I practically rewrote every IP "agreement" for nearly every job I had since I started working in industry (ca. 1965). The terms were more or less as follows.
1. I am in the business of invention. I invent many things. I cannot possibly disclose all of them. Hence, ANYTHING I have done in the past is excluded and ANYTHING I will do after I leave your employ is excluded without having to be disclosed. This is true even if the thing invented can be construed to be directly or indirectly connected to your business. The only exception to this will be those things directly and explicitly connected to your IP disclosed to me during my employ for a period not to exceed two years after my departure for un-registered un-patented IP. Normal patent and copyright laws apply - BOTH ways.
2. What I do 0n your time with your equipment on projects specifically assigned to me is yours.
3. What I do on my time with my equipment on my self assigned projects distinct from yours is mine.
4. Since my business is invention, if the invention was concieved on your premises but is not DIRECTLY connected to your business, your disclosed IP, and your assigned project, the invention is mine. This will be true even if the invention is used to indirectly support project. In that case, a non-exclusive license to use will be granted by me to you but I still own the resultant IP.
Almost without exception, the terms were accepted. Where there was substantial disagreement, I looked for another job/contract.
What size employers? I'm finally understanding that basically everything is open to negotiation with smaller organizations. However, many large organizations have stock contracts on their Intranet which you e-sign, and there's literally nobody to negotiate with. Plus, if you decline to sign, they'll happily find another employee, since they've got too many already.
I did it with large and small. The largest one was General Motors (ca 1998). I negotiated the IP agreement with my first industrial employer. I didn't get all the terms I asked for but I did get enough to make it worth while to sign.
An additional requirement might be that you actually have to be an inventor with a proven track record. If your proven record and skill set is indistinguishable from millions other workers, you are hosed no matter what. You have to take what you can get. In that case, it doesn't matter because you have no IP to protect anyway.
Most IP agreements are written by lawyers who arrange the terms to be totally one sided. Your employer is to have absolute claim over the entire contents of your life. THAT is simply unacceptable. Yes, you need a job but the employer needs someone who can do the work as well. You don't have to agree to be a rightless drone. A job like that is not worth having.
You have the right to pursue your skill to make a living. An employer does not have the right to prohibit that. Ask for terms that respect BOTH your and your employer's rights and you are likely to have them accepted.
Judge him only on his performance. If you can't do that then you are a bad employer. His work performance is what you pay for. It's up to him to make sure he delivers on that promise.
Objective, concrete, quantifiable metrics are the unsolved problem. Every one that I've ever heard of can be gamed by the developer. The only exception to this that I can think of is the metric of product success in the market. But it's too large-scale to be useful in measuring individual employees.
Subjective metrics are quite common and effective. That's how good programmers such as <insert favorite hacker hero here> are regarded as good.
I'll second this. The issue of whether you are paying for his time or his performance is a cloudy one. The paying for time argument invariably gets into issues like how much other unproductive time you spend doing things like talking to coworkers, using the bathroom, staring out the window, and browsing the web. In general it seems to degenerate into the horribly inflexible clock-out-when-you-go-to-the-bathroom factory-ish policy.
So if you are happy with his actual concrete performance, then I'd say don't worry about it. If he can make you happy spending 15 minutes of real work per day, then you need to think hard about how to better leverage his talents. Unfortunately, increasing your expectations of him while keeping everyone else the same will not make him happy either. It's still a tough issue.
Performance Metrics: Many companies view this as overhead. It's sort of a pain in the ass, so if I have to do it because my employee is working on the side, then he needs to carry the burden compiling the metrics. He could stay on-site an extra half hour per day and generate a report on what he did, or I could generate the metrics, and just pay him a little less for this inconvenience.
If he's your employee, you really should have a feel for how long it takes him to get something done. You should also know what sort of quality to expect from him.
If you can't determine those things, then one of you is not doing your job already.
I do completely understand why an employer would own the employee's work if it is related to the job and was completed using the employer's equipment... but it still worries me, as a developer, and as a consumer.
I figure the public has an interest in promoting as much innovation as possible. This means that we want employers to be able to hire employees to work on innovative projects, but we don't want to discourage employees from working on projects on their own either. So if this relationship gets out of balance, we could end up stifling innovation from one side of the relationship.
Think of it this way... suppose I'm a house flipper. I mainly do this on my own time, but I do search the web for properties, email friends about investment opportunities, and call mortgage brokers while I'm at work. It's not a huge time sink, probably no worse than the random goofing off or reading hacker news that goes on at work.
I doubt a court would allow my employer to "own" my profits from flipping houses.
Now say I have a side programming project. I mainly do this at home on my computer, but occasionally I think about it at work, and I have fixed bugs, sketched out an algorithm, or tested the site at work, and I did write a bit of code on my work supplied computer.
In this case, I suspect the courts (IANAL, of course!) would award ownership to my employer, even if the project is unrelated to my work tasks.
So basically, the law does encourage programmers to start side businesses in areas unrelated to technology... but don't we want programmers to innovate in their field of expertise? Personally, I'd much rather see programmers writing innovative applications than flipping houses.
I don't have an easy answer for it, because like I said earlier, I also do see a clear need to provide IP ownership for investors employers who are paying employees to innovate. But I'd draw this line more narrowly - no big surprise, since I am a programmer "employee" myself, and these rules would favor me.
The employee running his own business is going to be somewhat distracted, just like an employee with a family or kids. It's something else that is more important than his job. The thing is, an employees interests don't exactly align with the business owners interests. As a business owner, almost everything I do is focused on growing that business. The closest you can come to that in an employee, really, is a single person who is really into programming. these people will have hobby projects, but that's ok, especially if they can be things kindof related to technologies your business uses. Like the SysAdmin who writes apache modules.
That said, you don't always just fire people when they get married. the question, simply, is 'Is the employee, with all his or her distractions, still worth his or her salary?' - Most of us are unwilling to remain single and completely dedicated to our jobs for our whole life. Right now, for instance, if you want to hire me, you have to put up with my business being my primary focus, otherwise I won't work for you. (but then I'm a contractor, so that's not unexpected.) And just imagine the outcry if you acted against people who valued their family over your business.
My gut reaction would be to just let it be. Telling him that he can't sell it will lower his morale and possibly hasten his departure for a firm that doesn't mind (or for the project itself should the income prove to be at least enough to live off).
Does the item have value? He might be interested in selling it to you. If an employee likes his employer, they won't mind giving you their work for a little bit of money. You can always branch out into new areas.
Unless you're willing to make the employee a partner at your firm, I don't think there's much you can do that wouldn't seem "evil" and you don't seem like the evil boss type. If they're a partner at your firm, they get to direct the firm to an extent and share in its profits. If they're just a wage laborer, they will leave when something better comes along and that's one of the costs an employer must beat - and similarly the employee must bear that they cannot be paid the full value of their output as a wage laborer.
I'd say just let it be. Most web applications don't go anywhere. Be supportive and happy for him. In the case that it fails (or makes a few hundred dollars a month), he won't be leaving you and you'll come off as the awesome boss who is supportive of personal growth and chill with stuff. And that will make him stay even longer.
He's doing it in his own time - end of. If he's really that good then I would invest in his idea. If he is losing focus then kick him out. There's no absolutes here, just depends on how he works.
"But obviously, there are a lot of issues involved."
The issue here is that you have an employee that's passionate about what they do (shocker I know). A trait that's rare and should cause you concern only because there's a good chance this developer will jump ship to pursue their passion full time on their own.
I'd try to keep them employed (for you) as long as you can by encouraging this 'free time' project which will hopefully also influence your other developers to take up their own pet projects.
It's not the project that is of value, it's the engagement of the mind that benefits you and the work they create for you.
I started working on my own stuff to keep on with technology and bring some fun into my life. I never stopped working on a side project; I do not mix my time at work (at my employer) and my side business. Today as a full time consultant I found it even easier to equally use my time at both my startup and my clients.
Am I the only one who's read the original issue as not the problem with extracurricular activities per say, but the fact that the employee now wants to sell one of those apps?
The employer said:
One of my employees is always working in small applications for his family or just for the fun of it. Now he wants to start selling one of those applications.
... and
I think that anyone can do what he wishes with his own time. But obviously, there are a lot of issues involved.
The way I read it, he's known about the side projects for a while and never had a problem with them. He is having second thoughts only because he's learned that the coder wants to make money off one of those projects...
I think that what's really happening here is the employer having a personal bias of the money-is-dirty variety. Obviously, anyone is welcome to whatever moral attitudes they like, but to force them onto your employees is completely inappropriate.
The issue is that coders can only load so much code into their brain at once. There's a huge switching cost involved in going from 'own-app' to 'company-app'. You are simply not as productive when working 2 significant projects at the same time.
This simply isn't true, in fact for many the working on only one project is extremely boring and the home project may actually revitalize his interest and let him pursue more interesting work that further increases his skills. That increase in skills will benefit his other work projects.
Excellent point, I’m probably the only hacker I know who do not play video games; for some reason I stopped when I got in college. But I remember as a teen I drained me as much as studying, I think playing video games can be harder (or equal) on your hacking resources as actual hacking.
Games, drinks, children, etc. are diversions from the activities of software development and business which the employer is paying you to engage in on their behalf.
Participating in them outside of office hours would tend to _increase_ your productivity at work by giving your head a rest.
Our most productive employees are the ones without kids, families or bustling social lives. And those same employees are the ones who are working on "side" projects while they are also working for us.
Any company that would tell an employee that they can't work on a side project, either as a business or a hobby that is not in direct competition with that company is setting itself up for failure because it's a sign of a larger cultural issue within the company itself, stemming from severe mismanagement.
"Side projects" and open-source projects are great for self-education. I've nothing but good things to say about them for employee improvement.
Running a separate business is a different story altogether. Do you really have productive employees who are operating software development companies on the side? If you do, I can guarantee their primary attention does not lie with you (even though their primary income is being paid by you).
This, I think, is the key distinction. Running a business is a whole lot of work, and much of that work does not make your guy a better software developer. Running a side business is probably going to diminish a programmers productivity.
Writing an application (and ignoring the business and customer service side of things) likely will make your programmer more productive, 'cause he learns all this new stuff.
Yes, but that's not something a company owner can control. If the employee is building, say, a website in his own time he is at the very least giving the owner the illusion that it is something he can control; in the end it all depends on the IP clause in the contract. For both employer and owner it is better to take on a "Don't know, doesn't hurt" attitude.
This is not true across the board. It's very sensitive to people, projects, levels of interest, and time between switches. For me, it's especially false with boring projects, where I simply have to be able to switch to something interesting.
This can be really nasty for a small business. On the one hand, you understand the desire to build a seed for a software company, on the other you're dedicating scarce resources to pay this employee to work exclusively for you.
I'd tend towards overly-harsh on this one: You're either an employee or an entrepreneur. The choice is binary. We'd love to have you as an employee, but a person building their own business and riding on the salary we (a small business ourselves) pay while they do it is not welcome.
Every employer I had before heading off and starting my own company had an air-tight IP policy which basically owned my software-developing ass. That makes sense: You're either an employee or an owner, you don't mix the two.
you're dedicating scarce resources to pay this employee to work exclusively for you
Bull-fucking-shit. I don't understand the mentality that because someone pays me for 40+ hours of work per week, they think they own me and can demand that I work exclusively for them, or that anything I do in my own time belongs to them. If my work suffers, or if I'm stealing IP or clients, that's another story. But if I'm working on something in my own time, fuck you if you think you own it.
As I mentioned in replies to your other comments above, running a business requires your full attention. It's not a hobby. It's not a side-project. It's a way of life.
You cannot work for another person while running your own business. A business becomes the centre of a person's universe and an employee's work will suffer if they are building a genuine business on the side. No amount of dramatic profanity will change that reality.
Of all the vigorous down-mods and "you're wrong!" comments I've received here in response, I've yet to read a single real-world example of a person who has a full-time employee on staff working on their own business, or who is a full-time employee working on their own business while being paid a salary by another company.
Why? Because you're an employee or you're an entrepreneur. Those are not compatible mind-sets.
If you work for me and want to start your own company, great! I'll happily send you on your way and offer every bit of support I possibly can to ensure your success, but I won't pay you to build your own business.
I have and have had several coworkers that remained very productive at work while running their own businesses on the side.
My own personal experience was much as you say. (I kept my day job for 8 months while trying to do my startup on the side.) Eventually I found that the startup was all-consuming, I couldn't concentrate well on my day job, so I quit.
I can't help thinking that maybe this is because of my inexperience as an entrepreneur, though. Because several people have created successful startups while employed by someone else. Steve Wozniak did the Apple I, video controllers, floppy disks, and all sorts of other hardware while employed by HP. Pierre Omidyar created E-bay and grew it to profitability before he quit his day job. Joshua Schacter wrote del.icio.us while employed by Morgan Stanley. Bill Gates grew Microsoft while both he and Paul Allen were employed by Altair.
I've yet to read a single real-world example of a person who has a full-time employee on staff working on their own business, or who is a full-time employee working on their own business while being paid a salary by another company.
You're clearly not reading carefully, because I pointed out examples where I've done this, and I'm sure many others have as well. Most businesses are started on the side of something else, including most successful businesses. While it's likely true that you can't indefinitely work as an employee while building a business, you can certainly start a business that way, and it's been done many, many times before.
I'm not arguing that you shouldn't have the right to fire someone if you don't like them working on something else on their own time, just that your mindset is indicative of a larger management problem of viewing your employees as assets that you own 24/7. Why would anyone of value want to work somewhere like that? There are plenty of people out there who value output over input and understand that an employee's personal life is none of their business.
Dude, you're hiring contractors for temporary work. Of course they have their own businesses!
Put someone on your payroll full-time with benefits, paid vacation and sick leave and then encourage them to start a business on their own time while you pay them full wages. Then you'll have something to crow about.
The only information that should come into play when making decisions about the firing of full-time employees should be their actions between the time they start work and end work every day. Your preconceived notions about how an employee's outside activities affect their job will not apply to everyone, and are irrelevant to the question of continuing their employment.
> The only information that should come into play when making decisions about the firing of full-time employees should be their actions between the time they start work and end work every day
This just simply isn't true. Imagine if your CFO gets caught with hookers and blow by the cops on a Saturday night. It may not affect his work during work hours but it most definitely negatively affects your company from a PR perspective.
So you just can't make a blanket statement like that.
I assumed that serious issues such as illegal behavior were obviously excluded from my statement. Your case also applies to the defense industry where disclosure of classified information can land you in jail. I'm talking about clearly legitimate out-of-work activities here.
How mature does their business have to be? Markus Frind (of plentyoffish.com) doesn't have an outside full-time job, but from what I hear he easily could. But the issue is not whether there are examples. The issue is that you shouldn't need to know whether an employee his a business or not. You look at their performance and nothing else. If you're right, their performance will suffer and you have reason to let them go. If you're wrong, you'll never even realize they have a business on the side. However, the converses of these two statements don't hold.
Markus Frind had a day job for most of the time he was developing PlentyOfFish - when he's described his development process, he said "Basically every waking moment outside my day job was devoted to improving the site, trying out ideas, and making it better for my users."
BTW, between your post and mine up-thread, that's 5 examples. Microsoft, Apple, E-bay, Del.icio.us, and PlentyOfFish.
Define "own business": I guess if you are looking for multi-million dollar businesses being run in someone's spare time, yeah, you won't find many examples. But what about the guy who simply wants to have a second source of income by running something in his spare time? Plenty of examples of people who turn a hobby into something that resembles a business. Plenty of people earning a second income by trading something, creating something. How much revenue is enough? 5K / month?
Well, gee, if it's so awesome to empower one's staff to start their own business while working on your payroll, I'd expect employers of software developers would be trumpeting their fine examples from the hills to attract the best staff possible!
Why the silence? Because starting a business while working full-time for another employer does not work, and any person who has started their own software development company would understand why.
What if you're doing open source software? That's a similar situation. I think the idea of an employer trying to tell you what you can and can't do in your own time is pretty offensive. You have to keep things separate, of course, but beyond that, your own time is your own time, period. Obviously, if it's visibly affecting an employee, in terms of less hours worked, or lower quality, ok, sure, have a talk about it, but the difference is that you're looking at work time in that case.
I've nothing but good things to say about employees working on "side-projects" and open source projects. They're superb for self-education (I enjoyed participating in both while I was an employee) but are completely different than running a business.
Running a business isn't a hobby: It takes all of your attention, day and night.
I'm not paying employees to start their own business, I'm paying them to work on mine.
edit: I know this chafes with the 'free spirits' on this site who haven't found the guts to start an actual business yet, but I promise you'll find it's true when it's your cash going out as wages.
If you think you can buy every thinking hour of anyone, you are just kidding yourself. Someone that wants to start a business on the side will do that if you want or not. If this hurts your feelings, maybe you should reconsider your ideas about work.
Wrong, you're paying employees for their output. If their output is suffering, for any reason, find someone else. If you lack the necessary metrics and management skills to measure their output, that's your problem, not theirs.
Get back to me after you've run a business of your own. Not a hobby: A self-supporting corporation which provides your full livelihood.
Let me know then how well you'd do as an employee working for someone else, and if you'd be eager to hire on staff with the same "starting a company on-the-side" mindset.
I've been self-employed for the last 18 months and I regularly hire contract people to do work for me. Additionally, I own several real estate properties for which I employ a manager and regularly contract people to perform services for me. I pay them to get their jobs done, they do, and I could care less what they do with their own time.
I have no problem hiring someone who is going to start something with their own time, as long as they do the job I hire them to do. Back when I was an employee, I was always pursuing ventures on the side, and without exception, my employers were supportive and sad to see me go when I left, for the simple reason that I did my job.
"I pay them to get their jobs done, they do, and I could care less what they do with their own time."
That's one of the best answers yet. Anything else is entirely unacceptable. (And reminds me of amazon, worst place I've ever worked.)
If they're getting their work done, then you as an employer have no right to complain about what they're doing with their own time and equipment, end of story.
Stealing IP is a different issue altogether, of course -- and that's never acceptable.
However... the main reason that I pursue side projects is that my work fails to offer an intellectual challenge for me. I get my job done, and then hunt for intellectual exercise in order to keep my brain in shape.
That's a pretty broad generalization. I'm actually working on building a business on the side of my work, but I do my job. I focus on my own thing when I'm not at work. I also get my work done, and take time to test it.
There will in theory come a time when my side efforts will require effort enough to get in the way of my regular job, which is in fact the goal, but I have the integrity to face that -- and when I reach that stage, I'll leave the regular job.
If you're running a small business where everyone working for you has to put in 80-hour weeks in order to keep up with their work, then the fault is yours for your poor management -- though to be honest, I'd never consider working for you just because of your attitude toward your ownership of me.
Get it straight: you don't own your employees, period. What they do when they're on the clock is your business. Everything else is not. If you can't get that through your head, you shouldn't be attempting to run a business that requires employees. That's not an opinion, it's actually law -- don't forget, we abolished slavery.
If an employee on your payroll starts a business, they're not doing so with your best interest in mind and their work's focus will change accordingly.
Fuck. That. Shit.
Everyone is a contractor. There is no loyalty on either side of the employer-employee relationship. It is a hurtful delusion to harbor fantasies otherwise.
Judge an employee on their performance. Nothing more, nothing less.
What happens off the clock is none of your business. Literally.
Good use of someone else's life-affirming stick-figure profanity! As The Man in this case, I feel totally stuck to, dude.
I'm still waiting to read of even a single example of a full-time employee who is working on (not preparing for) a business of their own while collecting a full-time salary. If it's such an awesome thing, there must be dozens of examples to choose from, right?
Why the silence? Because that employment arrangement does not work, and any person running their own full-time business would know why.
Working as a contractor while getting your business up and running? Great! That'll work fine.
Working as a full-time employee while starting a business? Doesn't work.
If you walk the talk and start your own company, you'll understand why you wouldn't want to be paying a person out of your own pocket while they're going through that process.
The burden is on you to find evidence that an employee's work is slipping. They prima facie have zero obligation to you to justify their off-the-clock activities. Even informing you of those activities I would take as a token gesture of goodwill. In your specific case you have not given any evidence of failure to perform on this employee's part. You've projected your own insecurities onto this third party but not demonstrated any issue actually being present. If this employee's work has objectively suffered then can his ass and get on with life. If his work has not deteriorated then you've got your example right there. Sitting under your nose.
Quit worrying about what this employee can or can't do. Pay attention to what he does or doesn't do.
Sorry snowflake, the world doesn't work that way. You'd think the inability of any of you to find a single real-world example of an entrepreneur working on someone else's payroll would confirm that reality for you, but I see you choose to cling to a dream-world instead.
You're an entrepreneur or you're an employee. You cannot mix the two, and if you find the pills to start a business yourself you'll understand why.
Are you saying that if your most productive employee were also running a side business (not side project), you would fire him out of principle?
Or are you just assuming that the side business would make the employee less productive to an unacceptable point (a fine reason to let someone go, but that a side business would cause this is still just an assumption).
I agree it can be pretty destructive in a small company, but what about big businesses? They're inefficient anyway, so the lost productivity is not such a big deal over there. Is it morally acceptable to freeload, but only in big businesses?
I don't think it's morally acceptable to freeload, but for big businesses the point is likely moot: The IP agreement they will have had you sign at the start of your job will take away all rights to your on-your-own-time product in any case.
The interesting philosophical issue I find is what if you can freeload and your work doesn't take a drop. Or more provocatively, what if you freeload and your work productivity increases? In this case, it's likely that your abilities could be managed better to more fully extract your potential. Unfortunately this is impossible (or very difficult) for most companies to do.
I like to turn projects I am working on for clients into services I sell to new clients. It seems to work ok. My clients get better quality and I get more income without extra hourly work.
1. I am in the business of invention. I invent many things. I cannot possibly disclose all of them. Hence, ANYTHING I have done in the past is excluded and ANYTHING I will do after I leave your employ is excluded without having to be disclosed. This is true even if the thing invented can be construed to be directly or indirectly connected to your business. The only exception to this will be those things directly and explicitly connected to your IP disclosed to me during my employ for a period not to exceed two years after my departure for un-registered un-patented IP. Normal patent and copyright laws apply - BOTH ways.
2. What I do 0n your time with your equipment on projects specifically assigned to me is yours.
3. What I do on my time with my equipment on my self assigned projects distinct from yours is mine.
4. Since my business is invention, if the invention was concieved on your premises but is not DIRECTLY connected to your business, your disclosed IP, and your assigned project, the invention is mine. This will be true even if the invention is used to indirectly support project. In that case, a non-exclusive license to use will be granted by me to you but I still own the resultant IP.
Almost without exception, the terms were accepted. Where there was substantial disagreement, I looked for another job/contract.