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I work as an engineer full-time with a technology company in California. When joining the company I signed a company code that had an explicit moonlighting clause stating that "employee cannot do outside work without prior permission from HR."

I want to develop my side-project into a company (llc or inc entity) in my own time and not the company time. I have heard that moonlighting can not be restricted in california and such moonlighting clauses are not enforeceable in the state.

Do I have to take my employer's permission for it even though it's done during off-business hours? (since very few startup ideas succeed, i do not want to bring employer's attention to it at this early stage.)

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I would suggest getting legal advice; its unlikely that the "moonlighting" laws would allow you to work if there is a conflict of interest, for example, and anecdotal legal advice is not always sound. You may also want to get legal advice around IP ownership of any idea you have while employed based on your employment agreement and local laws. I'd also add that approaching this from a legal standpoint is very much a win-lose senario, and its seldom a good idea to force management into this position if you want to have any kind of relationship in the future, such as a possible exit. – GuyM Dec 23 '12 at 21:30
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Get professional legal advice if your are serious about your idea. Your employer may not be legally entitled to part/all of a company you start while you are employed, but that wouldn't prevent them from hiring lawyers to attempt to prove otherwise. – mcknz Dec 23 '12 at 21:37
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@JoeBlack You should read the following answer by Joel Spolsky on this. Basically it sums up the ownership situation quite nicely. answers.onstartups.com/questions/19422/… – maple_shaft Dec 24 '12 at 12:17
Hi Joe, welcome to the Workplace SE, the site for questions about navigating the professional workplace. While your question was closed as off-topic, it did generate some discussion on our meta site. The conclusion is that the legal aspects are tough for us to answer, since we're not lawyers. With that said, your question is very well-written, and I hope you continue to partipate on our site! Again, welcome! :) – jmort253♦ Dec 28 '12 at 20:28
Hi Joe, feel free to use the suggestions in the meta discussion to edit your post to make it more on-topic, and we can review reopening it. Good luck! :) – jmort253♦ Dec 28 '12 at 21:33

closed as off topic by Jim G., GuyM, alroc, Monica Cellio, gnat Dec 24 '12 at 9:40

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1 Answer

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Here in the UK, this is normally covered in the contract via 2 different angles. To summarize very briefly:

(a) You have to notify the employer if you have alternative employment

(b) Any designs/inventions developed whilst with the company must be handed over

It sounds like you fall more into case (a).

My take on this is that the company wish to be kept in the loop if there are any hours you would not be able to work. Additionally (although unlikely), it could be possible that the 2 jobs might conflict e.g. both companies may ask you to work on a given weekend.

It is also perfectly reasonable for the company to know what other work commitments you have. If they know you have a second job, they may wish to allocate some of your workload (which would otherwise be done in overtime) to another employee.

The arrangement could well be a temporary one. A colleague of mine took on a number of part-time jobs while his wife was on maternity leave. He notified the company and assured them it was only a temporary measure and they did their best to ensure that meetings/client trips weren't scheduled when he had other work commitments.

Seeing as you're not in effect employed by a second company, it is moot as to whether any of this applies. You're really just developing an idea which may or may not turn out to be an alternative employment opportunity.

If however you're developing an idea which might cause you to ultimately become a competitor, then this is different again - case (b) territory. You might think you have to burn your boats once you start your new venture but this is not always the case. Depending on the culture of the company, you could become an intrapreneur. You get to work on your idea while the parent company shares the risk, provides the premises and the materials and you are largely just left to get on with things. They will of course take a substantial cut of the profits themselves for providing all this, but it is an alternative you may wish to consider.

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and case B is quiet broad if its at all related to your day job it belongs to your employer. – Neuro Dec 24 '12 at 11:40

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