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I'm well aware that this site is not for legal advice, so I ask only for a citation of how this problem is typically solved.

There're two parties to the agreement - the employer and the developer - and the employer wants to prevent the developer from developing software that would hurt the employer's market position. So the employer simply words it as "similar software".

The problem is that if the developer crafts a daily build script for the employer then many other daily build scripts will be "similar" so basically he can't craft any daily build scripts (except for the employer).

Is there a widely accepted practice to word such things in agreements so that the wording can't be stretched to prohibit such sane cases?

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closed as off topic by pdr, Dan Pichelman, Caleb, Kilian Foth, MichaelT Jun 21 '13 at 19:51

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...so I ask only for a citation of... legal advice. That doesn't make it any more on topic. –  Caleb Jun 21 '13 at 15:06

2 Answers 2

The exact clauses will vary widely depending on the relevant jurisdiction and what should be covered (is it only activities during the employment, or should also activities after the employment terminates be covered, what kind of business does the employer conduct, etc.)

In the simple case on an in-house employed developer for writing software packages for use/sale by the employer, it would most often be simply phrased as "the developer shall not undertake activities that compete with the business of employer".

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Most non-compete agreements that I've seen and sometimes signed used a phrasing that prohibits "outside work that would be in competition with the employer's business offerings or interests." The better agreements explicitly spelled out an approval process for the employee to work on a potentially competing project after receiving approval from the employer. That allowed for open source contributions. The best agreements also had exclusion clauses for works the employee had started prior to employment, but those projects needed to be listed with the employer.

You will most definitely need to consult an attorney familiar with business practices in your locale. This has been a contentious area of law, and jurisdictions do vary in their interpretation.

The overall intent is to protect the employer's line of business. If the employer really is in the business of creating daily build scripts, then yes, the employee needs to acknowledge they can't do that outside of work without the employer's approval. If the daily build scripts are simply a means to an end and not necessarily a product offering, then the employee should be okay in crafting other build scripts.

A more practical scenario would be an employee who builds a hypervisor for company XYZ. Working on an open-source hypervisor would then be in conflict with XYZ's interests unless approval is given to work on the OSS project.

Non-competes can get problematic for employees of large companies. I used to work for a multinational firm with hundreds of thousands of employees and a few bazillion software and hardware product lines. It was hard finding projects that wouldn't necessarily compete with my employer's interests. OTOH, they were really good about approving OSS contributions that didn't compete with direct day-to-day duties.

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