Should I sign that employment contract?

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Dear Evil HR Lady,

I recently joined a young software company. I love the company, and my boss is great. The only thing that worries me is the invention agreement I've been asked to sign. It says that anything I create, even anything off company time and without company resources, is theirs. I'm happy to give them anything I'm paid to create, but I feel like anything I create on my own time with my own tools should be mine. How do I avoid signing something I might regret without starting off on the wrong foot with my boss?

First of all, you are very smart for having read and thought about the agreement. So many people just sign whatever their employer puts in front of them. And employers often put overly broad clauses into their contracts. Why? Because they can. It's certainly easier to win a court case when you have a signed document showing that they own your entire brain for the entire time you work there.

What's the risk of signing this type of a deal? I asked employment attorney Donna Ballman, author of "Stand Up For Yourself Without Getting Fired," how legally enforceable these agreements are. She said: 

These types of agreements are very dangerous. The case involving the guy who designed the Bratz dolls against Mattel is a good example. Mattel sued him because he did some preliminary designs while he still worked for them. They won, shut down the whole Bratz operation, and the dolls disappeared for awhile. Then the Bratz folks won on appeal and they're back in business, but it took millions of dollars in fees and cost them millions while they were shut down.

I always ask my clients if they write novels, design video games, paint or do anything at all creative. Even if they blog or tweet about a specific topic, it's a concern. I suggest they ask for an addendum excluding anything specific that they want to continue to own. If, for instance, the gentleman asking you the question designs software that's unrelated to the software his company designs -- such as if they design accounting software and he designs architectural design software on the side -- he needs an exclusion. Otherwise, his employer will make a grab for it if his software makes any money.

So that's what you must do -- get an exclusion. But how to do it without causing ill will? First, start with the fact that you enjoy working there and your boss seems like a great guy. It's possible that as a "young" company, they just grabbed boilerplate language and didn't really give it any thought. And keep in mind that it's a huge pain in the neck for them to replace you, so they are motivated to keep you at least somewhat happy.

Second, don't get defensive. Just tell your boss that you need to take the agreement to your attorney for review. This really should be standard before you sign any legal document.

Now, your boss could well say, "Oh, just sign it. We never enforce it." This may be absolutely true. But the reality is that once you've signed on the dotted line, the company can enforce it. Your current boss could quit next week, and the next one could choose to enforce it. Never, ever sign it if you're not willing to live up to every word of the contract.

Then take the document to an attorney, preferably one with experience in employment law. Get the changes you need made and take it back. Remember, this is a business transaction. It's not personal. If you approach it in a business-like fashion, then people's feelings shouldn't get hurt.

Of course, there is a chance your company will reject any proposed changes to the agreement, in which case you'll have to decide whether or not the job is worth it to you. But as a general rule, most people are willing to negotiate. Don't act as if you have no power in this relationship. You do have powerm and it's important to be confident.

For further reading:

I refused a job transfer, now what?
Why your HR department is unfair
When illegal interview questions are legal

Have a workplace dilemma? Send your questions to [e-mail].

[gauravdp]

There's no end to this.
Due to the shape that Anglo-Saxon capitalism has taken, employees have absolutely NO protection whatsoever. There's the token pretense of non-discrimination on the basis of age, orientation, race etc but it's very difficult to establish a case based on such premises if they actually take place. Employers can pretty much do whatever they want and get away with it.

And so, coming to the topic, the obvious answer would be to evaluate options. If the employers do have a signed contract acceding to these terms, they can and WILL enforce it if they see fit. Otherwise, what's the point of drawing up a contract and presenting it to the employees if there's no intention of enforcing it? The employee should consider verbal assurances as not worth "the paper they're written on". If they agree to rewrite the contract restricting their claims to inventions created on the employer's time or using their resources, then fine. Otherwise it may be time to consider other employment options if such a leverage is possible.
The way things are moving, soon employers may claim rights on the employee's inventions for the rest of his or her life, even after cessation of employment.

[vlb-2008]

This is fairly standard but you need to get an exclusion. Talk to your manager. If he's sensible, there won;t be any issue. If not, now is a good time to learn that.

You may need to put in some language about non-competing, e.g. if your ideas are similar to things the company works on (Company resources can include technological information and Trade Secrets as well as hardware).

Also, be careful. "Company resources" have traditionally been considered to include physical paper notebooks!

[smartistartist]

An old boss of mine tried this with me. I am an artist & was a graphic designer for him. He presented me with a contract one day stating that everything I created on my own (including gifts I were to paint and give for FREE to someone) were property, and copyright of his company and he was entitled to a royalty from them. There was no pre-warning of this and I refused to sign. It got so heated that I planned on quitting. I was offended very deeply by it. Especially that he knew I was working on a painting (at home on my own time, with supplies I purchased at his business) for my parents for a gift. In this contract it stated that even though I was going to give this gift away, I needed to have it appraised first and pay HIM a percentage out of my OWN pocket for royalties! He recinded the entire contract after I told him I would quit if forced to sign it. I left his company shortly there after:(