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I have a question about laws and practices in the software industry, specifically. I am wondering whether there are any restrictions regarding whether it is possible to do freelance work or have a "hobby business" doing practically the same thing as a company you are employed by full time? I assume such a situation would be problematic if the employing company gains its competitive advantage from the inner workings of their products or services. On the other hand, when this isn't the case, I don't see this being much of a problem. I remember hearing somewhere that there are laws regarding this, but I cannot remember the source.

Are there any regulations for such situations, or are they solved with e.g. NDAs when necessary? I'm looking for a general perspective, but the laws of any specific country would be interesting as well.

Edit: Just to clarify, I'm not currently in this situation and I'm not planning on using anything belonging to a company to gain an advantage. Rather, I'm interested in knowing whether potential employment in a company would make me unable to continue with a personal project within the same field. I understand I'll have to investigate thoroughly and discuss it with them before getting myself in such a situation.

closed as off-topic by gnat, JazzmanJim, The Wandering Dev Manager, scaaahu, OldPadawan Jan 21 at 13:14

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  • "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – gnat, The Wandering Dev Manager, scaaahu, OldPadawan
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    In my job you have to sign a "disclosure agreement" with my day job, to make sure there's no conflict of interest, then they let you, so it might depend on your employer. I'd say "ask for permission" basically, why not make sure things are out in the open, in the up and up :) – rogerdpack Jan 18 at 13:46
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    Answering questions about laws require you to specify the country. – mhoran_psprep Jan 18 at 13:58
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    It could be seen as a conflict of interest regardless of local laws, or NDAs. It could get you fired or into legal problems should your employer decide to pursue. Best to ask permissions. – Dan Jan 18 at 14:00
  • It's usually OK to do other software work as long as it's not likely to compete with the company's own line of business. But, ask because "usually" does not mean "always" - this is a question for your manager and/or HR. Get written permission before doing anything. And if you do go ahead with this, make absolutely certain that you never use your employer's code, time, software licenses, or equipment for your freelance work (and be ready to prove this if necessary). – BittermanAndy Jan 18 at 15:36
  • Forget it. You will never get away with it. – Fattie Jan 18 at 16:31
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In majority of workplaces this would more than likely be classed as conflict of interest.

It's probably best that you talk to your manager about it and see what they have to think if you were to debate starting it.

As well as this you could potentially look what it says in your contract, usually specified by the company when you join but you will just not be told as it's pretty much the norm.

Do not attempt this before you know for certain, it may lead to you losing your job or even sued if they find out you've been using any of the "company's software".

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    In addition the OP will have to check his employment contract to see who owns the IP of any work he produces outside of his day jobs. I have head of some contracts where the company basically owns anything that you produce. – Peter M Jan 18 at 16:01
  • And if they give their permission, get it in writing. – Vylix Jan 19 at 2:17
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New info:

Rather, I'm interested in knowing whether potential employment in a company would make me unable to continue with a personal project within the same field.

Often this is not an issue. But some places don't want you doing paid work for anyone but them.

Just ask them in your interview.
Ask at the end when they say, "Do you have any questions for us?"

Say something like:
"I have some paid freelance projects. I don't see any conflict between them and this position because I can fully support them in my off hours and on weekends.
Would you ask me to drop those clients if I accepted this position?"

Phrased this way you aren't issuing a demand, you are just requesting information that will help you evaluate this position / their offer.
If I was asked this by a candidate, I would have a more positive impression of them.

At the first interview you are asking this early enough that there is a lot of flexibility. For example if they normally prohibit all outside work on general principle, they may be open to writing you an exception that allows you to work for the disclosed clients without getting into trouble - because allowing you to support something existing is different (to them) than an employee asking to start an outside project.


Original answer:

To avoid losing your 'day job' I recommend you check check any documentation available (employment contract, company policies, etc.) and then check with your manager.

I am wondering whether there are any restrictions regarding whether it is possible to do freelance work or have a "hobby business" doing practically the same thing as a company you are employed by full time?

Aside from company policy... I think this would mostly depend on the situation.

It might be a problem if you're doing work at a company that does web sites for other people, and you go get your own clients and do the same thing freelance. You could be perceived as taking potential business away from your employer.

It might be fine if you work on your company's web site and you did "practically the same thing" by working on another (non-competitor) company's web site - generally there would not be a problem...
Unless you do something stupid do something I would not advise, like working on that 'freelance' web site from your work or use your work equipment during the day when you should be doing your day job.
I mention this because I have seen people (not "a person" but multiple people) do that.

  • Forgot to add geography which you asked for... my advice comes from my experience in the US. – J. Chris Compton Jan 18 at 15:52
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Many US software jobs require agreements that all intellectual property you produce is the company's. If you've got freelance clients, then you're creating stuff for them that's copyrightable, and hence IP, and you may have no right to let them use what you create for them. See Joel on Software for an account of how this stuff tends to work. Some, not all, US states have laws saying that what you produce outside work time with your own resources that doesn't relate to your day job is yours.

It's possible that the courts in your state (if it has such laws) will determine that, say, making web sites for freelance clients is OK because your employer sells sporting goods, even if what you do for them is make the web site. Don't count on it, at least not without consulting a lawyer. If you were a DBA at work and writing technothrillers in your spare time (my wife knew a guy who did that), you'd be on safe grounds in a state with such laws.

What you need to do is specific for each employer. At an interview, you can ask about their policy on side projects, and whether it's formal or not. If they've got a written policy that what you do in your spare time is yours, you're good to go. If you can sign an agreement to that effect, you're good. Aside from that, the fee to consult a lawyer is going to be a lot less than what you'll lose if your employer decides to come after you. Just being in a lawsuit is expensive and unpleasant, so you want to make sure there's no doubt about losing a lawsuit, since that means it might be profitable for the company to sue you.

You've got a personal project in the same field. Make sure that the work you've done before getting hired stays yours. Frequently, this is mentioned in a written agreement with the company. If not, consult a lawyer.

This is not what most developers want to hear, but that's the way the software business works in much of the US.

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Check your contract.

...plus the obligatory:
legal advice is valid from lawyers, not from a more or less anonymous internetforum.

If your case is not covered by your contract or company policies you're usually good to go.

That's why many contracts include exclusivity or non-compete clauses.

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