One of the most exciting aspects of business life in Silicon Valley is the creative and innovative culture of startup businesses. For many new entrepreneurs, a startup business is a moonlight project that occurs while he or she is still an employee of another company. Moonlighting presents both advantages, as well as legal complications which can threaten both the startup business and the entrepreneur’s current employment. Moonlighting can help entrepreneurs manage the personal financial risk of starting a business with the comfort of knowing the entrepreneur is still receiving a paycheck. Consult with the experienced business attorneys at Startup Company Counsel to ensure that your moonlight activities are compatible with your daytime employment.
Some of the Legal Considerations Involved in Moonlighting
Moonlighting is a great way for an entrepreneur to start their business; however, it can create many potential legal problems with your daytime employment. It is important to remember that every situation is different, and it is best to consult with an experienced business attorney about your particular situation. Some of the most common legal considerations to think about before moonlighting are as follows:
Non-Compete Agreements: Most businesses in the technology sector are highly protective of their products and designs. Many employers protect this interest by requiring employees to sign a non-compete agreement, despite the fact that California courts do not recognize these clauses. Non-compete agreements can restrict an employee from working for specific competitive companies or with specific technology and products. Non-compete agreements, in order to have a chance in a California court, will have a set period of time or defined geographical area, and be narrowly drafted to only act while the employee works for his or her employer.
Intellectual property rights: Technology businesses are protective of their products and designs, and they are also quick to enforce their intellectual property rights. An invention assignment agreement typically states that any software, hardware, system, design, algorithm or other technology minutiae you create within the scope of your employment will remain the intellectual property of your employer. When considering moonlighting, an entrepreneur should be sure to look at their employment documents to verify they will not be infringing on any intellectual property rights. An experienced intellectual property attorney can help to protect your startup and avoid intellectual property infringement by providing insightful legal counsel on your employment documents.
Miscellaneous Terms in Employment Contracts: Generally speaking, companies are fond of lengthy, detailed employment contracts. In addition to non-compete agreements, you may also be subject to other random terms which apply to your moonlight activities. For example: some contracts provide that any honors, prizes, publications, etc., remain the property of the employer. Participation in a coding contest could, therefore, give your employer a chance to claim that it is entitled to the award, or that your design won the contest.
Contact A Silicon Valley Business Attorney Today
Starting a business is never easy and it becomes even more complicated when you are moonlighting, or maintaining employment elsewhere. Each moonlighting scenario varies and factors applied to one entrepreneur and his or her employers may not apply to another. Let the knowledgeable business attorneys at Startup Company Counsel ensure both compliance with your current employment and success in your startup business venture. Call our Silicon Valley attorneys at (408) 441-7555, or use our online contact form to schedule your consultation today.