"So... to answer your question. There is unlikely to be substantial difference between the contracts that you sign at various companies in the US working as a programmer or in the law that applies."
Joel's main point is that, even with CA's labor code, it can still come down to a gray area around what a company's "business" is.
What I think the OP is pointing out is that in NY a company is able to set up a more restrictive contract than a company. At the very least (and from personal experience), companies in NY can introduce more gray areas in the contract (making it more difficult for entrepreneurs to feel safe in working on weekend projects) while still making it seem as if they follow the spirit of the CA labor code.
At my company in NYC (Intent Media) the founders specifically spent time writing a clause into our standard employment agreement granting everyone the rights to their side projects.
I'm not sure how common this is, but it seems like something that everyone should look at before signing on with a company, especially with the battle for talent that's going on right now.
It's a show of good faith but they would have no claim to your side projects anyway (unless you produced a direct competing product that they could reasonably demonstrate you had stolen from them).
At least that's my view of it. If anyone has an example of some programmer having his side project legally taken (i.e. a judge made him hand it over. Getting intimidated into handing it over outside of court doesn't count) by a company I'd love to see it.
It's easy to brush off intimidation when you forget that fighting it often involves a huge investment in legal fees that few individuals have the resources to spend in a battle with a large corporation. Especially when the law probably isn't on your side and you signed a contract giving away your IP anyway.
How about analyzing the situation for what it is: failing to protect independent innovation may result in less independent innovation. All the legal speculation and contract theorizing in the world will do no good if the facts of the matter tell a different story.
My point about intimidation was that if it is used then it still isn't proven that the case would hold water. You can't sign yourself into literal slavery, you can only be tricked into giving up rights that you have.
I think its not really about the law - most startups don't even realize it exists. Its much more about the culture. Investors in the Valley have had phenomenal success for some time directly investing in start-ups and firms are willing to take a bet that they will invest in the next big thing. NYC firms aren't as accessible, and even the big events (Disrupt) tend to be Valley based. Also NYC has a talent issue (although I think this is changing), for a very long-time NYC start-ups had to compete with banks to get tech talent and there isn't a huge pool of schools feeding into the city. Finally NYC is expensive, so its harder to get a "garage" to work from and 2K a month is tough to live on.
That said a lot of these issues are being resolved, and I see both founders and investors making a very big dent this time around particularly with mobile start-ups.
I built a hack during the hackathon at Disrupt and was shocked to see that even though we were in New York, there were very similar traffic numbers from California (Disrupt was using an ISP in New Jersey so I am summing NY and NJ).
I think the OP's point is not that startups need this, but that people working 9-5 in a cubical farm in CA have a chance at starting a side business and eventually growing it into a startup, whereas in NY they have less protection for that sort of work.
No one is going to ask, before the first day on the job, for that kind of alteration to the standard employment contract. They're very likely to lose the offer. Talking about side projects before the first week of work is not a good career move, especially if you're young (22-24) and have no leverage at all.
Add to this that the side project problem isn't relevant for many people, and people can't predict 5-10 years out whether it will be relevant to them. How many 22-year-olds expect to write a $20,000/month iPhone app, some time in the future, and aren't already trying to do it? Also, if you do a side project on your own equipment and time, most of the time you can hide the fact that much of the work occurred while under a surrender-all; if nothing else, just rewrite the code outright after you leave, since the code will be better and take much less time to write on a second write. This means, from a practical standpoint, that most people don't worry about this situation until/unless they end up in the 0.1% it actually affects and it's too late. This law is only relevant to extreme edge cases; for the rest, it merely makes a statement about the meaning of employment, and in the New York case, it makes a disgusting one.
You can definitely get away with this if you steadfastedly request a change to the contract that says that work done outside of the office is your own. There's a war for talent going on... developers have plenty of leverage.
You do have to push hard though, its extra legal work for them and so they'll deter you mainly for that reason.
This presumes you're desperate for work, those that get stuff done have no problem, they approach the business forthrightly and tell them this is what I'm working on, and I want it to be mine. If a business has an objection to a person owning the rights to their work, then you can tell your signing up for indentured servitude rather than employment. It's not a place you want to work for anyway.
I used to have this attitude as well that I couldn't ask for stuff and no one would agree, I gave it up, started approaching things earnestly and honestly and it's amazing the things people will do if you ask them in a respectful and polite manner.
It depends who you are. If you're an established software engineer with a name, sure. If you're a 22-year-old out of college, no chance. Most of us are between those extremes, of course, and generally realize at some point that we've moved into the with-leverage crowd. But nobody starts there.
I actually think it's best, as a general principle, not to work on side projects while employed. If the side project really is a side project (i.e. it's unrelated to your work and therefore something you justly own) you'll do a much better job of it if you work on it full-time. The side project and the day job usually both suffer if you try to serve two masters. But there are cases to which this principle doesn't apply (i.e. an iPhone app that doesn't take much time to build but becomes very popular) and it's for those that we need (in NY) better laws.
I find it hard to believe that it would be an unreasonable request that any work you do outside of the office, on a personal machine, and not utilizing any company IP be under your ownership. If such an issue does turn into a sticking point during negotiations, you should strongly consider that a red flag.
I'd really like a list of these companies with HR departments that are going to allow an exception to the standard contract because we just really need this guy.
You're absolutely right that companies would be better off in attracting talent by revising portions of their contract. You're absolutely wrong to suppose that they're necessarily going to do that.
Every one of them, in my experience. I think I've waived that particular clause (or refused to sign the agreement) five times now for five different employers.
You just need to mention it when they give you the agreement to sign. By the time there's a piece of paper printed out with your name on it, they're committed. And on the other side of the table from that piece of paper is the guy who hired you. A reasonable person that can recognize a silly clause when you point it out.
Just cross out the paragraph, initial next to it, then sign and hand it back. If they want to make a big deal about it, it's them making the big deal, not you.
For a lot of work it's standard practice to pay minimum wage and that's what most employers of such workers do. They don't make exceptions for a particular worker even if he has demonstrated surprising aptitude for, say, bagging groceries. Likewise, invention clauses like this are quite common, even the norm in some areas, and no company is going to make an exception for a particular worker no matter how valuable he might be.
Libertarian arguments like this which stress contracts often seem to fall flat by the following reasoning:
1 We seem to agree on what the desired outcome is.
2 If contract theory fails here, the outcome is undesirable.
3 If contract theory succeeds, the outcome is identical to what we would have achieved with legislation.
4 A legislative solution doesn't carry with it the uncertainly that a contractual solution would.
∴ Legislation seems preferable.
You have to know what outcome you want to effect of course, and be reasonably sure your legislation will achieve that. In this case we see (or at least strongly suspect) that when companies are not allowed to own IP produced by their employees independent of company resources and unrelated to their business, the financial benefit to the employee and the benefit to society in economic growth far exceed the benefit to the company (in most cases this benefit is zero). If there were a wider range of solutions I would not support legislation (or possibly I would support narrower legislation), but that doesn't seem to be the case. So I support legislation.
Many employers operating outside of California have a policy very similar to the California law. There are some companies with even more generous policies, though I'm not familiar with any major tech companies with a more generous policy.
Unfortunately, the blog post is somewhat flawed. In the CA law he references, it clearly states that the exception to you owning your code/ideas is if they "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."
While IANAL, the consensus on a number of websites is that, while working for a tech startup, anything that you do in your free time could technically belong to the company you work for as its related to your "employer's business."
You're misreading the law. As an example, if you work for a software company that makes iPhone games, and you write an iPhone game in your spare time and with your own resources, that game could be at risk of being owned by your employer. If, however, instead of making an iPhone game you make a photo sharing website, there's very little risk that your work could be owned by your employer.
There are obviously lots of gray areas in between. If you're planning to try and make money off something you built in your spare time, you should talk to a lawyer.
"Not related to your employer's line of work. Um, wait. What's the definition of related? If my employer is Microsoft, they do everything. They made a goddamn BARNEY PLUSH TOY with a computer in it once. Are plush toys related? Obviously operating systems, compilers, desktop applications, search engines, and games are related to Microsoft's line of work. Hmmm."
"This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV."
This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV.
I don't think it's this devious. It's simpler than that. Strategically and legally speaking, you never don't want rights, even if those are rights you shouldn't, by any reasonable moral judgment, have. Companies ask for aggressive terms not to be malevolent and devious but because the lawyer's job is to get the most aggressive terms (i.e. the most rights) possible. If it were legal for a company to assert rights over an employee's work for 2 years after employment, shareholders would expect executives, and executives would therefore expect lawyers, to push for those terms. The game, at least in theory, is about getting the most aggressive (and yes, often unfair) terms upfront and letting the courts sort it out.
The gray areas were exactly my point. There are sometimes clear-cut cases but generally things can be very vague to us non-lawyer types.
Look at this earlier HN thread for more info - http://news.ycombinator.com/item?id=2208056 . It talks about all the potential ramifications and that one should almost always talk to a lawyer.
Thanks for the link. That is literally insane. Modern day slavery. There is no logical basis for stopping someone from being in sales up to a year after leaving their previous company. Research is about the only area such a thing would make sense, and even then the restriction should just be on company secrets.
Yet another reason I will never work in the United Corporations of America again.
Illinois generally follows the more permissive Cali-style model.
The IEEE put out a publication that gives a solid overview of the differences in state laws; it mentions Illinois law specifically in a few places and includes a citation to Illinois statues that you can consult:
I recently took that startup genome quiz and I hit upon a truth that I sort of already realized: To launch a successful startup you need to do it full time. So yes your weekend project could be the next Facebook, but the odds are really against you.
I think the real issue with Silicon Alley (having been a part of the scene since the early 90s) is that Wall Street still swallows quite a bit of the top tech talent — that with a super high overhead can get in your way. It's better than it was years ago, but that's more of the big issue for NYC as I see it.
Yes, IBM is in NY state. If you want me to do your homework for you and buy a license for WestLaw then I'll pass. I'll leave it to you to prove a negative.
http://answers.onstartups.com/questions/19422/if-im-working-...
tl;dr from the post:
"So... to answer your question. There is unlikely to be substantial difference between the contracts that you sign at various companies in the US working as a programmer or in the law that applies."