From iWoz:

<quote>

Before the partnership agreement was even inked, I realized something and told Steve. Because I worked at HP, I told him, everything I'd designed during the term of my employment contract belonged to HP.

Whether that upset Steve or not, I couldn't tell. But it didn't matter to me if he was upset about it. I believed it was my duty to tell HP about what I had designed while working for them.

[Later, after getting an order for one hundred Apple Is]

I decided I should run the whole thing by HP one more time. I spoke to Pete again. He told me to run it by legal. The legal department ran it by every single division of HP. That process took about two weeks. But HP still wasn't interested, and I received a note from HP's legal department saying they claimed no right to my design.

</quote>

Oh Merciful Book Industry, please do not smite me for reproducing a few paragraphs from a book.

<quote> The very first thought in my mind was, "I think I signed a document that everything I design belongs to Hewlett-Packard." Even just on my own time, I thought that they deserved it first. And I wanted Hewlett-Packard to build this. </quote>

Good call.

An alternative is to not give up your company and hope they fire you, and then sue for unfounded dismissal. This can be quite lucrative. I wouldn't want to wage a legal battle in a country I just arrived in, in a language I don't speak though.

If you speak Dutch there is a quite good forum that often has useful advise (in addition to consulting a lawyer, not instead of).

The union advise below is, as much as I dislike them, good - for little money they will help you out with this. A legal assistance insurance isn't going to cover this issue at this point, if you didn't have one before this whole thing started.

Also I'm really curious on what company this is, and what country you're from.

I don't speak Dutch yet, unfortunately, and even if I'm studying it, it will not become good enough in a short time. So I can't use the forum you wrote about.

Answering your last question: I'm Italian and I'm working for a big big social network here (you will surely know it). The workplace is quite good actually, except for this rule, that happens to be one of the most important things to me...

I was intrigued by the legal issues and after doing some research I am not so convinced any more as I was in my previous answer. You didn't provide the full text of your non-compete clause but most 'standard' ones are quite elaborate and do include broad exclusions on what is considered being in competition. Considering that your company can afford professional council I would expect your employment contract to be quite elaborate and tight. The case law also points to a fairly broad interpretation of non-compete clauses - i.e. the competition can be only slightly overlapping and that would still be covered by many non-compete clauses.

On top of that, now that I know who your employer is, I would argue that you are (with at least one of your products) in direct competition with them and/or several of their strategic partners. It still sucks for you that they promised you could continue work on it and now they won't let you but that does not have any legal standing any more.

Anyway good luck. One hint as to an option would be that your Ltd can have a trust for a director, and that the beneficiaries of UK trusts can be anonymous...

    I'm Italian

What is true is that an employer becomes copyright holder of any work done for that employer, as part of the employment contract. No further contractual agreement is necessary.

I received my contract...

Then you say

But when I got here I discovered that I'm not allowed...

Did you sign the contract? What did you agree to in writing? Do they have other constraints not specified in the contract? If so, are you legally required to be subject to those constraints? You may have rights you are not currently aware of.

Sounds like you're beyond the point of soliciting personal and business advice and now your should seek legal advice.

Find a competent attorney and have him review your contract. Have him help you understand your options. This probably should have been your first step. But it's still not too late to do this. Do it now.

Understanding what your alternatives really are is the first step in a proper plan of action.

>I received my contract...

>Then you say

>But when I got here I discovered that I'm not allowed...

On my contract there is only the non competing clause. What I mean when I say "I discovered" is that they told me so by email after coming here. It is not something written on the contract.

Asking a lawyer is exactly what I want to do now. The non competing clause in my contract is very short and in my opinion it does not enforce what they are trying to compel me to do (I don't have it with me now, but I read it several time to be sure). But that's only my opinion and I really need legal advice on this.

That being said, at least in the US, employment is at-will, and companies can fire you for pretty much any reason. Arguably, a side business is a large distraction. For example, what happens if someone needs support during business hours?

Given the kind of apps I develop (as of now) it nearly impossible that someone will need urgent support.

This is not the case in the Netherlands (where the OP is). Employees are fairly well protected here, apart from the first month or months. That's the "probation period" (proeftijd) when an employer can fire you for any reason. It is also likely that initially you are employed for one year, which means that the company is free to fire you after that year (it's not technically firing of course, just a contract that ends). After that, people usually get a permanent contract and firing gets more difficult.

Please do ask legal advice. There are lots of low-cost options for an initial opinion. Google "arbeidsrecht" and you'll find a few lawyers offering a first consult for free (check the google-ads as well).

If that is all there is then they don't have much legal grounds to limit you like this.

It depends on how they define competing though as to whether this affects your startup or not - if your doing iPhone work for them it may count (that's probably why it's worth talking to a lawyer to find out).

Anything else (non-competing work, outside consultancy and open source code) is irrelevant - unless it comes under employment laws for the country (highly unlikely).

Legal disputes only work well when they are between equal parties. This employer/employee relationship is far from equal.

I am suggesting legal advice.

None of us should ever sign any contract or make any legal assumption without proper advice from an expert in this area. OP is probably no more aware of his rights and options than your customers understand how refactoring your code will affect their business.

OP acted without legal support. But it may not be too late to fix it. He needs to find that out. That is all.

Your current employer should be considered an enemy to your well-being and you need to find new employment post-haste.

No company will have regulations which are all-and-always perfect for every employee, and some managers will be stupider in applying rules than others - this is a good exercise in learning to stand up for yourself and getting what you want without quitting. If you're a good developer, they'll be willing to "bend a few rules" to keep you.

I concur with the top comment: run, don't walk, to the nearest exit.

So true. Cogs cannot rectify. Therefore, either give up hope or switch to a context where you are not a cog.

It's surprising how far people can string themselves along refusing to admit this (cf the fantasy literature about "organizational change"). I did it myself for a few years before snapping out of it.

Having said that, I wouldn't expend too much energy on trying to get them to change their minds...

Excellent point. I believe that no matter the outcome, going on the record in a "direct-but-professional" manner is good karma. Worse case: it removes any ambiguity about the reasons for your departure. Best case: it gives you the opportunity to talk some sense into one manager, potentially improving the lives of a whole team of developers.

It's also good negotiation practice.

If it's as implied and they flat lied in the interview then change policy? Step 1 is ignore them, you're not doing anything illegal. Step 2 is find a new job immediately.

They are paranoid you will steal from them the ideas you code on and compete.

They want to own your ass.

In either case, I don't like paranoid management, and I don't like people "owning my ass".

Now on the flip side I don't see why someone you TRUST can't own the company. You might program for it unofficially while working at your current company.

That's dreadful. It's a shame you can't quit.

(Bootstrapping while contracting is best when you own the consultancy company.)

"Do you want to keep your startup after you join us?" "Yes, I'd really like to." "Ok."

Maybe I was too ingenuous and share part of the fault, I really don't know. There were no written rules anywhere, just this verbal agreement. The person was the same one that then told me I have to stop, the head of software development of the company.

Obviously it would have been better to get it in writing, but even then, it still could be ignored and it's not like it's worth fighting.

Most contracts refer to (in the UK) the patent act of 1974 and specifically claims by an employer against work are restricted to that which they ask you to do, that which they support you in doing (financially, or with time benefits). Anything outside of those fall within your own remit and providing it's happening without their asking you to do it, and without them paying you or giving you time to do it... then anything you do is outside of work in your own time and whatever your employer says has no bearing on this.

Basically, they can control what you do at work and on their behalf... beyond that, they have zero say.

If you want to stay where you are, engage a lawyer to have this conversation with them. I pretty much had to do the same with my last employer just to make it explicit that what I created in my own time was nothing to do with them and they have no say over.

I understand non-compete clauses, but this doesn't seem to apply here.

In the German system the oral addition stands above the written contract. The written contract is considered boiler-plate by the courts and the oral addition is more specific, and bears more weight.

Of course all parties have to agree to amend a contract. So just the employer changing their mind wouldn't cut it.

The Netherlands is a civil law country, so the German standard might be closer to what they have than the common law American standard.

Labour relations and law are of course a strange thing in themselves.

You've wisely chosen to not ruffle any more feathers there. Just behave and get out when you can.

In many cases when an employer wants to get rid of an employee for a reason that isn't covered by the employment contract he has to request permission from a local judge (small claims court equivalent)... and even then the judge can determine an outrageous "termination fee".

So although the rules like these look draconian, they're sort of needed to keep the power between employer and employee in balance.

In Canada this practice is not legally supported, but still relatively common.

Maybe I'm paranoid, but just to cover my ass, these days any time I agree to anything with just about anyone, I insist on adding an explicit clause that makes it clear that I am free to work on any other project with no restrictions (I specifically retain the right to compete), and that except for the works specifically covered by the contract, the other party has no claim or license to any intellectual property that I own or create.

Then again, that's par for the course when it comes to work-for-hire, it's been a long time since I've signed an employment contract as an employee, and I doubt those additions would fly as easily in that circumstance...still always worth a shot, though, companies will often agree to change details of contracts for you as long as they don't feel they're getting screwed by the changes.

That's bullshit if they've told you that. Threaten to challenge them legally over that (a simile might be if you worked in a garage and your contract "stopped" you from fixing your neighbors car as a favor at the weekend).

If it is not explicitly in the contract it is not legal for them to say this to you.

It annoys me how software companies think they can get away with things like this.

I would go do whatever software you like (as long as it is not competing, obviously) and let them try to a) find out and b) stop you.

Maybe we should, as a collective, start a campaign to drive out the most over bearing clauses!

Do you work for Accenture?

Sure sounds like their strategy: (1) hire young, incredibly bright & talented people (2) isolate them by (a) sending them on the road for engagements (b) work like dogs (c) party (very hard) only with other Accenture people in limited free time (3) repeat

Make no mistake, it's a cult. Fun for a while, but ultimately very empty.

If the ridiculous contract says they own everything you do during your employment, wait a reasonable amount of time until after you've quit to launch anything.

It's better to never sign the contract or take the job in the first place. We'd all be better off outing companies who force people to sign these kinds of contracts.

I'd be very wary of a company that is that shortsighted.

(Being paranoid doesn't mean they're not out to get you, etc.)

In my opinion, the work that most companies offer are challenges, but not very interesting ones and the no-outside-work clause would prevent me from taking on a spur-of-the-moment challenge outside my particular development area that might actually lead to some self-improvement.

This sort of thing is why I got a chuckle out of the claim that there would be "enough interesting challenges in [OP's] job." No employer can offer me enough interesting work that I won't find something unrelated I'd like to play with in my spare time, and I'm probably not alone in that.

Most people face these sorts of big, tough choices in life. Many let the situation make the choice for them. Those people are generally not entrepreneurs. Make a conscious decision. Make it and mean it.

At my work, we've taken explicit steps to allow people to open source, and most legal departments in larger companies can often respond (and sometimes even positively) to requests to retain copyright, but most of the laws say that programming work done on your own time, even on your own resources, very simply belongs to your primary employer.

I had a friend lose his house after the company he worked for decided they didn't like his new consulting business that was only a modicum similar to the job he left. It was punitive and petty, but they managed to nearly ruin him. This was in northern virginia, whose laws are only slightly less midievil than most.

So while much of the advice here is to 'get out' and 'run', the question that is not answered is 'to where'. A more reasonable response is to ask yourself if you are okay with this kind of arrangement , and if not, resign and make sure your next job doesn't have this kind of language in the contract and that you have an affirmative recognition of the kind of ip deal you want with the company.

This, btw, includes people in california, who's laws allow a loophole for employers the size of a truck in its anti-competition language.

It is always worth your time to understand what is going on around intellectual property in your jurisdiction, your contract and your personal ethics because as the OP saw, it can be difficult to resolve after the fact.

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.

Most employers have overly broad clauses like "everything you write is our property," and I let them know right up front I would never hire on with a clause like that. It definitely took some negotiation, and I had an advantage in that I had been a contractor for 1 year previously, and they really wanted me full time.

Eventually, they got what they wanted, a full time employee, and I got what I wanted, full time employment with the ability to develop my own iPhone software on the side and retain ownership of my software, as long as it doesn't directly compete with them.

This was back in 2007. You definitely need to be careful what you agree to, but most companies try to get you to sign non-compete agreements that are over broad and unenforceable.

A "little chat" afterwards has suggested that it is not.

Both of these little chats are beside the point - it is the contract that matters. So the question is, does your start-up compete with your employer. That's not compete as in "compete for time in the same way that eating a sandwich would compete for time" that's compete as in "compete commercially".

If not then your are not breaking the terms of the contract. If they would like to renegotiate the contract that is something they need to talk to you about.

I see that Pawn is a Ltd. company, so I guess that you are based in the UK in which case I suspect an industrial tribuneral would find in your favour and award you compensation if your employer tried to fire you for this. You might wan to have a chat to a nice lawyer.

Can you not get another day job, which has nothing to do with software but is enough to pay the bills? That way you wouldn't have to worry about weird contracts and could work hard on your startup in your spare time?

However, given that your startup revolves around iPhone development, as does your current position, it's likely they're concerned that you will get burnt out on it... I'm not defending their position, just stating a possibility.

Just keep doing stuff on the side and don't tell them. They're not paying you enough to own you. Maybe they're paying you enough to slow you down, but never enough to own you.

Doesn't contracts matter any more? That is an usual non-competing clause and i guess that you don't develop apps that compete with what you build in your day job...

Quite sad, wish you the best...

I was interviewing with them few years ago, and when I asked if they are OK with me writing side projects, and they said "Why would you want to do that? Besides you are going to be busy coding for your work projects... even when you are at home."

I've recently started a company out of a hobby project while working for my day-to-day employer and they've never raised an eyebrow about any of it - it's one of the things I value most about my current job. DeusExMachina, your story is a real reminder of how important this has become to me - thanks for sharing.

I don't think there is anything in here that you need to worried about, but I figured I should point it out. Their HR department might complain anyway, if they ever see it.

This is normally how contracts work. I'm not sure where you got screwed.

You can either quit your job and continue doing your startup,

    or

Btw, you can always find a "prestanome" and keep pushing out apps. ;)

They hire good programmers, who are slightly entrepreneurial & try to turn them into employees by ensuring they have no fallback of any sort?

Give us their names, so we never deal with them ;)

An employer (themselves a start-up with big funding) hired a new employee, offering relocation costs to bring the employee and his family across the country. The employee was hired to lead a new project whose scope was only partially clear during the interviews - the guess was that it would probably be a 6-to-12 month project before moving on to other tasks.

During the few weeks of relocation process, another employee at the company realized that a simpler solution would be good enough and completed the project. So, on day 0, the new employee was told "Oops, we don't need you for that. We'll try to think of something else."

The company then balked at reimbursing a large percentage of the relocation costs. They simply deleted line items from the expense report, paid out rather less than the agreed upon cap, and said (in effect) "What, you wanna fight about it?"

The new employee was both the only employee actively working on a visible free software project, and the only male with long hair. (To be clear, the employee "presented" at the office in Dilbert attire: dress slacks, crisply ironed white button down nerd shirt, hair neatly tied back, etc.)

HR announced new policies: (1) regulation of hair length was introduced. (2) outside-the-office work on even utterly non-competing free software projects was forbidden. The new employee was cautioned about (1) and told, regarding (2), to take down his project's web site.

Now, what is the motivation of the employer here? Money. It's simple:

If the employee were fired or quit before 90 days, the employee (per contract) would owe back the relocation expenses. On the other hand, if the employee were fired before 90 days, the employer would almost certainly be forced to defend itself against - and likely lose - a suit for having made a fraudulent job offer that cost the employee greatly. Thus, the company had a strong financial incentive to inspire the new employee to quit in less than 90 days.

Beyond 90 days: if the company fired the employee for cause or if the employee quit then that would be that. On the other hand, if the company fired the employee without cause, then the company would be on the hook for the employee's unemployment benefits. Thus, the company had a strong financial incentive to inspire the employee to quit, or to justify a for cause firing.

The pattern that started on day 0 of employment continued. HR started dictating stricter policies on hours (while selectively applying the rules mainly to this one employee while winking at the others). The highest level managers assigned the employee useless work and then changed their assignments frequently (to other useless work). The employee was allocated a malfunctioning workstation.

The employee got the message and planned to stick it out for the 90 days and/or until finding a replacement job and then get out of dodge. Then some mysterious things started happening: Of all the cars in the parking lot, the new employee's somehow wound up being the one whose tire stems got cut. A VP got in the habit of "stalking" the employee around the office. A manager cornered the employee in a cubicle and menaced him with a threat of physical violence while barring the employees exit from the cubicle. (The list goes on but those are some highlights.)

The last day was the one that the employee left his desk for a few minutes to make some photocopies, returned, and found that -- and I'm not kidding -- urine had been added to his drinking water.

Fearing for his safety, the employee left and did not return. He later received a demand letter for the return of relocation expenses. This being a "your word against theirs" situation, he had little choice but to comply.

The employee, in subsequent years, displays symptoms of post traumatic stress when entering cubicle-type office environments. He was forced to declare bankruptcy after these events.

Short summary: if on day-0 an employer has already decided that they made a mistake and shouldn't have hired you, it may very well be the case that (for money reasons, at least) they want you to quit rather than to fire you.

One way to push someone towards quitting is by piling up unreasonable demands: like no outside work on free software.

In such situations, unless you can prove the fraud or any underhanded or illegal actions by the company, they hold all the cards. "No outside activity," may be nothing more than a warning shot.