A very common mistake I see being made by developers involves the signing of their employment contracts. Oftentimes there are clauses, like invention clauses, in the contract which can have a signficant impact on your personal time and pet projects. The purpose of this article is to make you more aware of the legal issues involving employment contracts, and help you avoid signing a contract that could potentially harm you. As most of my readers do realize, I am not a lawyer, this article is not intended to hold up in court, if you have doubts always consult a professional.
Congratulations! You're hired!
Exciting, isn't it? You've gone through the entire interview process and been offered the position! The HR department sends you a bunch of forms to fill out including their "standard employment agreement". Many people I know glance over the agreement quickly, shudder away from the legalese, and sign the form. Many others actually read the legalese, see something they don't like, but are afraid to say anything about it because they really want/need the job and don't want to "cause trouble" before they are even in the door.
Do not be afraid to contest sections of an employment contract
If something looks unfair or out of place to you, do not hesitate to contract the HR person about it. Explain to them why you feel like the clause(s) in question would harm you and ask if they have an alternative contract or would allow you to modify the contract. There have been quite a few times in my career where I've sat right in front of the HR rep, crossed out the sections I don't agree with, and wrote my own version of those sections to be less restrictive so I could protect my time and personal activities. Let me also point out that not one time have I ever lost a job offer for wanting to modify the employment contract.
Invention Clauses: What they mean to you
The invention clause is the most dangerous clause in your employment contract as a developer. Generally speaking, an invention clause has the purpose of protecting your employer by requiring that you sign over any and all rights to anything you invent. This makes obvious sense: If you have a job for XYZ corp working on proprietary software, you obviously shouldn't be allowed to pull your work out and resell it to one of their competitors. They financed the creation of that software and the tradeoff for your paycheck is giving them ownership of your work.
The problem comes in when companies attempt to tie up work that they have not paid for. Many times invention clauses are designed to be very broad and can be interpreted to mean the employer owns any software you create. This is a huge no-no to sign. The repercussions of signing this is that even if you create a software program completely unrelated to the business of your employer, they could still claim ownership of it and come after you. Do you do small consulting projects on the side for friends and business contacts? Be careful, even though you do these projects on your own time and equipment, a broad invention clause could mean your employer could assert ownership over that work and sue you for the revenue you made.
Defeating the invention clause
A good contract that has an invention clause will have a section to write exclusions for works you previously created or are in the process of creating. Basically in this scenario they want you to list everying you own now and are working on and say that anything you create going forward belongs to them. This is ok if you have no desire to work on anything but what your employer gives you, I never signed these contracts personally.
To defeat an invention clause, make sure you edit (or have HR edit) the contract to specify the following key points:
- All work performed under the direction of the employer belongs to the employer provided that it is done on company time/payroll, it is done on company equipment, it is specifically requested by the employer.
- All creations by the employee not related to the employer's business belong to the employee so long as they do not use company time or equipment.
Those two modifications are usually enough to satisfy the employer that all their work is protected, that you won't go behind their back and compete with theme, and still gives you the freedom to pursue your own projects on your own time.
Moonlighting
Most companies are against moonlighting since they know that you only have so many quality hours of work in you each week. By taking side jobs you are potentially reducing your effectiveness during the time the company has paid for. It is very hard to defeat a moonlighting clause unless you already have a side job in progress. This section of a contract I'd say feel free to ask about overturning if you already have a gig, but otherwise I'd leave it alone. If any modification is to be made, try to put in that you can moonlight with consent of your manager.
I hope this article helps all you developers out there to be more aware of the repercussions of signing a contract with an invention clause and helps you to realize that you do not have to blindly sign anything they put in front of you. At this stage of the hiring process a lot of time and effort have been put into you and an employer will be reluctant to lose you over a reasonable request to a contract modification. If they give you a hard time, they're probably not worth working for anyway!