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.

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.

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.

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...

Food for thought.

A tangent, but http://www.telegraph.co.uk/finance/newsbysector/retailandcon...

There's a Primark on every high street in the UK. Someone you've seen today is probably wearing an item of clothing made in those conditions.

A company with resources could sue you for a number of bogus reasons if they wanted to be dicks.

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.

At the very least, the law is subjective:

http://khanism.org/security/legality/

Your only defense, as a small player, is not to be noticed.

This is great advice

How do you force a company to do something like that? What's in it for them to agree, especially when you're leaving?

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.

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.

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.

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.

Pissing off employees or ex-employees for no reason is generally a really stupid and risky thing for a company to do.

How does this work?

I always hear the "sue you until you run out of money" type of bullying. Why do you need to pay lots of money for a lawyer if you are in the right?

* I worked on my project at night: here is my git log

* I worked on my personal laptop

* Your business is automated cars and my side project is a T shirt sale website

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 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

Time spent preparing (four years, preparing for three different court cases in the three different circuits)

high paying job offers that fell through because of the uncertainty involved

Living under constant stress for four years straight

I wouldn't even dare to put a number on this

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.

I don't think it's any more fair than the current US system.

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.

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.

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.

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.

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).

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.

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.

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.

https://news.ycombinator.com/newsguidelines.html

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.

If I use an internal prototype they have claim.

Sorry if I wasn't clear enough before.

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).

https://en.m.wikipedia.org/wiki/Duty_of_loyalty

https://www.lexisnexis.com/uk/lexispsl/employment/document/3...

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.

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. 

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.

> a. Relate at the time of conception or reduction to practice to Company’s business, or actual or demonstrably anticipated research or development.

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.

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).

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 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.

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'm not in the habit of accepting anything anyone says at face value.

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.

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.

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.

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.

What prompted the change?

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.

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.)

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.

That will be an awkward conversation.

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.

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.

> Not related to your employer’s line of work.

there's something like "Not a project started at the job"?