Negotiating contracts with carve-outs for advising/consulting for startups?

Nicholle1·Dec 04·9 replies

Hey there! In employment contracts, ya know how they often have clauses saying that all work you do belongs to the company? How have you handled situations where you want to advise or consult with startups after-hours? (Which are NOT competitors to your employer.)What has been your experience with either:(a) getting a contract carve-out, which feels really awkward because they want to know your time/focus is with them and not on other things(b) just not mentioning itWhat if you don't know right now what those startups may be, if the opportunity arises once you've started working? (a) then get explicit permission(b) don't mention itThanks for your advice!

HannahBaldovino·Dec 04

Wow great question. Posting to follow and see responses!

teresaman·Dec 05

Hmmm - I personally have never seen this clause before (but also, have only worked at fairly small companies). Is it ALL work you do during the term of your employment (is this normal?? seems largely vague and unfair) or work that you do with company-supplied devices or on company properties that they will now claim as their intellectual property?

Demetria120·Dec 05

I'm trying to figure this out myself. Following...

CourtneyWebster·Dec 05·1 reply

Hi! Just to clarify - you are saying you have a contract that everything you develop at your current place of work (aka, full time job) belongs to the company. But you want to start consulting/advising on the side, right?I am NOT a lawyer (and it would be worth your time to go through this with one), but here's my high-level understanding having recently started consulting and also dealing with terms of a former employment agreement. Also having been in situations where people are building their own company ideas under the broader umbrella of a university like Stanford, who does take these in-house IP things seriously: I would be more careful of the anti-competition areas of your employment agreement - aka, consulting for competitors, etc. You're already aware of that!My general understanding is that the IP you create while at the company is limited to what you create while using the company's resources. So even if someone isn't directing you to make something, if you are workshopping it by using your employer's materials, they may have a claim to the rights. It would be worth seeking a professional opinion on how strictly people take this with regards to something like work computers because most people use their work computer for personal stuff too. I have friends many years ago who took pains to only work on their ideas offsite using completely separate resources (computers, notebooks, etc), but that might have been overkill. Check out NeedHop : https://www.needhop.com/search?q=LegalYou can pay for an hour of someone's time to go through this. I went to an event where Jennifer J spoke (she's on NeedHop) and she seems awesome, though may be more suited to negotiation and you may want someone with experience in IP. I have a friend in IP law so I'll ping her and see if she has anyone to recommend for a short-term consult (this is something I'd like to have in my rolodex as well)!Or, I saw this posted on another founder forum - free office hours with Carpenter Wellington: https://carpenterwellington.youcanbook.me/You may find other free IP lawyer resources through a local university, accelerator, or small business support organization. Good luck!!

Nicholle1·Dec 07·1 reply

Thank you so much Courtney!

CourtneyWebster·Dec 14

No problem! I do have a person I can refer you to directly. Do you want to message me directly within Elpha and I can share her contact information?

LVLUPLegal·Dec 06·1 reply

Hi! This is a great question. Generally, depending on the position, all of the work you do for the company while employed is considered "work made for hire" and belongs to the company. However, often times employers will allow you to list certain projects you are working on prior to being hired or carve out this clause if you are a consultant. Either way, you should definitely address this prior to entering into any type of employment agreement. For example, if you work in digital marketing, all of the work that you do for the Company that they pay you for belongs to them. However, if you are a digital marketing consultant and you develop a certain business technique that you want to utilize with other clients, then beyond the deliverables you provide to the Company, the business technique you developed should belong to you as your IP. By way of background, I am the Managing Attorney of LVLUP Legal (www.lvluplegal.com), and I often draft, review, and negotiate employment agreements that include these types of clauses. If you would like to set up a free consultation to discuss this further, feel free to send me an email at contact@lvluplegal.com.

Nicholle1·Dec 07

Thank you so much!

MorvareedSalehpour·Dec 07

I am a lawyer who works with clients who have side-hustles/consulting gigs in addition to their employment. It can be a delicate balance and applicable laws depend on where you are located. If you are in California and need counsel, feel free to reach out to me msalehpour@salehpourlaw.com