My Ideas, My Boss’s Property
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We are fortunate enough that even the most mediocre among us can hold out for the next employer that doesn't demand this kind of control over you, or start your own company. I don't give a shit what a company says about their culture of work/life balance or whatever. If I see blanket IP clauses unrelated to non-compete, or like arbitration clauses that remove us from civil courts should a problem arise, I'm whistling on my way out the door.
I once saw a contract that stated I couldn't work in the field for TWO YEARS after terminating. Not just large machine equipment, but ANY mobile/web applications, related to integration with embedded systems or not. Yeah no thanks.
Your mind should be available for rent for $100k/year or whatever your market rate is these days but not for sale at that price. Sorry but I'm a Human as a Service. If you want to own me, you'll have to come to a better valuation.
I just know that I've refused to sign more than once. Do you think, especially in Silicon Valley, that the employer not only wants to lose the employee but be bad mouthed about restrictive agreements online where it's likely they will lose even more battles in the recruiting wars?
I worked as a contractor for a very large defense company. After a year, they offered me full time employment. I specifically asked if there was a "we own everything you make" clause in the employment agreement, but I was assured there was not. I went through about five digital form contracts, and when I got to the last one, it had the clause in there. I told the woman that I wanted to amend the contract and she huffed and told me they don't do that. I replied that I was promised that I would not have to agree to such a clause, and she told me that it was mandatory, so I could take it or leave it. I asked if there was anyone in HR I could talk to about this, and was told no. So I stood up and said "please escort me out the door, starting immediately I am resigning. At the gate, I would like the security guard to search my things." (it was a secured facility, and I didn't want anyone to claim I was stealing anything later.) She asked me if I was serious, and I said yes. I was berated for how much time and money was wasted on getting me ready for employment, and I replied I was promised repeatedly that I would not have to sign away my rights, and this was absolutely a deal breaker and I didn't appreciate being told repeatedly this would be honored until the very last minute. So really, my time was being wasted too. This really, really didn't go over well. My heart was beating like crazy the entire time. My former boss was furious, the HR person was furious. The security guard was cool about it though.
This may just be crotchety old man talk, but sometimes I wonder if the extremely protective child-rearing (particularly in schools) that seems to be abundant today will make future adults particularly susceptible to this kind of bullying.
If you never have to deal with this kind of social stress as a child, how can you possibly deal with it as an adult?
Perhaps getting bossed around on the playground is a good way to train the mind to appropriately deal with intimidation from employers, salesmen, etc.
having the balls or wisdom to walk away from a situation where you're being bullied, whether literally or figuratively, is becoming rarer nowadays.
I disagree. Most kids have experienced that, and in older times quite more than today with over-protection.
Unless we're talking of extreme situations (which we were not), it helps to build defenses against these kind of things and be more vigilant and aware of other's tactics.
Some kind of "toughening" kids up with adverse situation (as opposed to over-protecting them) has been part of human culture for milenia, from Sparta to Native American tribes.
Perhaps you should not make such unfounded assumptions. It would also behoove you to refrain from such overt ad hominem argument.
Do you think I was never a child? I speak from experience, not conjecture. I can't say the same for your vitriolic response.
As a child, I went through many situations that were very stressful for me at the time, but ultimately helped to construct a number of helpful psychological responses to aggression. Those responses are very useful in the real world. Contrary to what teachers may have you believe, bullying does not end in school. It simply becomes more subtle.
One of my young child's (c.5-6 at the time) teachers made their claimed authority explicit in demanding that they be obeyed "first time every time" without the chance to question or consider what they were being asked - that's a bit too close to demanding mindlessness for my liking, terribly arrogant too.
I take the fact that you reduced OP's statement
> Not everyone has the will, nor the financial wherewithal, to do such a thing.
to
>Not everyone has the will... to do such a thing.
as an indication that you think economics plays a secondary role in this story. I disagree and I'd like to know why you think that's the case.
I wonder how much of the structure of the school system is bullying, or built around encouraging it.
Vicious unthinking rules applied more for the administration and teacher's benefit than anything else. An environment where you're deprived of meaningful achievement and put under continual stress for largely meaningless exams....
When kids have so little influence in the nature of their environment, teachers are running a stupid rule book, and where 'accomplishment' is so meaningless with respect to what's personally fulfilling, is it really going to be surprising if people grow up without much confidence?
After all, what opportunity would they have had to exercise it?
Teaching children to respect authority figures will make them susceptible to this kind of bullying.
Exposing children to physical assault is not going to be any help whatsoever during future contract negotiations. Probably it will be a hindrance, in fact.
They do this to you because they hold all the cards. I was just lucky that I didn't need them.
They could cripple you if they wanted to.
To be honest there's not much difference between this an slavery and when signing is the difference between putting food on the table or starving everybody is a slave.
Of course you could always not sign but not everyone has the luxury to do that i would argue most people don't.
Thanks for the entertaining story! And sorry to hear of your mental anguish.
Unlike in credit situations there is no equivalent of the Fair Credit Act covering employment contracts. Many employers exploit that by writing some very crafty wording which reads one way but on close inspection says the opposite.
That's great this year. When the bubble pops - as it surely will, and if you think otherwise you're as bad as the cretins who were writing about all the rules changing forever in 2000 - things will be different. The time to press for change is when times are good and when you have leverage.
If I pay for a car, I'm paying for a product. If I pay someone to clean my garden, I'm buying his time, expertise etc. for the time to clean my garden. I look at me being paid at work the same way. I'm paid to work for 'n' hrs a day, 'm' days a week per year for cost 'x'. I provide you service and I get paid in return. What I do after work, as long as I don't infringe on any IP from work, is my business.
A 2 year non-compete covering the entire industry I work in? That's not even halfway reasonable. You're actively trying to fuck me over.
I don't care that it's not enforceable. You're still trying to fuck me over.
I don't care that you're willing to compromise on that clause when I argue. You're still trying to fuck me over.
This is not going to be a productive relationship even if I do get you to remove that clause because you started out trying to fuck me over.
Every employer who attempts this kind of bullshit is a cancer upon this industry. They are preying upon people's tendencies to assume honesty and good faith.
A reasonable clause to put in is a 6 month non-compete in the very specific industry covering maybe two or three companies. That would be a good starting point for negotiations.
I've accepted jobs where they tried to pull this kind of bullshit on me right out of the gate. I used to think I was smart getting them to slice the contract up and make it reasonable like you suggested.
Maybe it was, but it still would have been smarter to never have taken the job in the first place. Those people made terrible employers and are best just avoided.
In business, a lot of people like to play hardball. Doesn't mean they’re all assholes. Taking them on and negotiating mutually agreeable terms can be a good outcome in itself. It’s a very useful skill to have.
Playing negotiation hardball with somebody who is potentially reliant upon you to put a roof over their head and food on the table makes you an asshole. Let's stop pretending that it doesn't.
It's entirely different to negotiating a 20 million dollar exit.
If I'm going to be paid a LOT of money I might consider some of these terms (> $250k), but generally I find anyway that the more the employer pays you the more reasonable they tend to be.
I have drawn lines through the objectionable parts of employment agreements, initialed my changes, and then sat patiently while the HR people freak out. It has usually worked out happily for all concerned, not counting the people who think the employment agreement is a gift from their god and must not be altered by mere mortals. When those people have enough power to reject my rejection, I'm happy to walk. But it's important to verify that they have that power, IMHO.
The exception you're describing is where the employer is hopelessly naive and unknowingly signed and gave me a contract they didn't read with horrendous terms, and they're very apologetic when I ask them to amend it.
Well, that actually happened to me once.
I thought everything was fine when the terms were amended, but the guy who hired me was still hopelessly naive.
That ended up SERIOUSLY coming back to bite me in the ass as he ran out of money, panicked, hid himself and didn't tell anybody what happened. Eventually he told me that he ended up not paying me because he couldn't.
He was a nice guy and he plainly felt awful, but that wasn't much consolation to my bank account.
So yeah, the when there's a possibility you're negotiating with somebody who is either hopelessly naive or evil, I don't really care which they are. I don't want to work for them either way and neither should you.
In general the ones who intentionally put the clauses in weren't necessarily the most awful places to work in the world, but none of them were job opportunities of the lifetime, and I wouldn't have felt bad passing any of them up.
Interestingly, here the legislagtion allows this kind of clauses only if you're receiving a "significant part" of your original pay from that company until the end of that period. Also, they have 2 weeks time after you quit to decide if they'll enforce it or not and the clause has to be written into the contract from the start of your employment.
Which is actually way more reasonable that some contracts I've seen from the US-based companies.
The employee employer relsionship is very one sided
How do they know you did it at home, not during work hours? How do they know it didn't affect your work? If you're salaried, there aren't set start/stop times. How do they know they weren't paying you at the time you came up with the idea, or thought through a problem? Did you do it on a work laptop? Did you use a copy of Photoshop that work paid for? Is it something you did for your job, and now you want to sell it to other people -- even if the code has been rewritten?
Again, I don't think it's very enforceable or even a good idea. However, I can understand why a lawyer would slip it in.
The problem though is company's like IBM cover so many areas that things get vary fuzzy.
Organizations tend toward pessimism because people respond more strongly to shame, insult, and embarrassment (of themselves and others) than to victory, pride, altruism, and shared glory. They turn toward a certain paranoia. That's why there's so much HR literature on how to conduct "low performer" witch hunts (get those time thieves!) while companies don't do the least thing to support high performers (except offer them more money when they seem likely to leave).
Ultimately, most things controlled by humans devolve into feudalistic, dysfunctional reputation economies in which the trade of social credibility becomes the only thing that matters, and the organization's original purpose is either forgotten, ignored, or half-assed. There are counterexamples and exceptions and processes that prevent this, but they're uncommon. Most companies have much fear of the humiliation of "that guy" stealing time to launch his own career, and only a slight background hum (if even that, as sometimes it's dead silence) of fear for the real existential threats: crumbling morale, widespread distrust, and the death of innovation.
My understanding is the exact opposite [1]. At least that what we were often taught in our teacher prep classes. I know that other research indicates that people are more loss averse than gain seeking [2], but I'm not sure that indicates that a pessimistic environment is actually productive in the long-run. I think that may be your point though, in your second paragraph.
[1] http://www.psychologytoday.com/blog/family-affair/200809/rew... (applying to children)
[2] http://www.inc.com/magazine/201304/issie-lapowsky/get-more-d...
He is saying that more people on average will respond more directly and immediately to punishment than reinforcement.
The context is that organizations' behavior influence via punishment is a short-term tactic: in the long run, we would like to believe that reinforcement poses a net gain. However cultural influence results in short-term behavior control tactics from organizations prevailing, and little heed paid to the tradeoff.
One might also argue that it is cheaper in the short term to punish than to reward, and this further perpetuates the downward cycle as a staple of organization culture.
People who have a positive self-image respond more strongly to victory, pride, and altruism, because it resonates with how they see the world. If someone tries to shame or insult them, they remove themselves from that person's presence, or shrug off the insult by recognizing that other person as trying to discharge his own emotional hurt on other people.
The interesting thing is that both worldviews are self-reinforcing. The latter kind of people typically refuse to work with the first, because why would you put yourself in a position where you're listening to someone who only understands shame, insult, and embarrassment? As a result, positive people tend to work only with other positive people, and negative people tend to work with only other negative people (this usually manifests itself as scheming and backbiting, as few folks have the courage and social-ineptness to be negative to one's face). Their worlds and experiences become congruent with their worldviews, which just confirms the worldviews in the first place. That's why psychologists often say that negative fears often cause themselves to come true: they make you act in a way that pushes away positive experiences and attunes you to negative ones.
It is possible to shift between worldviews, but this is often psychologically traumatic for the person involved and involves some sense of crisis. Going from negative to positive, the catalyst is often psychotherapy, a strong mentor, or having a core value (like a child's well-being) threatened. Going from positive to negative, the catalyst is often economic, being trapped with a bad boss or in a bad relationship because you lack the means to leave. Teachers and parents are taught to focus on positive emotions because they effectively are the ones to start the cycle off, and children are trapped in their care. It's not really that children innately respond better to one or another, it's that the way you treat them primes them for what sort of reinforcement they will accept later on in life, and so if you want children who naturally respond to and offer positive reinforcement, you should model that early on.
No, that's because a company is trying to reduce its expenditures. If a high performer isn't leaving, the company sees no evidence of any advantage in paying them more.
I agree. So don't work there.
Concerning the property of the tooling: if I bring my personal stapler to work, it's enough to taint everything I staple as my own property? how do we decide the property of the company paper I stapled with my staples? You can say it's reputed being the company property because you're on work time in company premises, but the whole principle of reputation is that you can bring a proof against (the stapled paper is your house insurance contract for example).
The way I understand it those clauses are written to prevent the kind of situation where you have a problem at work, can't solve it, go home, solve it, then offer to license it to your employer the following day for a reasonable charge.
And if an employ doesn't do any work at work and just does this sort of thing: fire them, then hire them as a consultant. The business just lost most of the tax burden of supporting an employee, e.g. pay roll taxes, insurance, etc. And the employee just got even more intensives to work the way they were before.
I really don't get Americans. Capitalism is good everywhere, but not in the workplace where we need to treat everyone like the dirty peasant they are.
I think the real problem is if the company was sharing in the profits of the invention, and companies took care of workers as they did back in the day, this would not be nearly the point of contention it is.
My father's company pays you for getting a patent, then pays you a percentage for their profits related to that patent, I dont know how they do the math, and it is likely favorable, but the rub is that there is tangible benefits to you for inventing things, oh wow!
When someone invests in your creativity, they are entitled to the agreed returns. You are free to find funding on other terms elsewhere.
In most states, the answer is "yes, it probably does". It varies from state to state, of course, and the definition of "completely unrelated". In the nicer states, it's about what is related to your employers business, or the demonstrable/anticipated research and development of your employer. Most engineers get this very wrong, or have no idea about all the things their company does.
The only common country i'm aware of in which the answer is definitely "no, it belongs to you", is switzerland.
As for legal battles, plenty. Most of the time, the company wins. I'd say 70-30.
Usually because most companies are willing to come to arrangements to avoid litigation, so when they don't, it's often something egregious (one way or the other, be it company trying to claim something they shouldn't, or employee trying to sell something employer should definitely own).
California does not, and does not say what most engineers think it does.
It says companies can own inventions that:
(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer.
#1 is read fairly broadly. Most think it just says #2.
(citing myself:)
Don't think, that in Germany the situation is that much better. We might not have those agreements in the contracts, since in Germany there are (luckily) many regulations what can be put into contracts. But the German law has also some specialties: For example, when you make an invention in your free time, even when it has nothing to do with your current job, you must first ask your employer, if he wants to buy the invention, if you want or not.
(3) Eine Verpflichtung zur Mitteilung freier Erfindungen besteht nicht, wenn die Erfindung offensichtlich im Arbeitsbereich des Betriebes des Arbeitgebers nicht verwendbar ist.
The law also stipulates that for any invention or major improvement, even for the ones that you do during your work time that your employer wishes to keep the rights for, you're entitled to a fair compensation. So yes, if you invent something that is related to your employers business, the employer gets the first right. But I do think that the situation is much better - you at least get compensation.
How could one say, that something is "offensichtlich" (apparently) not usable in the business of the company. With any bigger company and when you take the software business and you program something for your own, you are caught. Which type of software related invention would "apparently" not be usable for (e.g.) Microsoft?
I have also spoken with German lawyers about that topic and what they told me, was not so rosy.
What is meant by "fair" compensation? I doubt very much, that this is regulated in detail and in effect the compensation will be what your employer says. For employee-inventions you also get some compensation ... and that should be fair too, I guess? But it is not, what I know. The compensation that regularly is given to the inventors inside a company get a fraction of the patent filing costs (in the US and also counting lawyer costs). I doubt that that could be counted as "fair", when the lawyers get more from the invention than the inventors.
Plenty of people have done it, but likely not acceptable from an HR perspective.
"2870. (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable."
Of course, if you have any specific questions you'd want to talk to a lawyer to make sure you were interpreting it correctly for your situation.
Washington State: http://apps.leg.wa.gov/rcw/default.aspx?cite=49.44.140
I found myself in this situation too, but after an investigation the company was not significantly interested in my work enough to pursue it further.
Edit: I should add that plenty of groups within our company, while officially bound to the same agreement, were unofficially free to do similar work without consequence. Our group suffered from a leader who wanted to do things "by the book".
Of course this sucks that you can't do it stealthily, but you usually can get a carve-out. IANAL though.
Its sort of like 'copyleft' except it sucks into Google anything you touch, and use at least once at work.
And always be dubious when the company lawyer says, "Well that is what it says but that isn't what is meant by that clause." Because in a court of law, what it says counts.
Verbal employment contracts are enforceable in in all 50 states.
When you have a written contract, any and all verbal contracts or amendments mean absolutely nothing. It's called the "four corners doctrine" and is a pretty universal judicial practice. Written contracts always, ALWAYS supersede any verbal agreements: with a written contract in hand, any mentions of oral discussions are irrelevant and will fall on deaf ears.
FWIW the Wikipedia definition, http://en.wikipedia.org/wiki/Four_corners_%28law%29, contrasts sharply with your use and doesn't really seem to speak at all to overwriting of terms by further contracts.
Yes, if A and B walk into court and say that the verbal contract exists, it is enforceable. But in the common case, A will deny that the contract existed (or disagree on the terms) AMD without any evidence, the contract is lost.
Now if there is evidence (both sides had taken specific actions obviously in accordance with the verbal contrac, that they otherwise would have no reason to do), ther might be a case. But really, without evidence, the abstract rule will not connecg to concrete instances. Get evidence for everything.
"In 2004 a court in Texas ordered a former Alcatel employee to give his former employer a software algorithm — which existed entirely in his mind. The idea, which he was still working on and was still too abstract and incomplete to be a patentable invention, was nevertheless deemed the property of Alcatel, forcing the ex-employee to turn over the algorithm in the months after he was fired."
Judges in Texas are generally elected, and so you get all the same kinds of electoral corruption that you have anytime a politician raises campaign funds.
Am I reading this incorrectly? Are they promoting the idea that Steve Jobs is an individual inventor?
While he didn't invent all that stuff himself, it's not like he had nothing to do with any of it.
The important thing is to actually read and understand the agreements that employers expect you to sign.
Some examples of what would catch my attention:
* Restricting what activities you can't do on your own time, even when there's no harm to the company.
* Playing games with definitions (especially key terms like "Invention") and loose language (like "related").
* Requiring unnecessarily high burden of proof, for example advance description of all IP that you have created and want to exclude from assigning to the employer.
If you see something you don't like, negotiate changes. If the employer won't work with you to make an acceptable agreement, then don't sign.
Edited for clarity
Ideas are (naturally) belonging to the person who had the ideal. "Intellectual property" in contrast is "owned" to those that have enough money to buy it.
This notion of making more and more parts of human life own-able and thus putting a price tag on it, is just devaluating these parts and our own living.
In result, we will be slaves of the big corporations and the billionaires of the world.
That way you can exponentially create useless people.
Even if you get rid of these ... Than you have a good idea, only to find, that your idea violates dozens of corporate patents ... and your idea is waste.
Thus the dream is just a shadow of the past ... and propaganda for a system that does not hold its promises any more.
* When I need to work on something, I think of the library I wish existed to get it done. Anything I need that is employer-specific should be configurable
* I make the library and release it with an MIT license
* I then use that library to accomplish my goal
This has the benefit of usually making me write better software. And it motivates me to make the open code better quality and better documented. This means the work is more valuable even to my colleagues that also eventually need to work with it.
This might get you into trouble. Basically, anything you touch during your work hours is tainted by your employers copyrights. You're not allowed to decide which license that code should be under. So either you write that whole library in your spare time (and on top of that do your regular day job) or get your employers permission to release the code.
In general the approach is sound and I'd support it, but others might or might not.
The line is difficult to draw precisely with legal language, so companies err on the side which protects them best (hoping employees will sign anyway, given they've already gone through the interview process and are likely to have similar terms at other employers).
That type of shit happens all the time, and while that is an extreme example, there are all kinds of examples like a programmer getting paid to work on a billing system writes a childrens game for which the company claims ownership over... etc etc etc.
The idea that just because your employed means you should give up any and all rights to your brain is ridiculous...
There has to be a happy median there somewhere
Source?
That is the thing with these cases, 90% of the time the result is exactly like the post here earlier today, the former employer makes demands that the employee cease and desist distributing "their" work and the employee having little resources gives in, it never makes it to court.
Where it gets trickier is if you work as a devloper and they go after waht you have done in the evenings
It was an other situation, but a lawyer once told me, what happens when such things go to court: The corporation will bring 10 witnesses against you and will bring 10 experts certifying what the corporation needs.
And than you will be very alone and be gracious to get even a little money. You will loose your job anyway.
In general, german courts are quite employee friendly, so seriously, your employer would probably be at least as afraid to go to court as you'd be. Maybe not if it's a litigation-happy megacorp, but the bulk of german companies is medium-sized (Mittelstand) and they tend to shy away from court cases.
a) You have to do that if you intend to charge money for the invention during the time of your contract. You can quit and then start using your invention. Just don't do it while your contract is running (this avoids you building a competition to your employer). b) The employer has to immediately patent or copyright the work and give you a compensation for licensing it.
This is really rather a forced license contract.
Actually, go read the law (ArbnErfG, § 18 Mitteilungspflicht, Satz (3)) says otherwise:
(3) Eine Verpflichtung zur Mitteilung freier Erfindungen besteht nicht, wenn die Erfindung offensichtlich im Arbeitsbereich des Betriebes des Arbeitgebers nicht verwendbar ist.
You only have to ask your employer if the invention was made in the course of your work (during work time) or part of the employers business. Totally unrelated inventions made in your free time are _not_ covered by the law.
(Has anyone come up with a phone / camera that does automatic tagging based on GPS location? Your phone knows you are in front of some famous landmark, and tags the photos with the name. I assume it has been done by now, but this was when the first phones were starting to incorporate GPS and it seemed like a novel idea).
There was also a two-year non-compete clause that forbid me from working with any of their direct competitors afterwards.
I signed the contract because I wanted to do the work, and because I knew that all the other places would have me sign the same contract. I also thought that this company was the most progressive of the group. Finally, I wanted my ideas to be funded, and so in exchange for the time and the resources that they promised to put towards my work, I would provide them with the ideas. We were both taking risks to achieve a greater goal together.
In the end, they reneged on their side of the bargain and didn't provide the necessary funding to complete the production and testing that the product design needed. After trying to get the work done myself in-house by funneling time and energy away from other projects towards mine, it came to a head and it was acknowledged that they weren't going to fund the work and that we needed to part ways.
On the day that decision was made, I was escorted out, leaving everything behind, my notebooks, and all my digital research files.
Several years later, when they won a large contract for work that was in the area that I was working on, my manager took me out for lunch and said that I had just been about 5 years ahead of the curve, and that they hadn't had the resources to carry that type of research and development that far ahead of a clear billable opportunity.
When I asked him about the files and the notebooks, he said that nothing ever happened to them, they were all just filed away in the archives.
I left understanding their situation well. It's hard to fund something when it's not clear when the payoff will materialize, and when it did materialize, they were able to get there first anyways. So the loss of five years in R&D wasn't noticed, by them, their clients, or the industry.
The lesson that I did learn was - back up your files offsite, and have duplicate notebooks, one that is your private notebook and one that is your office notebook. Because when you sign a contract like this, you have to be prepared to leave everything onsite when it ends.
The irony with the 2 year non-compete is that after I left, non of the other firms were interested in even discussing the work that I had done. Which is why these guys were the only ones that I could have worked with in the first place, and it's why they were the only ones able to secure the contracts when the need for the technology finally arrived.
And there wasn't much I could do with the technology myself, since it was untested and unproved and I couldn't fund the research myself. So the non-compete clause didn't impact me much either.
Perhaps this sheds some light on why the contracts exist and why people like me sign them.
I'd like to go back and have this reversed. What is the best course of action? Write a letter saying that what I create on my own time is my property, and have the CEO or HR Manager sign it?
Get a carve-out agreed. You should be able to reasonably work that out by indicating you're working on X, in your own time, on your own equipment. X belongs to you and not the company. X is not in competition with the company.
Most places will grant that with little fuss.
Employers owning employees ideas "related" to thier employment has been the case for a very long time.
this machine is mine; what you manufacture with it is mine -- industrialization
the ideas you come up with are mine; that idea is mine - ??
Edit: I understand the law doesn't think they are bunk. This is my person opinion about them and why they should be bunk.
The restricted shares are granted under contractor agreements. Performing to those agreements qualifies the restrictions on the shares to be lifted, in effect vesting the the shares.
In order for the corporation to demonstrate that it has legal ownership of everything the engineers have created, the contractor agreement they sign is very explicit and verbose [1] about their informed decision to turn over ownership of that IP to the company, and that the ownership they are being given in the company is compensation for the intellectual property they produce. The language specifically carves out -relevance- to the startup: "... that are related to the business (present or future) of the Company or its affiliates...".
None of them have any qualm about this, and fully understand the purpose and value of turning over their creative fruits to the company.
I'd expect that this principle has to persist regardless of the size of the company. The key to making it work is that the employee/inventor willfully signs up to the legal restrictions the company places on them as payment for their work and compensation for their creativity. I can easily imagine that corporate attorneys who work to protect their employer's interests would push the lines of what constitutes the scope of the company's claim over their work. I'd guess that for every term that seems intrusive or abusive, there is a precedent case somewhere that corporations can point to as justification for it.
In the case of my startup, the language is specific that the invention is made in the course of building the company, not from other unrelated activities.
[1] INVENTIONS. (a) Disclosure. I will promptly disclose In writing to the Company all discoveries, developments, designs, ideas, improvements, inventions, formulas, processes, techniques, know-how, and data (whether or not patentable or registerable under copyright or similar statutes) made, conceived, reduced to practice, or learned by me (either alone or jointly with others) during the term of the Independent Contractor Agreement between the Company and me and within 12 months thereafter (unless any such disclosure Is prohibited by the terms of a commercially reasonable non-disclosure agreement signed by me that Is meant to protect the trade secrets and confidentiality of an employer subsequently employing me), that are related to the business (present or future) of the Company or its affiliates, or which result from tasks assigned to me by the Company, or from the use of facilities or equipment owned, leased, or otherwise used by the Company or Its affiliates (all of the foregoing are referred to in this Agreement as "Inventions"). (b) Assignment of Inventions. I acknowledge and agree that all Inventions belong to and shall be the sole property of the Company, subject to the provisions of this Agreement. I hereby assign to the Company all rights, title, and interest I may have or may acquire in and to all inventions. Both during and after the term of the Independent Contractor Agreement between the Company and me, and from time to time, I agree, promptly upon the request of the Company, to sign and deliver to the Company such other documents as the Company considers desirable to evidence the assignment to the Company of all rights I may have, if any, in any Inventions and the Company's ownership of such Inventions.
> I will promptly disclose In writing to the Company all discoveries, developments, designs, ideas ...yada yada... made, conceived, reduced to practice, or learned by me (either alone or jointly with others) during the term of the Independent Contractor Agreement between the Company and me and within 12 months thereafter....
Let's I work for you, then quit -- or you fire me. Eleven months later, I'm taking a shower, and have an idea related to your business. I am supposed to disclose that to you, and you own it. Do I understand that correctly?
Edit: I wasn't the person who downvoted you. I'm genuinely asking.
If they conceived the idea during the term of the contract and the company pursued a patent, they are committing to continue supporting the company's efforts even if they leave before the patent is granted. It costs a lot of money to patent an idea and that would go to waste if the inventor did not provide that assistance.
For any other purpose, I doubt the scenario you presented would be enforceable, particularly in California.
[edit] FWIW, I would have stricken the wording that implied the company owned any new ideas post-employment if the engineer said it was a concern to them. I do want them to support the patent activities, but once I stop paying them, their ideas belong to whoever they sign up to next, if anyone. None of them so far have taken issue with the 12 months.
Important acquisitions can be sunk because of a failure to adequately cover IP. In that case, sloppy paperwork can mean a very real loss to many people who have worked hard. From that point of view, it's far more important for an employer to cover it well and explain why.
It only takes the employment of one single contractor through odesk that wasn't signed up properly to jeopardise an important deal. Employees signing up for that need to understand why this is important.
You should check with a lawyer as well.
My take on it, anything done / written during 'office-hour' will be deemed company property.
The problem is that employers, and almost all of them are this way, are do damn short-sighted. They'll pinch pennies on benefits, lay people off for the slightest reason or no reason, and burn hours of time on psychotic, all-consuming performance review systems, while missing the fucking point, which is: the real existential risk is when innovation stops. None of that other shit really matters.
An employee "stealing an idea", except in spy work, is a minor insult at worst. As far as I'm concerned, it's the responsibility of the company to provide conditions that are good enough (e.g. job stability, resources) that people would rather stay than "steal" their ideas off to elsewhere. If they can't or don't, then I have no sympathy.
The problem is that professional management culture rewards the mindless, minuscule cost-cutting that is often just externalizing costs to the future. That's where we get companies that put these onerous clauses in place, failing to realize that their pulling that kind of shit is killing the energy they'd need if they wanted true innovation.
If a company wants to excel-- instead of simply being a scam through which management robs investors (of their money) and employees (of their time and careers)-- it needs to give its people support, autonomy, and trust. Yes, a few people will "steal" from the company (by which I mean abusing that autonomy) but most won't have that inclination in the slightest, and more money will be made on the latter (by orders of magnitude) than is lost on the former.
What if people got nontrivial amounts of stock for their inventions, instead of the couple grand or pat on the back most companies dole out? Would that help reinvigorate the hard tech industry, which is losing people [1] to creating the next Instagram-meets-Yelp-but-for-kittens?
[1] http://www.nytimes.com/2014/03/16/magazine/silicon-valleys-y...
I'm not saying that such people should be "owned". That's pretty reprehensible. I'm saying that they don't require an amount of autonomy incompatible with the standard employment context.
Ethics is a two way street. I shouldn't own every thought that comes into your head as an employee, but if you're dickish enough to think "pay me while I build a business at your expense and on your time" is a business plan, then I don't have a problem making that attitude painful.