Employees working on their own business

I practically rewrote every IP "agreement" for nearly every job I had since I started working in industry (ca. 1965). The terms were more or less as follows.<p>1. I am in the business of invention. I invent many things. I cannot possibly disclose all of them. Hence, ANYTHING I have done in the past is excluded and ANYTHING I will do after I leave your employ is excluded without having to be disclosed. This is true even if the thing invented can be construed to be directly or indirectly connected to your business. The only exception to this will be those things directly and explicitly connected to your IP disclosed to me during my employ for a period not to exceed two years after my departure for un-registered un-patented IP. Normal patent and copyright laws apply - BOTH ways.<p>2. What I do 0n your time with your equipment on projects specifically assigned to me is yours.<p>3. What I do on my time with my equipment on my self assigned projects distinct from yours is mine.<p>4. Since my business is invention, if the invention was concieved on your premises but is not DIRECTLY connected to your business, your disclosed IP, and your assigned project, the invention is mine. This will be true even if the invention is used to indirectly support project. In that case, a non-exclusive license to use will be granted by me to you but I still own the resultant IP.<p>Almost without exception, the terms were accepted. Where there was substantial disagreement, I looked for another job/contract.

Judge him only on his performance. If you can't do that then you are a bad employer. His work performance is what you pay for. It's up to him to make sure he delivers on that promise.

I do completely understand why an employer would own the employee's work if it is related to the job and was completed using the employer's equipment... but it still worries me, as a developer, and as a consumer.<p>I figure the public has an interest in promoting as much innovation as possible. This means that we want employers to be able to hire employees to work on innovative projects, but we don't want to discourage employees from working on projects on their own either. So if this relationship gets out of balance, we could end up stifling innovation from one side of the relationship.<p>Think of it this way... suppose I'm a house flipper. I mainly do this on my own time, but I do search the web for properties, email friends about investment opportunities, and call mortgage brokers while I'm at work. It's not a huge time sink, probably no worse than the random goofing off or reading hacker news that goes on at work.<p>I doubt a court would allow my employer to "own" my profits from flipping houses.<p>Now say I have a side programming project. I mainly do this at home on my computer, but occasionally I think about it at work, and I have fixed bugs, sketched out an algorithm, or tested the site at work, and I did write a bit of code on my work supplied computer.<p>In this case, I suspect the courts (IANAL, of course!) would award ownership to my employer, even if the project is unrelated to my work tasks.<p>So basically, the law does encourage programmers to start side businesses in areas unrelated to technology... but don't we want programmers to innovate in their field of expertise? Personally, I'd much rather see programmers writing innovative applications than flipping houses.<p>I don't have an easy answer for it, because like I said earlier, I also do see a clear need to provide IP ownership for investors employers who are paying employees to innovate. But I'd draw this line more narrowly - no big surprise, since I am a programmer "employee" myself, and these rules would favor me.

The employee running his own business is going to be somewhat distracted, just like an employee with a family or kids. It's something else that is more important than his job. The thing is, an employees interests don't exactly align with the business owners interests. As a business owner, almost everything I do is focused on growing that business. The closest you can come to that in an employee, really, is a single person who is really into programming. these people will have hobby projects, but that's ok, especially if they can be things kindof related to technologies your business uses. Like the SysAdmin who writes apache modules.<p>That said, you don't always just fire people when they get married. the question, simply, is 'Is the employee, with all his or her distractions, still worth his or her salary?' - Most of us are unwilling to remain single and completely dedicated to our jobs for our whole life. Right now, for instance, if you want to hire me, you have to put up with my business being my primary focus, otherwise I won't work for you. (but then I'm a contractor, so that's not unexpected.) And just imagine the outcry if you acted against people who valued their family over your business.

My gut reaction would be to just let it be. Telling him that he can't sell it will lower his morale and possibly hasten his departure for a firm that doesn't mind (or for the project itself should the income prove to be at least enough to live off).<p>Does the item have value? He might be interested in selling it to you. If an employee likes his employer, they won't mind giving you their work for a little bit of money. You can always branch out into new areas.<p>Unless you're willing to make the employee a partner at your firm, I don't think there's much you can do that wouldn't seem "evil" and you don't seem like the evil boss type. If they're a partner at your firm, they get to direct the firm to an extent and share in its profits. If they're just a wage laborer, they will leave when something better comes along and that's one of the costs an employer must beat - and similarly the employee must bear that they cannot be paid the full value of their output as a wage laborer.<p>I'd say just let it be. Most web applications don't go anywhere. Be supportive and happy for him. In the case that it fails (or makes a few hundred dollars a month), he won't be leaving you and you'll come off as the awesome boss who is supportive of personal growth and chill with stuff. And that will make him stay even longer.

He's doing it in his own time - end of. If he's really that good then I would invest in his idea. If he is losing focus then kick him out. There's no absolutes here, just depends on how he works.

"But obviously, there are a lot of issues involved."<p>The issue here is that you have an employee that's passionate about what they do (shocker I know). A trait that's rare and should cause you concern only because there's a good chance this developer will jump ship to pursue their passion full time on their own.<p>I'd try to keep them employed (for you) as long as you can by encouraging this 'free time' project which will hopefully also influence your other developers to take up their own pet projects.<p>It's not the project that is of value, it's the engagement of the mind that benefits you and the work they create for you.

I started working on my own stuff to keep on with technology and bring some fun into my life. I never stopped working on a side project; I do not mix my time at work (at my employer) and my side business. Today as a full time consultant I found it even easier to equally use my time at both my startup and my clients.

Am I the only one who's read the original issue as not the problem with extracurricular activities per say, but the fact that the employee now wants to sell one of those apps?<p>The employer said:<p><i>One of my employees is always working in small applications for his family or just for the fun of it. Now he wants to start selling one of those applications.</i><p>... and<p><i>I think that anyone can do what he wishes with his own time. But obviously, there are a lot of issues involved.</i><p>The way I read it, he's known about the side projects for a while and never had a problem with them. He is having second thoughts only because he's learned that the coder wants to make money off one of those projects...<p>I think that what's really happening here is the employer having a personal bias of the money-is-dirty variety. Obviously, anyone is welcome to whatever moral attitudes they like, but to force them onto your employees is completely inappropriate.

Since 1993 there were number of Anonymous authors in Linux Kernel <a href="http://lxr.linux.no/linux-old+v1.0/net/inet/sock.c#L50" rel="nofollow">http://lxr.linux.no/linux-old+v1.0/net/inet/sock.c#L50</a>

don't see what the issue is.

This can be really nasty for a small business. On the one hand, you understand the desire to build a seed for a software company, on the other you're dedicating scarce resources to pay this employee to work exclusively for you.<p>I'd tend towards overly-harsh on this one: You're either an employee or an entrepreneur. The choice is binary. We'd love to have you as an employee, but a person building their own business and riding on the salary we (a small business ourselves) pay while they do it is not welcome.<p>Every employer I had before heading off and starting my own company had an air-tight IP policy which basically owned my software-developing ass. That makes sense: You're either an employee or an owner, you don't mix the two.

I like to turn projects I am working on for clients into services I sell to new clients. It seems to work ok. My clients get better quality and I get more income without extra hourly work.

Ask him what would he do if he was in your position.