I have an idea that I would like to pursue and possibly make a business out of in the future. However, I am not at the stage where I am willing to quit my regular job and make myself a full-time entrepreneur (At this point, it is just at the idea stage; it is entirely possible - perhaps even probable - that nothing will come out of it. I just want to make sure that, in case it does happen to go somewhere, I do everything right right from the top.). What do I need to document to minimize the possibility that I will get into any legal confrontation with my current employer regarding my idea?

Details: I work in the United States, my employee agreement states that anything for which I do not use company property and/or company time, as well as anything that doesn't directly compete with the company's interest is mine to keep. I will be following this agreement (i.e., I will not use any company property or time, my idea doesn't compete with the company's interest), but need to know what sort of documentation would evidence that.

  • 1
    Is it software or hardware or something else? Software is fairly easy if you just keep all your notes and work from inception to completion showing that you're not just copy/pasting from elsewhere. Hardware can be accomplished by patenting (this can take a long time though) and building with your own parts not your employers. But you can start marketing and selling even while the patent is pending
    – Kilisi
    Nov 7, 2015 at 22:04
  • Version control everything. Use an external paid-for private repository, in case your own hardware fails. Make sure to use separate hardware. Make sure you pay for your own internet. Don't work on your sick days. Remember, everything leaves a digital trace. Time stamps, id numbers, default user names, license keys, hidden metadata, ip address logs, etc. And finally, if your venture works out, don't tell your colleagues about it. The less they know about your venture, the better it will be. Nov 8, 2015 at 4:38
  • If you are looking for a legal analysis and not "how to navigate the workplace", you will likely get a better answer on law.stackexchange Nov 9, 2015 at 15:35

2 Answers 2


need to know what sort of documentation would evidence that.

If it's hardware keep the receipts for parts, blueprints and model. Do not use anything belonging to your employer and there shouldn't be an issue. Hardware is easy because normally you wouldn't work on it at your job. A patent is perfect if you go that track, but it takes a long time, however you can still market and sell your product with the patent pending.

Software is a bit harder because you could theoretically work on it at your job. So do NOT do anything on your work computer at all that has to do with it. Keep everything associated with your software backed up from your original concept design on the back of the Electricity Bill, to your completed product and all intermediary steps. Most things digital will be timestamped and can be checked that way if it ever comes to that.

If as you say you won't be competing with your employer I don't envisage you ever needing to produce any of this evidence, but it's all good stuff to have for many other reasons anyway.

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    Having a patent doesn't protect your from your employer claiming that you used company resources. The patent just said that you were the first one to file the paperwork. Nov 8, 2015 at 13:07
  • @mhoran_psprep That is correct. Nothing prevents your employer claiming anything they want, but a patent would mitigate a lot against their actually being able to take you to court and winning. It's just a part of the documentation that one should have.
    – Kilisi
    Nov 8, 2015 at 19:24

So you may have to seek the advice of a lawyer to understand the particular legal aspects of contract law in your state, for your circumstances, etc.

However, generally speaking you have a contract with your employer which sounds like it makes one of two claims (or both):

  1. Any work you do using company resources (on company time, with company materials and/or company equipment) the company has claim to.

  2. Any work you do using your own resources (on your own time, materials and equipment) they do not have a claim to.

This means that in order for the company to lay claim to your work they have to be able to prove that you violated the contract. You do not have to prove that you did not violate the contract.

So if you use their equipment you can expect there will be some evidence of that use. If you use their materials, it may be noticed that materials went missing. The use of "time" may be difficult to prove either way, but if you use "company time" and there is evidence of that, then you should be concerned that you will lose partial or full claim to your idea.

The key here is to have separate resources for your idea (computer, equipment, materials, etc.). Also, you should avoid performing any work for your personal idea while on your employer's premises, as this could be considered use of their resources such as "employer paid time" due to your presence there.

Also, if you have a good relationship with your employer then it's possible that you should make your idea known to them (or simply that you have a personal project you are working on outside of work with commercial potential) so that you can discuss the boundaries of your contract. You may also be able to contact someone in HR to express that you have an idea and you want to be sure that you follow your contract appropriately.

What the contract fundamentally does is allow them to have recourse in situations where someone is using company resources for personal gain. In situations where the employer has essentially purchased that employee's time and dedication, and the employee has not provided their time and services as expected, the employer needs recourse. If someone is causing wear on equipment, using parts or supplies from the employer, then the employer is subsidizing the employee's personal endeavors and the company should be compensated.

One of the trickiest points here is that as you pursue this idea, you may find yourself distracted at work. You may also find that you need to take breaks you would not otherwise have taken, or attend to "personal business" during normal business hours. This is typically why employers have these clauses in their contracts, because these distractions may not be significant enough to terminate an employee, but still are a real cost to the company.

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