I work full-time as a software developer at a mid-sized company. I want to start a small side business (not competing with my employer). My employment contract has a non-compete and a section about intellectual property. I'm not planning to leave, but I'm worried about legal trouble. Has anyone dealt with this? I don't want to ask HR yet because it might raise flags.
Employment Law
Does my employment contract prevent me from starting a company?
Not a lawyer, but I went through something similar. The key is usually whether your side work is in the same industry as your employer. If it's unrelated and you do it on your own time, many non-competes won't apply. But IP clauses can be tricky, especially if they claim rights to anything you create while employed. Read the exact wording.
You should really get a lawyer to look over the contract. Paying for one hour of legal advice is much cheaper than a lawsuit. I wouldn't rely on forum advice for this.
What state are you in? That makes a big difference. Some states are very strict about non-competes, others less so.
I'm in the US, Midwest. I know I should talk to a lawyer, just trying to get a sense of what to expect first. The IP clause says 'any work related to the company's business' but it's vague.
That vagueness is exactly why you need a professional. 'Related to the company's business' could be interpreted broadly. I've seen people get burned by that. Keep good records of what you work on and when.
If it's truly a side business and not competing, most employers don't care unless it affects your performance. But the IP part is the real risk. Do you plan to use any company resources or time? Even a laptop could be an issue.
Also check if there's a moonlighting policy in your employee handbook. Sometimes that's separate from the contract and has its own rules.
I'm not sure moonlighting policies are legally binding in the same way, but they can still be used as grounds for termination. Better safe than sorry.
No employee handbook, it's a smaller company. My contract is just a few pages. I'll look for a local lawyer who specializes in employment law. Thanks for the input so far.
One thing to consider: if you start an LLC or corporation, your name might be searchable. Some employers do periodic checks. Not trying to scare you, but it's a reality.
That's a good point. I've heard of people using a registered agent to keep their name off public records for that reason.
Also, be careful about using your personal GitHub or portfolio to promote your side business if your employer follows you. Even innocuous posts can raise questions.
Honestly, the safest route is to talk to a lawyer before you register anything or write any code for the business. The IP clause could potentially claim ownership of your side project's code if it's deemed related. Get clarity fidst.
And keep a clear separation between your day job and side work. Use different devices, different acounts, different times. Document everything. If a dispute ever comes up, you'll want that paper trail.
I'd also check if your contract has a 'prior inventions' section. That can sometimes protect things you created before you started the job, but it might not cover new stuff.