"Now that you mention it, I'm not sure I want to employ someone who uses their creative energy for anything except the company's business."
Wow. That statement alone tells you everything you need to know about that person and what kind of manager they are. The fact that it was the founder is just...wow. Since it was the founder, if I was in your shoes I would have asked this fool if they took that same approach when they ever worked for someone else - that they never did a single thing that was creative outside of work. Yeah, we know the answer.
Also - "We'd never exercise that right. But we reserve the right." Don't believe that for a minute. My father once worked for a fortune 500 financial company (but he was an IT person) and his hobby was music. He self-produced an album. A little while later they let a bunch of people go who were all 40+. He declined their package so that he could sue them for what was clearly age discrimination. That company then tried to claim that everything he did in his free time was owned by the company and they counter-sued him for royalties related to album sales and public performances. Keep in mind his contract did not include any of the draconian language like what you turned down. The only thing it said was that he was an "on-call" employee who needed to make sure he was available on short notice for systems-related emergencies. So they used that to say that because he was "on-call" they therefore owned every single second of his existence.
It never fails to astound me how such a perverted interpretation of the law can go unregulated.
In the past people would coerce you into doing things by surrounding themselves with big strong men. All that's changed is the now they surround themselves with suits and it's supposedly legal.
Cool, so I get all those years of back pay with OT. Feel free to deduct the $10k royalties from the hundreds of thousands you owe me. Every time I thought about music, wrote music, played or practiced music, I was on the clock the entire time. Thanks!
No, but it sounds like he knows about this stuff all too well. His final scenario is essentially what happened to my father:
"We are kinda indifferent. If you piss us off, we will look for ways to make you miserable. If you leave and start a competitive company or even a half-competitive company, we will use this contract to bring you to tears. BUT, if you don’t piss us off, and serve us loyally, we’ll look the other way when your iPhone app starts making $40,000 a month."
FYI - my father's situation happened about 20 years ago in the late 90's.
I used to respect him, but that post is so wrong on so many counts regarding US IP law and "work for hire" stipulations that I couldn't get myself to finish reading even half of it.
"be careful before taking legal advice from the Internet." - Indeed, Joel. Indeed.
Your critique would be much more useful if you explained what he's wrong about. As someone who has done a small amount of contract work in my career, his summary broadly matches my personal understanding.
- He says that contractors "by default" own the IP of the work they do for their employers. This is actually exactly the opposite: "work for hire" means that the employer owns the IP by default: http://contently.net/2013/07/09/find-work/work-made-for-hire...
- He glosses over / minimizes the fact that most of these "invention assignment" clauses are doomed in a court of law more often than not (even ignoring the states that outright prohibit them) if they do not fall within the scope of employment (sorry, I don't have a reference here, but I have heard of many such cases being thrown out in court)
As a business owner, he comes across as having a very clear agenda which is at odds with the reality of the law and the actual outcomes of these cases in court.
That link and Joel seem to agree. By default the contractor owns the IP, unless the contract contains the legal phrase "work made for hire." Maybe you should have kept reading?
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.
I think I was probably misremembering my experience as a software contractor, in that I don't think I ever signed a single contract that did not include the "work for hire" stipulation.
My takeaway from the post was it isn't so much that he thinks it's fair but a legal necessity to protect the company. More of a criticism towards how current IP law is structured.
> he thinks it's [...] a legal necessity to protect the company
Exactly, which is why his post is totally self-serving propaganda.
Though he tries to present the post as "here's a totally objective explanation of how side projects interplay with employment law", ultimately his point comes down to Business owners have all these complicated issues to deal with, so just accept the fact that they're going to screw you over, while they make millions of dollars
There's no credibility given to the fact that companies have choices here and there are other options that don't screw over the employees - those options are too hard, and they might introduce legal risk to the company, or (!gasp!) scare away investors.
It's just accepted as given that business owners must do whatever it takes to protect their company's interests and employees should shut up and deal with it. Employees carry the legal and financial risk because it would be inconvenient for the company to do so.
The company is simply acting in its own self-interest and it's not actually trying to screw you (probably), that's just an irrelevant side-effect that they might take advantage of in the future when they do want to screw you.
Now that know that you understand that, you're totally cool with it right? It's just business.
I don't think Joel is intentionally trying to be manipulative. I think he honestly believes all of that. As a business owner he's dealing with all those issues and he thinks he's making appropriate choices and has no particular intention to screw over his employees. The purpose of the post is so that everyone can see that he, and business owners like him, are not a bad guys - they're just acting rationally and you only thought you were getting a bad deal because you didn't understand the choices they're making.
He also mythologises his example: making a video game is a moment of inspiration. No slog, no rewrites, no iteration. Just 'inventions'. I'm guessing that his example company wasn't paying the contractor a full year's salary just to sit around and wait for four 'inventions' to just pop into her mind.
"What are you doing sitting there just cruising the web, Ms Contractor" > "Oh, I'm just waiting for this quarter's invention to pop into my head. Thanks for the payslip!"
This is a good point. IANAL, but I imagine there definitely are routes to take when drafting various legal documents (e.g. employment contracts) that would allow employees to pursue personal projects. Its likely just easier (and as you say in the company's best interest) to avoid figuring out how to word such clauses.
He doesn't advocate for or against either position. He's stating the current (awful) facts about side projects when you've signed a contract, and telling people to be careful.
The thing is, my company probably doesn't want my side projects. I'm not just a programmer; I make music, photography, art, etc. If they owned that stuff, it would just wither away in a dark corner because they wouldn't have any use for it.
Now extend that same concept to programming: I make games and digital interactive art in my spare time too. Should I really be forced to give it to my company where they will promptly throw it in the garbage? Or should I be allowed to make it and share it with the world independent of my corporate life?
I'd counter with attempting to reclassify as non salary exempt. Most IT work isn't salary exempt and thus as I am perpetually "on call" I have to be paid for every second since I started working for you.
Eh, I can see it. Any company where potential new hires directly negotiate with the founder is one where the founder is waaaaaaay too hands-on for comfort. A founder who's that involved in the day-to-day is likely to be exploitative.
Wow. That statement alone tells you everything you need to know about that person and what kind of manager they are. The fact that it was the founder is just...wow. Since it was the founder, if I was in your shoes I would have asked this fool if they took that same approach when they ever worked for someone else - that they never did a single thing that was creative outside of work. Yeah, we know the answer.
Also - "We'd never exercise that right. But we reserve the right." Don't believe that for a minute. My father once worked for a fortune 500 financial company (but he was an IT person) and his hobby was music. He self-produced an album. A little while later they let a bunch of people go who were all 40+. He declined their package so that he could sue them for what was clearly age discrimination. That company then tried to claim that everything he did in his free time was owned by the company and they counter-sued him for royalties related to album sales and public performances. Keep in mind his contract did not include any of the draconian language like what you turned down. The only thing it said was that he was an "on-call" employee who needed to make sure he was available on short notice for systems-related emergencies. So they used that to say that because he was "on-call" they therefore owned every single second of his existence.
You can't make this shit up.