May 23, 2019

Bootstrapping despite employment agreement


Currently, I’m a full time web developer for a software company. I am in the process of researching ways like many here to leverage my coding skills to go it alone and build my own business. So just go do it right? Well not so fast. It’s not for lack of ideas or motivation or fear of taking that first step.

Turns out I signed a handbook agreement with my current employer and in it, it says I must disclose any outside business to my employer. It says I must notify my manager in order to allow them to “determine whether such employment is a conflict of interest.”

To be clear, my intention is not to build a business in the same space (a competitor) nor is it to poach customers aware from my existing company. I simply want to get started in a small unrelated niche space.

My thoughts are to create a blog or a mailing list to gain traction and see if there is an audience that would even entertain my idea. My motivation would not be for financial gain thereby not violating the agreement with an outside business per se. But building a mailing list and getting actual paying customers are two separate things.

Has anyone else out there been in a similar predicament? Is there anything that can be done to prove my business model would work before quitting my day job?

  1. 5

    I also had a clause like that. I suppose next to the conflict of interest part, it is also because they want to know that I'm not overworked because I have 2 jobs or so (which I guess also is a conflict of interest).
    Anyways, I requested a letter that states that I'm allowed to work outside of this contract on my own stuff and create my own business. The earlier this thing is settled, the better.
    You don't want them to come after you 3 years after you've left the company and they say "Hey, that side project that you sold for 150.000 US$, when did you start developing it? Was it while you were employed with us?"

  2. 4

    When I held a dayjob, there was a "no moonlighting" clause in my contract. They say they don't want employees working during the day and at night at another job so they don't get exhausted for next day's work. (But come on! I mean, like what kind of moonlight work would their engineers do at night? Security guard, McDonalds crew, cleaning and sanitation crew, to-go chinese food delivery?) -- it's absurd.

    So yeah, I did moonlight on my own business idea after work and weekends. My personal defiant reasoning was my company should have paid me more, otherwise I wouldn't have thought of this side gig. And when income became way bigger than my paycheck, we finally bought a house, then quit my day job, bought a new suv, in that order, LOL.

    And still doing the same thing to this day, still working at home in my own biz after 19yrs. And what happened to my previous employer? Yup, they're gone... closed shop during the 2008 financial crisis when construction projects dried up.

    Now, imagine if I would have stayed there? I would have been out of a job also, with no fallback and no safety net for my kids and family! Me and family would probably still be renting an apartment if I stayed there and not moonlight because "it's in my contract."

    So look out for #1, and on what's good for yourself and family. Screw them. They already owned you during the day, they couldn't own your thoughts and ideas after work. They're not paying you 24 hours a day. Only 8 hrs.

    ** This is not legal advice on what you should do. Just think what's the worst that could happen, and what's the best that could happen to you? And are you willing to be a slave for your employer? But that's just me ... good luck!

  3. 2

    Check your state laws -this clause might be unenforceable.
    Does it apply to what you do with company time and resources or to anything you do anywhere any time? Can be either, but worth checking. If the former - then just do your thing on night and wknds on your computer. If the later is true - then try to approach your manager and tell them that you want to try your hand in a few business ventures with your friends on a side, and you’d like to get something in writing from the company to make sure that no one gets in trouble in the future. Try to be as vague as possible and frame it like your desire to have profitable hobbies. Try to get a sing off to do anything that doest compete with company’s business, and not just one very specific thing. I’ve actually done that once - had a CEO write an amendment to my non compete just after I started. He was cool about it.

  4. 2

    [Not a lawyer]

    Pretty standard stuff. I just ignore mine. Just don't work on it EVER at work. Even answering emails etc on your phone on the company wifi.

    Certainly wouldn't let you stop exploring things.

  5. 2

    When I worked in MS I had something like that. But the agreement was just all the code I was writing belonged to MS. So, I didn't feel free to make money on it. But nevertheless, I tried many times to create some businesses. I failed but because of other reasons.
    What I'm trying to say. You can start anyway. It's not necessary to disclose your identity right away. You can wait until you have some result - like a couple of paid customers. And, as soon as you see your idea may take off - quit your job.
    Good luck.

  6. 1

    I was in a similar position recently. It was a VC funded startup that came with some contractual handcuffs. Besides the usual non-compete, the contract also prevented me from founding another business in the first 5 years. Money got a bit sketchy so I started a box as an escape capsule. Also became a place to put new business ideas until I'd worked out my contract. It was an interesting journey but I never go down that road again. Wrote about it here.

  7. 1

    I’m not recommending this nor do I know the legality of it but “gee my husband/wife built this amazing business at home”. I know someone who did that for tax purposes.

  8. 1

    Use an incognito window

  9. 1

    I’m working for Microsoft. So we have similar agreements. I must inform and get permission to moonlight. As I’m on parental leave, it was easier to make a case why I want them to sign my moonlight agreement, but I got some eyebrows...
    Still, I’m much more comfortable to play with open cards and know I took the legally right steps.
    Until now, I would not even have needed that agreement as I’m not making any money yet from my side projects. But, as my work is visible (newspapers, social networks etc.) it feels good that I informed them beforehand.

  10. 1

    I probably would even pay it much mind, but would be extremely careful about using company computers / assets when doing any of your side stuff. Time theft is real, so don't be that person.

    The reality is, nobody's going to come after you until you're successful, so if they were to come after you, you probably did something right.

    If you are really concerned with it, I'd roll the dice and disclose your intentions to your manager and see what happens. If they were to actually fire you for starting a blog in your free time, they probably didn't value you as an employee to begin with.

    In that scenario, you're probably better off.

    Source: I've always run stuff on the side while having a day job (some with questionable employee agreements in regard to owning "any and all" inventions inside of work and out).

  11. 1

    This comment was deleted a year ago.

Recommended Posts