think his message distilled would be that by default you may not own your side project - so talk with your employer, and maybe get an agreement in writing, if you want to change that.
> Instead he seems to just be saying that employees that want to keep their side projects should just quit.
I thought he was suggesting that employees take it as an opportunity to negotiate for higher salary, since the company will be buying all of their inventive output. Then they should just work 9-5 and enjoy their free time by relaxing instead of working on side projects. That seems like pretty reasonable advice, unless you're in California, in which case an employee doesn't have that bargaining leverage.
> Your game designer works for a year and invents 7 games. At the end of the year, she sues you, claiming that she owns 4 of them, because those particular games were invented between 5pm and 9am, when she wasn’t on duty.
> ...
> So before you hire this developer, you agree, “hey listen, I know that inventing happens all the time, and it’s impossible to prove whether you invented something while you were sitting in the chair I supplied in the cubicle I supplied or not. I don’t just want to buy your 9:00-5:00 inventions. I want them all, and I’m going to pay you a nice salary to get them all,” and she agrees to that, so now you want to sign something that says that all her inventions belong to the company for as long as she is employed by the company.
Wait, what? Wouldn't the fix for this just to say, "You transfer the rights to any games you give us" (or whatever the legal wording for that is)?
It seems incredibly odd to go from "you gave us a game but kept the IP" to "we own all IP of games you make".
I furrowed my brow at that example, too. He may have been simplifying or misrepresenting reality. I would think it's disingenuous that you're presenting all 7 of those games as projects done on the company time (unless there is something to insinuate you were forced to work off the clock for free--which wouldn't be different than any other kind of work).
Lets say, without notifying my boss, I went on vacation and refactored some company code I maintain, then checked it in when I got back. I can't imagine claiming that as my own unless there were other shady things going on.
I think the standard contract should say something like "I assign copyright of and grant a licence to any patents I own pertinent to every single line of code that I create and give the company".
> Your game designer works for a year and invents 7 games. At the end of the year, she sues you, claiming that she owns 4 of them, because those particular games were invented between 5pm and 9am, when she wasn’t on duty.
That's not what I'm afraid of. I'm afraid that after developing 7 games that belong to my employer, my personal website project that computes tax returns in ethiopia would somehow belong to my employer because
I'm perfectly fine with my employer owning everything related to what I'm employed there to do unless explicitly agreed otherwose
I'm not fine with my employer owning every single piece of "IP" (god I hate that term) that I have created during my employment but outside of work, if it's unrelated to their business. I don't even agree to that even if I have a "standard contract" in which I have stated that they own everything I do. I'm not going to argue over that contract, no one does, and I'm still not ready to give up the ownership of my personal projects.
The hope that one of my side projects will some day succeed, and I can leave my 9-5 is the only thing that drives me. If I said, "welp, legal" i'd die inside. Some people have church, I have side projects.
I went through a tough time when I wasn't sure if I wanted to be software engineer anymore. Working on my side projects not only made me go through that time, it made me truly happy. Reminded me why I am in this in the first place.
Same here. While I've worked for larger companies who are onerous about side project, that's been a large reason I've left and tended to avoid them. It's just too much effort to play along with them even if there's no overlap.
Joel doesn't often miss things, but with respect I think he missed something here.
If you, the employee, are working for an employer you respect, and vice versa, YOU CAN HAVE A CONVERSATION!
If your day job is, say, maintaining high-capacity forum software in dotnet, and you have this hankering to develop, say, a WordPress plugin to show the time of sunrise, you can talk about it.
If you respect your boss and she respects you, the conversation will be fruitful. She may say, "please don't do that," and you'll understand why not. She may say "go ahead."
If you DON'T respect your boss, there's lots of advice here about how to proceed. But why not start out assuming mutual respect?
He's not suggesting that. He's saying that you can always cover yourself legally starting with a conversation.
Hey boss, I'm going to write this wordpress plugin as a side project. I'll be doing on my own time and with my own equipment. I'd like the company to disclaim any right to the code.
9 times out of 10 they will do so. If they don't then you know it's time to polish the resume. As tptacek says elsewhere here. It's too good a job market to risk the legal hassle of working someplace like that.
My experience is that employers, and people generally, are completely unpredictable. An employer might seem supportive, but later on decide that your side project should be company property.
And, people hear what they want to hear. The employee hears, "good luck with that project, great idea!" and thinks that means the employer doesn't want a stake in it. The employer might simply be intending to encourage the employee, thinking the project is obviously company owned.
"Having the conversation" only muddies the waters.
Can I get that conversation in writing usually turns into maybe, then gets escalated, then gets a no, in my experience. Luckily I am 100% certain my boss (who owns the company) would sign something if I was looking to get investment.
Yeah, this is much more likely to happen if there's actually some meat to take out of your side project, so most devs won't have to worry about it. Developers should understand ahead of time that asking for your boss's word isn't going to mean anything if the side project takes off (for multiple reasons).
However, in that case, a legal fight may be somewhat tenable (though it always sucks for everyone (except lawyers)). If you got them to sign a document releasing the project, you'll be able to win that much more easily.
If you can get the signature without too much hassle, it's worth it. If you can't, it's not worth ever mentioning it, IMO.
You can't really trust companies to 'do the right thing'. Your boss may be a great guy but he reports to someone who may also report to someone, etc. Maybe everyone is even aligned but that may change later with new management.
But your great, respectful boss isn't the company. It's the company, not the boss, that will be turning around and saying "nice product you made there, lucky for us we own it."
It's great to have/give respect from/to your employers. But this is the way you should think about that; since everyone is respectful, then it is the perfect time to iron-out a nice agreement which lays it all out for both parties, and protects both parties.
I've been a contractor and entrepreneur for many years. I do like the higher income that I can command as a contractor, but it's also a matter of principal that any work I do on my own for my own endeavors belong to me.
My current client and I have talked about going "full-time" and I've even discussed it with their legal department. The problem is they have a culture of standard employment contracts and are extremely uncomfortable with the idea of someone having a non-standard employment contract. They said it was "possible", but I'd have to list the projects to be excluded from their interests.
That precludes any opportunity to pursue any new ideas I would come up with.
That's just a flat out non-starter for me. I come up with new ideas all the time and I pursue or network those ideas all the time.
This is definitely a problem with my client and other large corporations. They understand that entrepreneurship is a growing interest of my many technical people and it has become a barrier to attracting those types of people. Something every corporation needs...people who think outside the box.
Of course the primary issue is leverage. If you need the company/paycheck and don't have enough of a background to command a change in the standard employment contract, then you have to sign away all rights. Or you can just decide to be a contractor and explicitly state (where it's necessary), that the work you're assigning rights to is in some amendment and is listed in detail. All other creations/works are yours.
Or you have a strong background with proven results and the corporation is interested in your services enough so that they will work with you on a non-standard employment contract.
I agree with your critique, but I disagree with this line of thinking:
> If you need the company/paycheck and don't have enough of a background to command a change in the standard employment contract, then you have to sign away all rights.
You're not signing away your rights, your signing away everyone's rights. What about the person who doesn't like to sign his rights away, but is now expected to, because some other poor person lead the way? Accepting this kind of bondage from employers means either setting a very bad precedent, or following a very bad precedent. Either way it hurts the workforce.
This person doesn't have the opportunity or financial freedom to fight for everyone. He or she has bills to pay. The leverage dynamic is very real.
It seems the law should be improved here. It would directly promote innovation and new businesses. I don't see much downside either. Businesses would be less entrenched, which on first glance sounds good.
Frankly, that's BS. Employment agreements get amended all the time. You can bet that if it was a change the company decided needed to be made that getting it done wouldn't require them firing everyone and then re-hiring them.
I get the impression you're being blocked by someone who just doesn't want to be bothered, and making a weak excuse is just their easy way out.
You can try an end-run (with the attendant risks). If the agreement itself doesn't contain reusable language providing for amendments, then just keep it simple: draw up a replacement appendix, and stick language at the top that says the list below is added to section X of Document Y attached as appendix B to the employment agreement between $COMPANY and $EMPLOYEE signed on $DATE, copy the format of the signature block at the end of your agreement and send it to the same person who signed your employment contract in the first place for them to sign and return.
IANAL, TINLA, etc., so feel free to get a local labor and employment lawyer to review your agreement and the amendment you've drawn up. Figure on 1-2 billable hours if you have it mostly right.
I was at a larger company and tried to play ball with their policies for personal work. My contract gave them "right of first refusal" and had a space for exclusions of things you were working on outside of work. Some friends weren't allowed to continue contributing to a few Open Source projects...which seemed excessive, but makes sense if they're overly cautious.
I mentioned I was helping a friend on a short film. I was just showing up on set and possibly doing technical stuff on editing and mixing. I asked, "It's not my project, I'm just helping out. What would you like to see from the project?" "Everything" "Really? We haven't started shooting. Does that mean the script? Raw footage? The final edit?" "Everything" I don't think they actually knew anything at all about what I was talking about (even though it was multi-gigabytes of information) and they handed it all over to a co-worker.
I think the lesson is to think about where they're coming from. The lawyer is paid to cover the company's ass and they may not even have the expertise to make the right call, so they'll error on the side of being safe.
This situation sounds terrible. Were you writing software for your employer? Why would you have told them you were volunteering non-coding assistance to a film production? Did they honestly think they had the right to require you show them copyrightable works created by other people who were not their employees? Did you truly take those creations and show them to your employer?
This whole situation sounds ludicrous and should never have been required to happen by management in a company whose focus is creating software.
It was a large animation studio and I was a guy who monitored their render farm. So they were making content and I would write tools (Python, Perl, and Shell scripts) and did have access to their whole codebase.
I told them because there was a box in my contract (I was new to the industry) and the last thing I wanted was to have my friend's short film litigated against.
It's weird because I'm not sure what I'd do different. In that case I probably wouldn't tell them, but I often have side projects that might be profitable. Often I'd see artists working on short-films or publishing their own art books and they would sometimes be internal events promoting those things. I'm not sure if there was just some "understanding" I didn't quite get or if tech and art were treated separately.
CA 2870 is attached to any such agreement you sign in California, and protects independent invention. You should read it. This law forms the legal basis for innovation in Silicon Valley.
It would help if their webmaster would just take down or outright forward the old URL, which goes back to 1995. It's been deprecated since at least early 2016.
On the other hand, in Texas my quite nice house cost less than $300,000, my state government is totally solvent, and very little is on fire or running out of water.
Your standard contracts may be better, but California certainly has its share of drawbacks.
And did you know there's a Fry's and an In-N-Out burger within ten miles of my house?
Something like this might be a deterrent for a company that would otherwise be interested in suing, but it's not going to stop a determined foe from really messing up your life. You'll win ... if you have the cash to fight them (which you don't, unless you're making enough money that a lawsuit is a total non-issue). In practice, you'll settle to stop the legal expenses, and they'll get at least a chunk of your project.
When you're successful you have to expect that some people you knew before you found success will get salty and think that you owe it all to them. A few of these people may be inclined to file a lawsuit, including your former employers. They see a pie and want to claim a piece of it.
Joel is both asserting that a particular state of affairs presently exists that quite likely doesn't--specifically that employers have a strong rather than tenuous legal claim to all side projects produced by their developers due to the vagueness of the relatedness clause of the California law and the contracts incorporating it--and also attempting to convince his readers, most of whom are developers, that this is entirely appropriate and that they should just accept it as a normal consequence of salaried employment.
This really does change my opinion of both Joel and FogCreek, and certainly for the worse. I wonder, did FogCreek actually prevent Ted Unangst from contributing to OpenBSD as a side project while he was with them? If so, that's horrible. And how much have FogCreek, StackOverflow, and other companies that seek to greedily arrogate the entire creative output of their employees benefited from open source software began and continued as the very side projects this blog post cautions against? Utterly hypocritical.
I second the call of another poster: we need a professional association (union) of the kind that lawyers, doctors, and dentists have. IEEE and ACM could easily function as such, and in fact, they already provide many of the same practice standardization and continuing education functions that other professional associations do. All that's missing is the rent-seeking behavior to ensure we earn what we're worth and keep employers like Joel honest.
When I ran my design studio at it's height of 80 people I would encourage everyone to have side projects. When you reach that size people coming and going starts to become the norm. Just as each employer is not going to be valued as when you are a much smaller company, neither should the employee be forced to some sort of fake commitment to a company who is no longer able to care for others as a small tight band of brothers might do. So it's better to have people be able to do whatever they like to do in life. It's up to you to capture as much value out of them as possible and it's often quite telling about the position they have whether they end up wanting to spend more time on sideprojects than their main one.
You have to expect people leaving you, because the reasons they join a bigger company is much different than a smaller one and it's quite shortsighted as a CEO of a company of the size of fog creek to think like that.
Luckily there are other companies doing great encouraging side projects too.
However, he is still CEO of Stack Overflow and has over 300 employees, if I were one of them I might be pretty concerned about his take on side projects as my employer. I think in all likelihood, Joel means the article as a warning to developers who think they have more freedom than they might actually, and he's probably quite permissive about side projects at SO, but I agree the article doesn't come across that way.
As a Canadian I don't even know what the requirements are, or protections if any. But I did notice one thing in particular: you need your own equipment (no company equipment) to qualify under the Californian protections.
How does this factor into bring your own device (BYOD)? At what point is it your employers equipment, and at what point is it yours? I think BYOD is a terrible idea for several reasons (usually leveraged as a cost-saving measure, can't 100% verify that all company data is wiped at end of employment, etc), but this seems like it muddles the whole thing further. If you only own the devices that you use to work, does everything belong to your employer and how can you draw a line?
The problem looks reasonably clear. If something is provided to you by the employer, don't use it for a side project.
This can be hardware, software, know-how, office space, work hours, etc. If something was not provided by the employer as a part of your work environment, it's probably fine to use it. But a clear separation should additionally help.
I agree it's probably wise to separate the two, but it's very hard to prove you worked on company equipment.
My personal projects are all in my dropbox, which is synced to all my computers (both home and work). That means all the code for my side projects is always sitting on my work computer as well. I doubt that makes a difference.
I used my own equipment, including my own personal licenses for all tools, but my employer still claimed my work on it (at home) was theirs - because they claimed IT professionals all prefer to use their own equipment for their work.
> If you only own the devices that you use to work, does everything belong to your employer and how can you draw a line?
I would say: don't do that. If you do, you should probably have a contract leasing your equipment to the company. Generally, if you need to use your own equipment for work, then you should probably have an agreement that falls under the "contracting" (or B2B or consulting) umbrella.
Employer contracts are concerned that you are attempting to take company proprietary information and repackage it on your own time for sale. This sort of behavior clearly falls into 'inventions'.
However, most of the contracts I've seen have a clause which states that the invention must be related to the business of the company. If you work in the games industry and make games on your own time for sale, your employer might take issue with that.
If you work at a games company and run a real estate business on the side, who cares? Similarly, if you work at a games company and write real estate software, they're still not likely to care.
The issue arises:
- where the customer you are getting money from is the same customer (potential customer) of your current employer.
- where the IP in your side project has potential business value to your current employer.
If in doubt, you simply tell your employer up front and get it in writing (email) that it's o.k. I've done this in the past, and the HR department usually will defer the decision to your Manager, who has to make a determination if the work you're doing has potential cross-cutting business concerns. The bigger issue (from an employer standpoint) is that you are not devoting 100% effort to your current employer.
So as long as:
- you make it clear that there are no customer overlaps
- there is no IP that the company would ever be interested in
- that this is done own your own time (and off-premises)
I encountered such clause in my contracts twice, in France. I'm glad to finally know the reason why, it just looked suspicious to me (and when I asked about it, each time I was answered: "this is standard contracts").
The two times, I asked to change it. First time I asked to mention that I keep ownership of my opensource projects, since it was what I was doing mainly with my free time.
The second time was less obvious, because I was cofounder/CTO, and I didn't really have a distinction between my "work for company" time and "work outside" time. I also was working on a side project meant to become a business. I took it that they wanted me to transfer IP to the company, but didn't want to let the ownership of my other project go as well.
So what I asked was to change text to say that company had ownership for all my non opensource code that was effectively used by the company. This gave them ownership of everything I was writing for them while at home, while still securing my ownership on my totally unrelated project (without any ambiguity possible).
The conclusion of this article hinges on the vagueness of "related to your employer’s line of work". From that he concludes that all employee developers have effectively sold their total intellectual output. But that is bullshit. The vagueness doesn't make the law meaningless. He admits that a judge and jury would probably side with the employee but still picks the company's side for his conclusion (the sarcastic "big bad Google" gives away his mindset). It is true that a company will generally have more resources than you and can grind you down legally, but in general they don't because, besides the money, it's a time suck for everybody, potentially bad press, and really bad for morale
I am surprised nobody here has yet mentioned the real case of what happened to Evan Brown, the former president of the Dallas Ft Worth Unix Users Group who worked at a telephone switch company as a system administrator and had an idea for a generic code translator.
That and the e2 article both don't mention what actually happened in the end, does anyone know? Presumably Mr. Brown liquidated everything, ran out of money and died a beggar on the streets.
Where I work, there's a fairly streamlined process for getting waivers for side projects, including open source contributions. Fill out a page-long form broadly describing the intended side project and send it to Legal. If approved (and I've never had one rejected), a couple of weeks later they send back two copies of a document signed by them saying that the employee promises not to use company time or resources for that project and in return they agree to disavow any interest in it. Sign and date both copies, send one back, keep the other. Done. Everyone knows where they stand.
While it's great that you've never had one rejected, what would happen if that event occurred? Imagine a situation where you submit a proposal for a completely unrelated project, that you really want to happen, and they deny it? Further conversations, talks, they don't budge. What then?
This presents a false dilemma. There are other options than "own everything" or "be negligent and get sued."
Contracts can say almost anything. You can agree to grant the company a liberal license to anything you deliver to the company or incorporate into any product of the company. You can make a similarly protective agreement on the patent front.
There, now you own what you do on your own time and the company isn't at risk of a lawsuit from you.
This is why programmers need unions! Or a guild. Or something! That employers totally dictate everything in a field that is in such high demand is absolutely unacceptable.
You can't go out and open an office as lawyer or doctor without a license. You will get into trouble quickly. You also have to comply with a lot of rules. Anybody can call himself "software engineer" and he can pretty much do whatever he wants. That freedom is the exciting part about software but it has the disadvantage that there is no protection for "software engineers".
Yep, and don't call it a union. Barrier of entry is not a problem, we dont need an organization to limit entry into the field, we just need political representation. Now "tech" in politics means executives/VCs. We just need an association that funds employee friendly lobbying.
There is an organization in the UK, the BCS, that is widely regarded as irrelevant, and no-one can understand how it still exists. It adds zero value to anyone working in the industry and in fact frequently undermines workers for the benefit of large employers or the government. For example it is peddling the "skills shortage" myth.
If we have a guild it needs to be by, and for, actual workers.
Also, I feel most managers & non-tech people take advantage of programmers. You want to build a business out of an app with good programmers but you don't want you chicken to go & lay egg in your neighbor's house.
I'm union, as are most of my colleagues, even though we are highly paid white collar people. The union would step in with lawyers etc if I got into some kind of trouble.
I think we need the same at least an organization we can belong to with the sole purpose of protecting our creative freedoms via lawsuit defense etc... I'm also willing to promote the cause on my YouTube channel with close to 5 million tech viewers for FREE. This article really pissed me off.
My experience with employment contracts has been that in addition to the "anything related to employer's business" clause, there will also usually be a schedule at the end of the contract where you can list specific side projects you're working on --- and that schedule can be amended (or extended with a clause like "anything agreed to in writing with your manager") later on.
It's not ideal from an employee's perspective, but it's at least less unpredictable.
Is Joel a supervillain? Why is Joel writing this and, given his obvious conflict of interest, addressing it to developers as if it were friendly advice, when it is not?
I advise people not to work for Joel or his companies. This is developer-hostile advice from someone who should know better. You don't want to work for a guy like this or his companies.
I just started at Google this week, and this is something I'm terrified of. Side projects are vital to my personal identity and development, and knowing that I own them is vital to my motivation. The thought that my employer might try to claim ownership of work I've done all on my own fills me with apprehension and I still haven't figured out what I will do about it.
My old employer was one I felt that I could trust to not abuse its power.
This gets super muddied when you consider doing FOSS contributions as part of your work. Sure you can sign a contributor agreement, but its not yours to give away. The employer owns the code you contributed to a FOSS project. The project got the signature from the wrong entity.
> The employer owns the code you contributed to a FOSS project.
I think this is a pretty US-only type thing; at least it's not very common in Europe. Usually (in Europe) ownership of code depends entirely on when you did the coding -- if it's on your own time you own the code. If it's when you're at work then obviously it's the company's code. Of course there are the usual caveats about "is it too closely related to work code?", etc. but if it's a totally different area of business, then you should be fine. There may be differences between employers, but even if employers explicitly specify the "we own everything" clause you can usually get specific exemptions as long as you ask in advance.[1]
[1] I don't know if there's any legal theory (in Europe) to support the claim of ownership over everything you do, but Europe is pretty fragmented when it comes to law, so it's probably pointless to speculate on this point. I'm actually not sure if the "we own everything" clause would hold (or has held) up in court in any European country.
In Germany you usually have some paragraphs on this in the (work) contract (there are a couple popular variations - there isn't much leeway provided by German law here, which is good). "We own everything you do" is definitely illegal in Germany, and also not put into work contracts (such a clause would be void anyway).
The legal construction is basically that the employee grants an exclusive, irrevocable license[1] to any IP produced by the employee for the employer. There is of course a grey zone here, but it's quite narrow, and directly non-existent if the side project is unrelated to the current core business of the employer.
FOSS contributions aren't really touched by this; you work on behalf of the employer to contribute to a FOSS project and the exact same terms and conditions apply as always (you put your name on it, not your employers; since exclusivity of the license implicitly granted to your employer conflicts with the FOSS terms, but the employer explicitly commissioned you to do that, the latter "wins" over the former, ie. the license of your employer to the diffs you write becomes non-exclusive in these cases, because the exclusivity is implicitly revoked by the work assignment, essentially action implying intention) -- or so it was explained to me).
[1] This also means that you retain your copyright: it's not possible to transfer copyright in Germany. Very rarely things like "Copyright (c) 1871-1918 Softwareschmiede GmbH" pop up in open sourced stuff, but it's obviously something stamped on when open sourcing, and equally obviously incorrect. The copyright still belongs to the developers involved in the project, but because the company "Softwareschmiede GmbH" has an exclusive license they can re-license it on their own accord under any terms they want. They'd still have to, technically, state the correct copyright, though.
UrhG § 69b is the regulation specifically for software developers that work contracts typically refer to. Usually there is also a clause referring to UrhG § 31a to license usage rights of unknown kinds of usage as well.
---
btw. seems that I was wrong about copyright attribution. Got a mail, apparently some contracts include a clause that the employer can in fact attribute any work to herself, so "Copyright (c) 1871 Foobar GmbH" can happen and can be correct.
Usually (in Europe) ownership of code depends entirely on when you did the coding -- if it's on your own time you own the code
Despite all the paranoia that would suggest otherwise, that's quite often the case in the US as well. Regardless of what your employment agreement says, it can't trump state law, and many (hell, maybe most) states have laws that clarify that work you do on your own time, on your own equipment, that isn't in the course of your employer's business, belongs to you. Of course IANAL, but I did a lot of research on this topic a while back, since I have been in the position of working on a side project while maintaining full-time employment elsewhere.
You can ever be sure what a given court will decide on a given day, if it comes to it, but I think a lot of people overstate the extent to which your employer "owns your brain".
That said, plenty of employers do at least try to "own your brain" and I think the reasonable response to that is to demand they pay you commensurately - including opportunity cost. If someone wants to "own your brain" they need to be paying on the order of millions of dollars per year, IMO.
> Sure you can sign a contributor agreement, but its not yours to give away. The employer owns the code you contributed to a FOSS project. The project got the signature from the wrong entity.
>The project got the signature from the wrong entity.
IANAL but... i believe (in the UK so presumably other common law jurisdiction like the US) the idea of agency solves this. If you sign that contract on behalf of your employer, the other party has the right to assume that you are authorised to sign and the contract is sound. The fact you just gave away something that belongs to your employer is now an issue between you and your employer. I would struggle to see how this could get beyond an employee disciplinary process unless it could be shown that the employee was showing some kind of intent in deliberately leaking secrets they knew they should not leak.
In some countries, it's quite different. In Russia, you own anything you made as long as
* you don't touch it while you're on duty
* you don't use the employer's equipment
Obviously, you still can't use any information classified as 'trade secrets' at your current job because it's covered under another law.
You can even work in a directly competing company (or start one) WHILE being employed because job contract can't legally regulate your off-duty time and you can have unlimited number of side-jobs, as long as it's under 20-hours-a-week, in addition to your current full-time job. You don't even have to notify your full-time employer about it. The 'non compete clause' doesn't work. And your full-time employer can't even fire you (legally) just because you work in/own a competing company, as long as you follow all the regulations.
Even the 'I don’t just want to buy your 9:00-5:00 inventions. I want them all' in the job contract can't work if I understand the Russian laws correctly.
As an engineer at a defense contractor, I recently had to go through the process of having my company waive my 100% IP ownership clause so that I could work with a startup on my own time without fear of putting them in jeopardy. It took about 3 weeks to process the paperwork, and answer a lot of questions, but eventually the paperwork was signed. It only allows me to work freely with the one startup.
However, the important issue here is the opportunity companies are missing by not offering any significant profit sharing from disclosed inventions. If I submit IP to my company and it gets patented, I get a $500 check. That's idiitic because it dissincentivises significant innovation, but it's unfortunately commonplace.
To solve the dilema, companies simply need to get their greedy heads out of their rears and offer inventors a profit share percentage such as 10%. If they don't accept, the inventor should be able to do with the invention as they please, which includes selling or licensing.
> offer inventors a profit share percentage such as 10%
Hmm. Good idea, but don't focus exclusively on profits. Many innovations aren't profitable sources of new revenue per-se, but cost reducers (which can then make other previously-ignored sources of revenue viable).
"...don't focus exclusively on profits. Many innovations... [are] cost reducers"
I agree and I like your idea of also covering cost reduction efforts in profit sharing models. It is undoubtedly easier for companies to swallow a significant cash payout to an employee when they are receiving a large corresponding cash infusion resulting from sales of a developed idea. Following implementation of an efficiency improvement, understandably, as time passes companies tend to only see the current bottom line as the norm vice seeing "what could have been". You can project a companie's profitability over time and use this as a basis for a cost savings award. However, increased uncertainty with time makes it difficult to validate the truth behind estimated savings calcs (i.e. what is vs. what could have been).
For example, if I intoduce a cost savings initiative instructing my customer to switch from diesel to LNG fuel based on the price of the fuels today, then next year diesel prices unexpectedly plummit, at the one year mark the initiative actually became a cost increaser. Thus, any award based on annual projected savings will also need to factor in the diminished value as a result of uncertainty. Cost savings projections are non-deterministic.
I guess my point is that I think cost savings sharing is much more complex than a profit sharing, in which you simply take a cut of any profits (albeit a significantly smaller portion since the company is assuming the development/commercialization risk) that roll through the door.
That said, I could see cost savings awards as a one-time award based on the agreed upon value at a given time, rather than an ongoing profit sharing program that pays out until the product is no longer profitable.
I got a little confused of this article. Firstly, the author try to say that side projects are belong to the company hires you as full time employee, and, then throw the game designer example, but it sounds to me like the game designer is contractor not a full-time employee, so, it follows the default copyright, I am ok with that, and then, the author start using this case to approve the relationship between your side project and your employer as you are a full time employee. Am I missed some info?
I remember that in Canada, the full time employee contract mentions something like, 40 hours per week, and also explicitly mention if you use company's property or equipments to produce some, or you produce some at company venue, then all copyright belongs to the company.
That's $72k a year, which sounds like a full-time employee somewhere outside of silicon valley. In addition, you don't generally pay contractors a fixed amount per month, but rather per hour. Note how the example of Sarah the contractor has the pay rate set at $20 per hour. Also, further on down, it explicitly says the game designer is being paid a salary, which is something that employees, not contractors, get.
It's disappointing that there are no conventions or legislation to rectify this situation. I have several side projects going right now, and it gets frustrating going to interviews and being asked to give up all of it just for the supposed "privilege" of being able to write code for a larger company. The solution I've found is freelancing, but this has the problem of not really providing steady work.
Many companies allow you to hold on to "previous inventions" if you document them before signing up with them. It gets a bit fuzzier for projects you start while working at said company, and the trouble of documenting said previous inventions is enough that I am not sure is worth it except in the case of major projects or patents granted to your name personally, though.
I'm fortunate enough to have a friend who is an employment lawyer and as a favor will read through any new employment contract before I sign it.
She'll point out any clauses (not just IP clauses) designed or phrased in such a way as to be unfair in the employer's favor, and will suggest alternative language that protects both them and me.
I have yet to encounter an employer who wouldn't accept a few small changes to an overly broad IP clause, and print and sign a fresh copy of the contract with the changes incorporated.
My current employer took very little convincing to accept the idea that they only wanted the IP created for them, not all IP created during the period of my employment.
After all, as I pointed out, they have no more interest in owning the code or design of my block association's website than I have in giving it to them. And it's unreasonable to expect me to cease to be its maintainer just because of a job switch from a fashion startup to an entertainment industry startup. As long as I don't work on it during work hours or using a work computer/internet/etc, why should they care what I do with my evenings and weekends?
So they accepted a modification. Of course, we might have trouble if I tried to compete with them in some way. But even if in my spare time I create a tool or library that eventually ends up being useful in building their own software, I retain the IP to that library. I might not get away with licensing something like that to them for a fee (good faith cuts both ways), but if it's already BSD licensed anyway, they can add it as a dependency and everyone's happy.
And if I want to be paid for contract work for an unrelated startup on weekends, well, that wasn't the use case I used to convince them. But the contract modifications give me the right to do so without turning the IP over to them. And again, if it's not competing, why should they care?
TLDR: Read and understand contracts before you sign them. Get help understanding if you need it. Don't sign something you don't want to be held to the letter of. Sometimes employers are flexible.
What would people think of a website that collates instances of companies taking legal action against employees regarding side projects and then ranks them with respect to 'side-project' friendliness? Would a bad rating for a company impact your decision to take a job there?
Also, it would be cool if there was some widely available standard 'developer friendly' contract (or even addendum to a contract) that software engineers could table when negotiating a new job. It should be fair to the employer too of course, but it would give less experienced developers or those in a weaker negotiating position for whatever reason something well thought out to use.
I'm very interested in this because it's a great first step towards politically organizing. PM my username on Reddit if youre interested in collaborating.
I sent you an PM on reddit, my name is Chris Hawkes I have a YouTube programming channel with close to 5 million views and over 40,000 subscribers all in the tech niche. I'll be glad to promote and provide exposure to this website/cause for free. Let's get this going?
And of course, nothing stops an employer from harassing you legally.
I was working on a personal project once and it seemed to make sense to join it with another product from another company. We collaborated on the combination design, but never moved forward with it. I never joined the company and I was never compensated in any way. No joint product or code or anything was ever produced.
However, the CEO of that company threatened me with legal action when I joined a different company to implement what I was working on. He sent a cease and desist to me and the company. I had to retain a lawyer to fend that off. Luckily, the accusations were so ridiculous it wasn't hard.
I'm in this exact situation right now where I worked as a developer for a small company. I did a side project, and they demanded I hand over the project so they benefit from it. I refused, and we are deep in a costly legal battle. But it is a matter of principal that I won't let those a*holes benefit from something I did at home, on my equipment, without any of their IP, and unrelated to the work I did. I can tell you I've learnt a valuable lesson and will never sign an generic software development employment contract like that again.
I've had to reject an offer I wanted because the IP terms were draconian (even beyond what I consider standard) and the company wouldn't badge on it.
Other companies did agree to make changes to get an otherwise unacceptable contract bearable.
This situation has taught me 2 things:
1 - most developers don't care, those that do know about it, don't think it's a big deal.
2 - because it has basically become industry standard developers assume it's OK and that no one would sue them.
One idea for tackling this is for the employer to say to the employee "We own everything you do 365 X 24, but we will give you exclusions for pretty much anything as long as you identify the side project name and description in writing."
This means that just about all side projects are permitted, but must be identified in writing in advance, and gives the employer the chance to decline to approve, and in that circumstance then the employee can leave if they want.
It's just so wrong on so many levels to deny anyone their shot at independence.
Companies taking advantage of ambiguities in the law or making employees live in fear of innovating on their own terms is wage slavery in its illest form.
It is common in the US, yes. I've signed a few over the years. I always check the wording of the restrictions to be sure my side projects are clear. And most of the time, the legal counsel for your employer will let you explicitly add on projects as being excluded form the agreement, so you can continue to work on open source projects or prior inventions without having to worry about it.
I definitely recommend that people consult an attorney if they are concerned about the specifics of their own contract. The details of each situation can be quite different.
US employee here - I've signed one (plus a patents & inventions at one firm) at every firm I've worked at since 2000 or so. Thus far any side projects haven't been a problem for them, as I have made sure to target a different industry. But legally, they could have enforced the contract and taken possession of my code.
Even winning a lawsuit costs a lot of money and stress. Unless there is a law that makes courts throw out frivolous lawsuits immediately the employer with lawyers on staff still can make your life very difficult
Well, why not just go development and collaborative way of doing things and not make a gist/repo with a list of companies friendly to side projects, and unfriendly? Like Glassdoor it will add more clarity and competition to those companies, since people would know what they're signing for _before_ sending CV, going to interview or signing the offer.
No topic for a side project is really “safe”, which is why I hope most laws focus on what you do for a company and not what your company might ever do.
I mean, imagine for instance that you simply had a band and tried to sell a few songs. And that you were an engineer. At some point in history, it would have made perfect sense to do this at Apple, with no overlap at all. Heck, I remember the ongoing lawsuits over the years from Apple Music just because of the name of Apple Computer at the time, and I think at one point they reached an agreement simply because Apple Computer was not going to be in the music business. And at the time, this seemed like a no-brainer, crazy to imagine Apple doing anything in music. And then, oops. So no, on a company-wide basis, no side project is really “safe”; companies can and do enter new lines of business, even things that seemed implausible at some point in the past.
Joel's exposure and 100 million dollar mindset is frustrating. I created a video response expressing my distaste for such contracts Joel feels should be the status quo and really feel we need to come together to make sure laws are passed to protect the creative freedoms of all developers. https://www.youtube.com/watch?v=l6ypPpk9ymg
The ball shouldn't just be in the employers court for all intellectual property created while employed. Joel is just another uber rich techie doing what he can to make sure nobody under his staff is able to build the next big thing.
I'm boycotting StackOverflow & all of StackExchange as well.
A company I worked for (property appraisal company) got acquired by another company. They forced one of the higher up developers out. 6 months later that developer wrote an app dealing with lines at Disney and was making money on ad revenue. The company came after him claiming they owned it because he used skills and knowledge he gained while employed to write that app. We had a "everything you do at any time belongs to us" contract.
He was at the original company for 15 years at the time and was the 2nd developer at the company. So he had a lot of friends at the company and he told his friends at the company that he made this cool app and word got around because everyone thought it was harmless to repeat.
They got acquired by another company and then gutted, most of the management that did that got thrown out after anyway so I don't know how much it matters.
That being said I always read my employment contracts now.
Google has an application process where, before you've written any code, you can ask for copywrite release. However, if you don't do that, they can and WILL claim ownership over your personal projects. It's happened to me.
Google is actually pretty good about this. They clarify some areas that are no-no, and there is a simple process for asking if a side project can be released as open source.
At my last job working for a small software company, I was able to get my boss to modify the employment contract such that a specific list of other projects (attached as an appendix to the contract) was excluded from the work product & IP ownership clauses. The idea was that if I wanted to work on a side project, I would clear it with him first, and then we would sign a quick amending agreement to the original contract which added the new side project to the list.
Major caveats: I haven't ever tested this method in an actual legal dispute. Also, the negotiation involved a shouting match in a crowded bar. YMMV.
That's what I've always done. I've found that most employers have few issues with saying "these projects predate employment and we don't own or want them."
In one case, I had a clause that said "anything that increases my recognition in [area of tech] is now owned by the company." It was almost too broad but I managed to stay well within the bounds and never have a "questionable" project.
I've had three companies rewrite or append something about past IP or even current IP on the weekends unrelated to the company, the company's hardware, or the company's time.
If you approach it right (sometimes I show them how this limits our ability to work with OpenSource software) you can often swing it. Admittedly, the larger companies are less likely to entertain the request of some new hire.
I think more people should bring this up in the hiring process (you don't have to push it), but lets teach companies that it's not just vacation that maters to us.
One good way I thought of, is to mention that you volunteer your skills to nonprofits on the weekends / vacation, and that you want to make sure they don't have any legal issues down the road. So if they hand you that form, tell them you need to send it to your lawyer first. Then have your lawyer and their lawyer figure it out.
What about a situation when you develop something in a company, then company doesn't show interest in it and effectively shelve it, and then you leave the company and want to come back to developing it? Be it in another company, which is yours or not?
Technically it's a property of the previous company. However if you later enhanced and expanded it further, you ought to have a share. And in practice, don't we have some good examples of startups which were built on ideas initially rejected?
Isn't there a relatively easy way to solve this problem?
As an employer, when you decide to hire someone to produce software for you, you assign them a private key tied to a certificate issued by the employer's certificate authority. The employer then has tooling which requires all commits to the employer's repositories to be signed with a certificate issued by the employer's certificate authority.
Then it's very simple: any code which has been signed by those certificates unambiguously belongs to the employer. Any code which has not been signed by those certificates does not belong to the employer.
Employers can demand that employees sign their work with these certificates in order to consider the work done, so employees who refuse to sign the work with those certificates risk giving up their salary for breach of contract. Employees are then free to sign whichever code they want on their free time, and assert ownership by virtue of it not being signed with their employer's certificate.
There isn't, but remember, the whole point of signing something is to put it out there in the open. If an employee grabs older work, signs it with his personal-project key, and then tried to sue the employer for using code which belonged to him, then the employer could easily show a court the timestamps/logs which prove that the code was originally signed over to the employer and thus belonged to the employer under contract. And if the employee is secretly signing work with his own key over time before signing it with the employer's certificate, then his own record of ownership will be in parallel to the employer's record of ownership, thus proving that the work belongs to the employer under contract.
The whole point is how to distinguish work that the employee is not signing over to the employer at all - because it's originally a personal project. Then the employer will have no record of the code being signed over to the employer, and the proof clearly shows the code belonging to the employee.
If you read the fine print, software can't fall under the 'work for hire' provisions. At all. People think so, but just saying 'work-for-hire' in a contract isn't valid (enough). There has to be a explicit copyright transfer process backed up by paperwork.
I ran into this myself, but decided not to get in a tussle with this client who turned out to be ripping off customers, not paying me, etc. etc. Things had been progressing along under the assumption the company owned the copyright, or I was implicitly transferring copyright, and to go and try claw back everything I'd written would have been perhaps futile (the courts would not have thought much of my change of mind) and a very big time and money black hole.
I thoroughly pay attention to contract matters now. I never had a bad client before and none of the stuff I'd developed before either seemed valuable enough. But writing _all_ the code for a startup that ... oh, I don't want to take about it :)
It seems completely alien to me that a third party could claim ownership of something I've built because I'm using a craft / skill that they pay me to use too. I live in the U.K. And work as a contractor. I've seen odd looking IP clauses in contracts but have amended them or felt confident I can sign them irrespective.
"original matter, work or creation" - on my occasions I wanted to ask how about:
1) cake recipes
2) gardening
3) drawing with my kids
4) urine and excrements
5) photography
(if I was to create YouTube channel talking about philosophy that would inevitably belong to them as well)
Can we please introduce employment contracts that are fair to both sides?
I'd love to see some clear legal advice from YC on this; my guess would be if you are taking a first employee the idea that they would have any time to do anything other than the startup means they were the wrong first, second or even twentieth employee.
I'm not familiar with the US legal system but this sounds to me like solving the wrong problem. Take the example of the game developer - why can't you create a contract that says you pay her for 6 game ideas, including the IP to these games?
It shouldn't matter if she comes up with those ideas during 9-5 or any other time. It shouldn't matter if she comes up with another 4 ideas of her own on the side, or even works part-time for someone else too. You're paying for an outcome, 6 games including all associated IP because that's what you're going to sell on to the public.
Why not just ask for a permission from the management? Drop 'em an email, explain what kind of side projects you plan and that the work will be done strictly in your free time and not interfere with you work for them. It's 99% that they'll answer it's OK, it's at that early point insignificant issue for them, and later that email response is legally binding as much as any contract. Of course, it's a smart move that you get a legal advice how to phrase the question to cover your ass properly for your state/country laws.
This was totally biased bs. Not all companies try to own all your intellectual work and if they do then look for a new employer. And in 99.9% of cases it's super easy to understand what is related work and what is not. If your company builds an online casino and you write code for a slot from 9-5 then the next social network, airbnb or uber you do at home is completely unrelated. Only a total jerk would try to claim the right on such a side project and only an even greater jerk would try to justify it with a biased blog post.
You have obviously never tried to find a job in France. All big companies and laboratories will make you sign a no-compete agreement which encapsulates 100% of any code you could write. Even most startups do so. It is a shitty situation.
You are right I never worked in France. I worked at many companies and I never had anything like this in my contract. The only standard thing I get every time is to not be able to work on anything that directly competes with my employer.
The problem is that the "direct competition" is too vague of a term to rely on. If you work in a services company, then practically any code is competing with them. If you work for a startup, then they can pivot at any time.
The one concession I got was that I can negotiate the ownership of code I do outside work case by case.
There's a loophole in most of these draconian contracts: they might own the copyright of what you do in your spare time, but they don't get to decide the license you use for your software (at least I've never seen any clause about this, ever). Then the solution is to use a liberal opensource license (MIT), and publish it somewhere. If you decide to reuse that code in the future for your own venture, you can just use it, the license allows you to do so even if the copyright is owned by your previous employer.
That's an assumption. Following that assumption, you would need to ask your employer if he agrees with any tiny contribution you do to any open source project out there. Which doesn't scale. What the employment contract does is own the contribution precisely because it doesn't make any sense to ask permission everytime an employee writes anything in his own time.
You're saying it's "an assumption" that only the copyright holder can dictate the license? That's not an assumption. That's the whole point of copyright. The owner of the copyright determines the terms under which others can use the copyright.
Consider this: every open source project that has wanted to relicense but did not explicitly require a copyright assignment, had to talk to every single contributor to get their permission to relicense.
> Following that assumption, you would need to ask your employer if he agrees with any tiny contribution you do to any open source project out there. Which doesn't scale.
This gets into not what is legal but what is reasonable and sensible.
If you write 20 lines of code using your work computer on work time and don't have prior authorization to give that code to an open source project, you technically have to get your employer's permission. Realistically, few employers would frown upon that.
There are still companies out there that are not open source friendly. If you work for one of those, you'll find that you actually do need to get permission before contributing code.
I should note that I am taking the US perspective on this. Different countries have different views of copyright, and as noted in the original post different US states have different views on employment contracts.
IANAL, but I have managed and worked closely with some reasonably large open source projects and spent more than my fair share looking into licensing terms.
That's an interesting thought - does the copyright assignment happen before or after the license assignment?
Let's say my contract says "employee agrees to transfer copyright to all work". Does that happen immediately the moment the work comes into existence? If yes - you can't actually license it how you want, since you're never the copyright owner of the work.
What if I just don't assign the copyright? It is clear breach of contract, but at least for some amount of time, the company isn't the copyright owner, so you CAN assign a license. Can the court grant a retrospective copyright ownership, so that the original license is null? What if it was GPL3 and you gave the code to someone else, who made their own modifications and started distributing their version? If they're making money from it, could they sue the original company for loss of profit in the event that the court decrees that they don't actually have a license following the resolution of the lawsuit between the company and employee?
My three colleagues and I just took a look at our contracts after reading this. We are contractors, not employees. We saw this interesting phrase:
"Contractor may provide services to third parties so long as Contractor does not provide any software development services to other entities. "
"Other entities" is an interesting term. Since the contractor is explicitly mentioned in the text separate from these third parties or other entities, it would seem the contract does not prohibit the contractor doing work for himself.
He doesn't mention that many companies who want to be friendly to their creative tech employees' habits have a legal/approval process for carving out specific side projects.
Usually when you sign that inventions assignment agreement (the dreaded PIAA), there is a place where it says, now list on Appendix A all the inventions you previously created PRIOR to coming to work here.
And THAT'S the place to leave truck-sized holes to drive through, especially if you have a good idea of what your side project interests are at that point.
it seems to me if the technology is unrelated, for example, if you work for an enterprise software company and you created a web app for consumers regarding your hobby of sports. i think what joel's saying is if that they're sick enough and the employer wants to sue you, they definitely can, they have the legal ballast to take you to town. but would they? i guess that question depends on a couple things, one if they have some personal vendetta against you, they want nothing more than to make your life miserable. or two, they think what you've built is lucrative and they want a piece of it.
i'm just curious if there are precedents where someone's side project, completely unrelated to their company's product/market/customer base, but it ended up being lucrative and the company negotiated some shares/ownership of the side project become startup.
At the moment I am not working at any side project, but occasionally I have idea or two, and I was just waiting for a right time to start working on them.
Reading this was quite devastating, not even started, and I feel like I already lost, even though my side project has next to nothing to do with my current industry.
If you read the full article, it covers the law in California which has three tests. Two of those tests are straightforward (company time and company equipment), but the third (related to the company's business) is less straightforward. My impression as a non-laywer is that the courts will probably take a somewhat narrow view of that third test, but the actual language in the law is pretty vague and some companies are involved in many fields.
EDIT: May be a bit less narrow than I thought. This [1] journal article cites some relevant case law.
I think he is too dismissive of company time though. Company time is very straightforward only if you work 9-5, but a lot of companies let developers work flexible hours and work from home, which I think makes company time less straight forward. Then when you add on call or emergency work you have to do off hours or on weekends (even once every 6 months) it makes the idea of "company time" even more vague.
In the country I live in (Sweden), such contracts are very rare and I don't even think they would be valid in court here. What you do in your spare time is your own shit.
In Sweden, you cannot force a worker to only have one job for example because that is illegal.
It seems to me that the right to work on side projects that aren't in direct competition to the work you were hired to do for a company is the sort of thing that unions might advocate for, if tech workers had unions.
We share a lot in my company - I don't mind if the devs want to use some of the stuff we make and in turn they offer stuff they make to me. Works well and there's a lot of trust. we cover it legally too.
Doesn't this mean I can host my side project on company infrastructure? Commit it to company repositories? Submit it for code review which will probably be done on company time?
A good write definitely and I have been cautious on those, i.e. if I want to make some real products I do not work for anyone in-between to stay clean. Side-project is too tricky for both sides.
With that said, which employer wants their employee watching TV and not breathing software 24/7? I really struggle to imagine the risk here is greater than the reward.
I certainly would prefer that my employees not get burned out. What they do after work is none of my business, but I definitely hope most of them aren't living and breathing work 24/7.
after i figured that he is CEO and cofounder of many famous startups, I feel bias in this article and I will make sure I will not work him in the future for sure :-)
I negotiated IP assignment out of my employment contract before taking my job. I wouldn't take a job that tried to lay claim to my work outside of work.
For the most part, a developer shouldn't be in a poor bargaining position by the time a contract is on the table. They've invested time and money into you. They want to hire you. This is where you stake out your claim.
And we should never be coerced into death marches. But it still happens in reality.
The offer of a contract might bolster one's bargaining position a tiny amount, but usually it is still dwarfed by the huge power the company still wields. Especially if one is in the position where they really need the job. If you're unemployed, then you have no bargaining power, regardless of whether they're offering you a contract or not.
>If you're unemployed, then you have no bargaining power
I see what the problem is. I can read it in your tone. You only have no bargaining power if you think you have no bargaining power. I successfully negotiated up $15000 (to $60000) with paid relocation on my very first dev job. I was unemployed for nine months (in which time I masted a rather obscure framework) and coming from a background in sales. It seems being quite good in sales has helped me where other developers fail: bargaining.
Not a lawyer, probably wrong, but: California's courts won't enforce a contract not recognized by California law, but the courts of other states will, and it will depend on whether the employer can get personal jurisdiction for the case in the right state.
The short answer is: in your situation, you'd need a lawyer.
(I think --- not sure, not an authority --- that the "incorporation in Delaware" part of this has minimal impact; your residence in North Carolina, and the firm's operations in California, are probably the big two salient facts).
I've never seen a contract that didn't stipulate the jurisdiction it would be enforced in. Maybe that doesn't matter, I know there's a lot of overreach in these things.
It would depend on the local laws and the wording of the contract. It would be highly unusual for an employer to claim ownership over pre-existing IP (unless that was the reason they were hiring you).
Of course even if pre-existing IP is owned you don't want to be in a position where contributions to the same project after date of new employment are owned by the company, creating a divide in ownership.
Yes and no. My thinking is coloured by a few years in law school before dropping out.
If there is a true "five nines" in our lives, it's the reliability of the law. We each interact with and under the law dozens, hundreds, even thousands of times every day without ever needing recourse to lawyers.
But when you need a lawyer, you need a lawyer. One might as well sigh heavily about needing plumbers when the pipe bursts. Specialisation is normal and -- this is what I like most -- lawyers are more than a paid service. They have a fiduciary duty, they are ethically required to be dutiful advocates.
Personally, while I wish the world was simple and lawyers were cheap, I have never regretted spending the money to consult with them.
Not really. They're experts in law. We're experts in engineering. Doctors are experts in medicine. Would you say it's tragic that one needs to pay a doctor to tell you what's wrong with you?
But often when things come up and it's "Hire a lawyer" it feels like responding to "How do I change my password?" with "Hire a software engineer." The law is very user-unfriendly.
Also hearing that I should take the same remedy whether I have a question or I need to be defended against criminal prosecution seems strange and intimidating, like being told I should hire a brain surgeon for a migraine headache.
So lucky to live in a country where the average number of interactions with a lawyer in a human life, both personally and professionally, is between zero and one.
I feel like this article grossly exaggerated the nature of the laws and relationship between you and the employer. I think it's a good thing that Joel isn't a lawyer because anyone following his advice will lead to implosion.
First, there is a very high bar for what is regarded the property of the company vs your own work. Even if you created your own open source project website and pushed code on your own github account using their laptop, as long as it doesn't directly compete or use portions of proprietary code, there is zero chance it will stand in court. Non compete clauses are next to impossible to uphold unless they literally sold trade secrets or company's code directly for profit. Even if they made a near identical version, it would be a tough uphill climb if you didn't copy & paste their code directly in your own source code.
Of course, the Goldman Sachs vs open source dev was a very interesting and a rare case. I don't have more insight into that case but if somebody could that 'd be great.
But for the most part, Joel's piece is spreading FUD into innocent developer's dreams and projects, and you don't need to heed attention.
For the truly paranoid and follower of Joel's flawed legal analysis which looks at syntax than the semantics or spirit behind the written law which almost always the overwhelming use:
1) Incorporate your own company
2) Purchase laptop under your new corp
3) Do your work on there.
Disclaimer: This is not a legal advice. I'm not a lawyer. I could be wrong. Check with a real lawyer and do your own due diligence.
That's sound legal advice regardless. If you can afford it, having your own company under whose name you can do your own projects protects you greatly from legal action.
I have to say, I'm really, really sick of the entitled mentality that companies take towards those that actually do the work keeping their business afloat.
It's not an entitled mentality per se, it's just that a company is a profit-maximising entity a-la a hypothetical paperclip-producing AI that eventually turns the entire Earth into paperclips through no ill intent.
I always thought of Joel as one of important Excel authors. I was very much surprised to see he is CEO of Stack Overflow now. Giving context of the article, I am going to re-read carefully Stack Overflow ToS.
SFC is working on a project called ContractPatch to show that it is possible to (re-)negotiate your employment agreements so that you own copyright on your work and to help developers go through that process. Some information about ContractPatch is in this recent podcast episode and the show notes:
No, it's not that ambiguous at all. The courts rarely side with the company, and only in cases where it's quite obvious the work was directly related. If your side project isn't directly related to the work you are doing, then you don't need to worry.
Don't let Joel or any other tech CEO scare you into not working on side-projects. Don't even tell your employer about side projects. Leave them out of the loop entirely.