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I'm working for a company full-time and myself part-time. I started learning the Mac OS/Cocoa/Objective-C at work, and then I got the "Brilliant Idea" that I'd like to program for the iPhone.

The iPhone stuff is going well, but I'm earning money there because I'm applying skills I learned on the job. What is commonly considered violating company policy on things like this? Is there any danger of the company claiming 'ownership' of my side-job?

If I leave the company, could they ask me to stop working at my side business? The company and my iphone stuff are in completely different "areas" but I'm still concerned. What can I do to make sure?

What else should I be wary of? Has anyone run into bad stuff like this before?

Thanks,

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7 Answers

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The law depends on where you live of course. Do not take my answer as a substitute for contacting a lawyer espcially if you find you are in violation of a written policy. You should either have an employment contract which you can read to see if they allow moonlighting or you should be able to consult your company's policy manual to see if it is allowed. You can ask your HR person what the policy is if you can't find it (don't tell them you are aready doing it, just say you have a chance to do some moonlighting and would it be OK).

In general if your company forbids moonlighting or if they require previous approval of moonlighting, you could be in legal trouble or lose your job if they find out about your side job.

If they do not, you are probably fine unless you did any of the programming on their computers or on their time or if you directly used their code in your app. In that case, they, not you, own the program in most places. Plus you could get fired for using company assests for private use.

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@HGLEM, no, I've been very careful to not use any company resources or time on this. –  Stephen Furlani Nov 22 '10 at 16:34
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You must ask a lawyer to look at your job contract.

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+1 This is the best way to approach this. Unless someone has gone through the same thing with the same company no one can really give any advice. Different companies have different policies. –  sange Nov 22 '10 at 16:00
    
There is no contract, I'm working 'at-will.' –  Stephen Furlani Nov 22 '10 at 16:00
    
No job contract? Is this common in the USA? –  user1249 Nov 22 '10 at 16:07
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@Thorbjørn Ravn Andersen, yes this is extremely common in the US –  HLGEM Nov 22 '10 at 16:25
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@Stephen - In the UK even if there is no written contract, there is an implied contract between you comprising "defaults" (as defined in law) and the way the two of you have behaved in your dealings. My understanding of US law (very very limited) is that by default projects outside work are considered entirely separate (unlike the UK where they are by default owned by your employer believe it or not) - it's one of the reasons the US is considered a good place to be an entrepreneur when it comes to IT as you can work for a company and on your start up at the same time. –  Jon Hopkins Nov 22 '10 at 17:00
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Many companies require you to sign an Non-Disclosure Agreement (NDA) that says something of the nature that you will not use knowledge of internal projects/technologies/etc. outside the company. However, many are also written very broadly to say that if you work on anything outside the company they can claim it as theirs. Typically, those contracts are too broad to enforce, but that doesn't mean that the company won't attempt it.

There are a few red hot conflict of interest warning signs you have to look out for:

  • Are you working on something that has overlap with your business?
  • Are you working on technology that your company may see as something they want or need?
  • Is the technology sufficiently similar to what your company uses that they can cry foul?
  • Are you designing something your company's user's will want?

Any time you have "inside" knowledge that can give your personal company an edge, it smells like conflict of interest and it would be a really bad thing to ignore it. If you don't match any of the above, don't think you are completely out of the woods.

Do have a lawyer look over any NDA's or other agreements you had to sign to start work. This includes a company's ethics and workplace conduct agreements. In almost all cases you will need to communicate with your employer about your intentions. They will give you further guidelines. In some cases, you will need to draw up a new written and signed agreement regarding the project you are developing outside their company and resources. (Just to be clear, internet connection from the office is their resource).

Tread carefully, but it very well can be done. The more outside your company's desired growth markets your efforts are, the less they will care.

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Please note, IANAL, and for anything you should get proper legal counsel.

In the US, the courts frown very heavily on companies attempts to restrict their employees' moonlighting. It's seen as a restraint of trade, and indeed it is. You have a right to ply your trade to your benefit and you don't have to answer to your employer, tell your employer or anything of that sort. Even at that, if you want to keep your job, don't let them know either.

Companies are not prevented from requiring you to sign draconic sounding things, like "as of the date of hire, you have no IP and you'll sign over anything you invent to them while employed there, and after you leave you promise to forever after show them anything you might come up with so they can decide if it should be counted as something they paid you for while you worked there. I am speaking from personal experience now.

They will also try to get you to agree not to compete with them for either a certain amount of time or within a certain geographical area or both if you leave.

Remember, just because you agreed to it in writing does NOT mean you're bound to it. Contracts have to be enforceable to bind parties and almost everything above is unenforceable, that is, little of it holds up in court except stealing IP, in your case source code or perhaps customer lists.

I used to puke up all over the contracts companies wanted me to sign until my lawyer friend told me to go ahead and sign it because it's meaningless.. it will never be used against you in court. All these no-moonlighting, non-compete contracts are just there to intimidate you.

It's amusing that one person believes they can tell others that they have no right to engage in income producing activity except if they approve of it. In fact, since the days of Kings and serfs, such "rights" have been steadily eroding. You company has no such right.

If you're not using your employer's code, customer list, etc. etc. then you're in the clear. Of course you "own" what you've learned on every job; how could it be otherwise?

If your company has a no-moonlighting clause in their employment contract, and they find out, they may fire you, but they almost certainly won't cite the moonlighting clause as the reason since they'd be opening themselves up to a lawsuit with damages they know they'd lose.

If they find out and want to get rid of you, they'll claim your performance is not up to snuff and go through the whole dog and pony show of performance improvement programs and all that which is how they get rid of people they don't like for whatever reason.

Don't steal your employers' code. Don't work on their computer or on company time. Don't let your employer know you're doing what you're doing; it's none of their business anyway. There are ways to obscure the owner's identity in a company without breaking the law. Don't be nervous about doing what you're doing, but also don't tell anyone at all because that's the way they're most likely to find out.

Best of luck with your million dollar idea!

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There's the legal issues and then there's the employment issues.

In most parts of the US, employment is "at will", meaning that the company can let go any employee with no notice or reason given (the employee, of course, has the same right). This means that, even if what you are doing is perfectly legal, your employer could terminate you for it.

The legal issue, typically, is if the employer has any claim on the work the employee did on his or her own time. This, again, varies by contract and jurisdiction, and the only actually reliable way to determine this is to consult a lawyer familiar with local employment law.

Check your company policy on moonlighting, which should be available in a handbook or your company intranet. If it's OK there, ask your boss, preferably hypothetically at first. If the company's policy is no moonlighting, or your boss doesn't want you to, you may have to choose between the day job and your evening activities. Presumably, you will want a day job, but you may be able to find another easily enough.

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What I'd really be concerned about is the company claiming IP rights over the software you have made on your own time. Very real danger if you were using the company issued Macbook . . .

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It would be quite silly of you to do non-work-related programming on a work-provided computer. –  sevenseacat Mar 7 '11 at 8:29
    
@Karpie, yes. I bought my own macbook for this purpose, and I use my own developer license. –  Stephen Furlani Mar 7 '11 at 13:56
    
Yes, would be silly in hindsight. But it don't mean people don't do it. Moreover, the question becomes a bit more interesting with technologies like virtualization and remote access. –  Wyatt Barnett Mar 7 '11 at 14:33
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Most if not all employment contracts I've seen (and worked under) during my career state quite clearly that any moonlighting at all is in violation of the contract and any income gained from it becomes property of the employer. In fact most state that anything created while employed (either during or outside of office hours) becomes property of the employer or his customers, irrespective of whether those creations are in line with the business of the employer.

So if you as a programmer were to start a side business building guitars out of your garden shack during weekends, those guitars (in fact the entire guitar building business) would become property of your employer.

Whether such clauses can be enforced in a court of law I don't know, but I've a feeling they cannot be unless the work you do on the side directly competes with that of your employer. But IANAL as pretty much everyone here.

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this is truly Draconian. An employer can seize income from other sources? What country is this in?? –  Stephen Furlani Mar 7 '11 at 13:49
    
don't know if they can, but they sure put it in your contract here which means that most likely someone, at some time, was able to do it. The argument runs some like any work you do outside office hours takes away from rest you should have gotten and therefore reduces your productivity while in the office, therefore the company should be compensated. –  jwenting Mar 8 '11 at 6:20
    
<cntd> I've even seen contracts where the company claimed ownership of anything created using knowledge gained during employment there up until 5 years after the employment ended, effectively making it impossible to work any job at all until 5 years after quitting. That's not enforceable, and with letters from HR and legal specialists I got that clause removed (and since removed from their templates as well). –  jwenting Mar 8 '11 at 6:23
    
wow... that's crazy. Hobbies generally improve your "rest" by giving you a creative outlet. That just seems overkill. On the other hand, it's common in the US to have "non-compete" agreements which basically mean you can't get trained by company A, and then go work for company B or for yourself in exactly the same field. Fortunately for me, the company is in biomedical and I want to do mobile apps. Quite different! –  Stephen Furlani Mar 8 '11 at 19:19
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