Worrying About Employment Contracts?

An anonymous reader wonders: "I was preparing to accept a software developer job at a California company and was put off by the contract which claimed ownership of any ideas I create (on my own time or at the company) during my stay at the company and required me to inform them of any ideas (related to the company or not) during my employment and for a year afterwards. I've found references to a couple of instances where this became a legal problem for the developer. Is this something to worry about?"

Sounds normal to me.

[LordNimon]

which claimed ownership of any ideas I create (on my own time or at the company) during my stay at the company and required me to inform them of any ideas (related to the company or not) during my employment and for a year afterwards.

Well, the "one year afterwards part" is a bit odd, but the rest looks like any normal employee agreement for a software job. I would just try to get that "one year afterwards" thing removed.

Contact an attorney

[un.sined]

Most contracts have language in them that is completely unenforceable. For instance, many companies have non-compete agreements, which in some states are invalid. Others claim ownership of ideas and products, even when created outside of company time, without usage of the company's resources and not even related to the company's business.

Your best bet is to contact an attorney and have the attorney review it and suggest changes. Many people don't realize that they can negotiate contracts, and that they're not just limited to negotiations on the blank spaces. The worst thing that can happen is that you'll have to keep looking for work.

Scratch it out.

[Spazmania]

Just scratch it out before signing and when you turn it in, say, "Hey, fyi, I scratched out these lines. Please tell me if that's a problem or we need to discuss it further." Nine times out of ten its a form contract and an item on a checklist. The employer doesn't care that you scratched out the lines. Did he sign the contract? Check. Next?

The tenth time you'll have to choose whether or not to walk away. As someone who has walked away, let me tell you: its a tough choice. Its also the right choice. There are plenty of jobs for a smart developer and plenty of companies who won't try to walk over you that way.

Two approaches

[Anonymous Coward]

I don't encounter this as much as I used to but there are two approaches which seem to work (depending on who you're dealing with).

Both are aimed at giving them what they're entitled to - your ideas and inventions that come from work you do for them and are related to it during the term of the contract, and keeping what they're not - everything else.

1. Large bureaucratic company.

      Very carefully scratch out words so that they keep only work related stuff, initial it, hand it back without comment. You'll never hear about it again.

2. Small/medium company

      I once explained this directly to the owner of a medium sized software consulting company I worked for once (they're still around, very well respected, and I still know the owner and our relationship is fine). I pointed out that the language in his boilerplate was far too broad:- claiming copyright over family snapshots, emails on my own private account, contributions to open source projects I dabbled in on my own time, hardware projects I undertake as a hobby, musical performances and compositions I make on the weekends in jam sessions and so on, none of which was of any possible interest to him.

      I went on to say he could have everything that was his, and was not at all interested in harming his rights to it, and had no interest in taking it from him.

      I suggested we restrict the language to inventions blah, blah "arising out of or related to the work" involved in the contract. He agreed on the spot and changed the words himself.

IANAL but I believed this is called "equity" aka fairness.

Re:California law

[queequeg1]

Before relying on this CA Code section (which, by the way, is pretty awesome for your purposes if it applies), you should check the contract for a governing law provision. Typically near the end of the contract with a bunch of other boilerplate provisions, the governing law provision might specify a state other than CA (especially if the employer is a larger national company with central headquarters located in a different state). If the contract specifies a different state, the employer may use an enforcement strategy that could possibly negate the benefits offered by this code section. Specifically, the employer could bring a claim in the courts of that other state, get a judgment, and then have the judgment enforced in CA (based on the full faith and credit provisions of the US Constitution). I don't believe this issue has been tested in court yet. If you become the test case, you've already lost (because the issue will cost huge dollars to litigate).

If there is no governing law provision in the contract, the foregoing problem still may potentially exist, although you would have a good argument that CA law should govern the contract since that is where you live, work, and where the company's local office is. Further, if the company is headquartered in CA, in the absence of a governing law provision, I don't see how they could argue that the laws of another state apply.

Re:Yes.

[NormalVisual]

You've never had to face the option of becoming homeless to stand up for your pretty rhetoric.

It's not just "pretty rhetoric" when you're talking about an agreement that can legally bind you to something that could cost you a *lot* of money and remove any real legal recourse. I truly mean no offense or disrespect, but it's foolish to relocate for a job without knowing exactly what the terms of the contract are - I've known plenty of H1B's that have gotten snared by that, incidentally. If a potential employer doesn't want to be completely transparent in regards to the legal agreements beforehand or if they have unreasonable demands in the contract that they won't budge on, I don't contemplate working for that employer any longer. That's not being up on a mountaintop - it's just common sense and having enough respect for yourself and your abilities to not sell yourself short.

I've had to go to the mat regarding contract changes, and been told the same thing you were - "it's a company-wide contract, no exceptions". If they really want you, they'll change the document. If not, there's no shame in temporarily adjusting your standard of living and working a temp job in a warehouse or something until you find something acceptable.