You don't go to the lawyer to sue your employer. You go there to understand your legal position. This gives you leverage in negotiations.

The way you use that leverage is then explain why you feel something is not fair. In a professional context, you can explain your position in legal terms when you take a compassionate, kind stance, smile and analytically explain the situation from both sides.

It's no more different than handling a code review.

Now, two things can happen: Either your employer is amazed that you both created a new product AND can navigate business negotiations. This is good for your career (unless your employer is an idiot).

Note that creating a new product that people love increases your market worth tremendously (unless you are already at a fairly well compensated level).

Traditionally the simplest way to compensate employees has been to give them a raise. Hint - you could ask this :)

The funny thing a higher pay grade does is that suddenly management will respect you more (we pay him x dollars so he must be awesome).

Or, the second case: you find out your employers 'mr. Niceguy' culture is actually a charade to fool people working at below market rates. At which point the fate of your sideproject totally depends on the legal feedback you received. And it would be better for you to find a better employer.

There are really good books on negotiation and influence. I suggest you read them when you have the time. Examples: Cialdini, 'Influence'. Voss, 'Never split the difference'.

I wholeheartedly agree with your comment. The core is that OP created something of value, in his own time. So there should be a value exchange of some sort.

Depends entirely on the employment agreement. Many will automatically assign ownership of any code written to the employer.

Which, depending on case law in a particular jurisdiction, may or may not actually be enforceable. This is exactly why you would want to talk to a lawyer: they can tell you if you have a leg to stand on.

The employer might be under the impression that all the terms in the employment contract they pulled off FreeLegalTemplates.net are enforceable when they aren't. Going to a lawyer first gives you the ammunition to politely point out that you are in fact the one in the right here.

Which is insane, and should be illegal in a variety of different ways.

Well true, depends on circumstances and how OP and employer relate and if they can find a win-win for both. See it as an opportunity.

Unless he’s a salary employee. In that case, he’s technically always on the clock or could be argued to be so. If you want your time to yourself then stay an hourly employee.

IANAL, but it's definitely not that simple. I've worked in salaried positions and still retained ownership of my side projects. There was also one instance where I refused to sign a NCA that threatened my IP, so YMMV.

A salaried position is usually for X hours per month though. An employer that can make you work 24/7 each day of the month is not an employer, they're an owner.

This is excellent advice

In that case, have you considered getting a lawyer just for the advice and not telling anyone about it? A lawyer you hire won't go around making threats without your permission, and they can at a minimum tell you if your plan has a massive flaw you've overlooked.

The best way to not "go the legal route" is to find out what is legally open to you and what is not, and then negotiate from confidence rather than ignorance. Failing to do legal homework up front is actually an easy way to accidentally end up in court.

You are not understanding. You do not only talk to lawyers to sue people. Lawyers are the only people here who know the law and are on your side. You should not be asking HN what your options are: you should be asking your lawyer what your options are. And your lawyer, not the company's lawyer.

If you really want a to have a part of the product that you created you need to know your options/rights.

If you don't want to spend money on lawyers, at least read all relevant laws (which is important even if you have lawyer around you).

It's also better if your company doesn't know about your preparation, as it can be used as defence weapon in the negotiations only if you would get a worse position than what you have rights for anyways. Preparing in secret also helps you get more evidence for your case.

It's worth noting that your employer will probably have already spoken to a lawyer about this, or will be prepared to if you don't comply with their request.

A 30 minute session with a lawyer will give you much more insight in to how to deal with this situation more than what you can learn from an internet forum.

You still need legal advice, even if you do not wish to pursue the legal route because your position and its strength need to be established.

If you don't want to do even that then my advice to you would be to hand over the code, fork it, leave this employer and call it a day.

You really should consult with an IP lawyer, for all the reasons mentioned here.

You may have to reset your expectations about walking away with both compensation AND control.

You will have to reset all of your expectations, regardless of their combinations. OP has made some strategical errors already and it now depends on the exact writing of his employment contract and the jurisdiction they are in what options are still on the table.

Unless your employer is foolish (unlikely) they have definitely talked to a lawyer about this already.

You should do so as well, to be on the same footing. This lets you negotiate with confidence, you'll understand your BATNA and the terms of your contract with the business.