The Dangers of Moonlighting

18 thoughts on “The Dangers of Moonlighting”

  1. An amazing amount of your employee agreements are not enforceable, and many actually violate state laws. Every entrepreneur needs a competent lawyer.}

  2. Looks like I’ll have to be real careful myself as I am going through the same thing except that my employer is not aware that I am moonlighting as a founder of an Internet startup. Good info you provided.}

  3. Depends a lot on what state you are in, and, of course, what you’re willing to sign upon employment. In California, from what a friend in the HR biz tells me, the employee has a boatload of rights, and a company can’t really do much about someone ‘moonlighting’.

    As for the “IP” claims: they’d have to prove that, right? Not just that you accessed your site, but that you actually worked on it. I wish them luck.}

  4. It’s really important to read your employment contract. My original contract stated that the company owned any idea I had whether or not it was developed on company equipment or on company time.

    Read the fine print!}

  5. A few more lessons:

    6. Make sure your employer doesn’t know that you’re moonlighting, and that they can’t find out. Blogging about it is a bad idea. Using company email, or even personal email from work (employers can monitor what goes on your computer or through their network) is bad as well.

    7. Don’t tell about your doing to people you do not trust absolutely, especially if they’re employed by, or have any connection with your employer.

    8. After you quit (of your own choosing because the business is taking shape, and you’re employer doesn’t know anything so you weren’t fired), take a cooling period (e.g. 30 days) before you go public with anything (including blogging, telling people etc.). Your previous employer isn’t stupid – it’s pretty clear that you started working on your thing while working there. If you wait enough time then it’s at least plausible that you only began working on your idea after you quit.

    9. Next time, work for nicer people :)}

  6. Next time, do not take time you have agreed is your employer’s for your own use. Employers think of time as money. Can you imagine any employer thinking, “I will ignore this – after all, he only stole $60 from my pocket every week, for five months”. No, work part time, or take leave, or work four hours longer, rather than cheating on the boss, and risking loss of credibility, respect and reputation.

    And, of course, the old advice, recognize when it is time to leave a job you do not like or that is not a good fit, and leave before you ar thrown out!
    Good luck with your new venture!}

  7. Kipling, these are valid points, and I agree that an employer has every right to take necessary action when they feel that an employee is wasting time or not performing to the expected standard.

    Where I have an issue is when the employer takes it a step further by saying, “not only are we going to let you go without formal warning, but we are also going to try to take the company you are creating.”

    Like you said, as an moonlighting entrepreneur it is important to identify for yourself when its time to go and make the move before something much worse can happen.}

  8. It looks like I might be starting a new job in a few weeks…. I’ve been moonlighting for quite a while on an idea. Is there is a “boiler plate” document that I should consider between my new employer and myself that would prevent the new employer from claiming ownership of my intellectual property, especially since I’m coming into the company after conception of my product / business?}

  9. Any employee capable of conceptualizing and developing a piece of IP worthy of claim should be embraced by an employer – not fired. Surely they’d be an invaluable asset to the company if only they were given the opportunity to flourish rather than being crushed under a mountain of stuffed-shirts and managers.

    I loved the software company I worked for. It was such a good company, in fact, that they were inevitably bought out by a consortium of evil investors whose lack of nous was matched only by their greed. A horde of “upper-management” were swiftly recruited and the engine-room staff began to disperse, it became apparent to me that I should devise my own exit strategy.

    I started developing my own app and startup, mostly in my own time.

    Deciding when to go full-time on your startup is a tough call and one I was struggling with. Fortunately the decision was made for me when, after 3 years of loyal service and a swag of ’employee of the month’ awards, I was served with a supreme court summons and a legal complaint the size of a phone book from the company’s law firm…

    Fortunately, as rule 5 correctly states, employers will almost always back away from costly court battles – its all bluff, and in my case, was quite convincing. I stuck to my guns and they eventually went away… Its been 3 years since I started my company I’ve never looked back. As for the evil investors? They’re bankrupt.}

  10. I have a situation I’m becoming increasingly concerned about. I work for a venture fund where we invest in and start med-tech companies. My boss is very cool, and even said she would support me if I ever decided to start a business of my own.

    About a year ago, before I was hired at the company, I developed an idea for an online roommate matching system. 2 weeks ago, me and my partner finally incorporated. I also didn’t want to use my home address and asked my boss if I could use the business address of the office (the company I work for is housed within a center, so the address is not specifically for my company only). So I incorporated with the company’s address.

    I also have my company e-mail as my default on my gmail account, so all the emails I have sent out for market research and contact related have come from my business e-mail address. I’m getting really nervous now that if we hit it big they will look for a piece of it.

    Do you think I should pay the cash to get the address changed, is it any good doing that now? Any other suggestions or am I screwed?

  11. Hi John (johncastel),

    It looks as if your boss is a good lady. Your boss is helping you to use her company address and other resources. According to me, there is nothing wrong in offering her a “piece” you “hit it big”. In your place, I would always return the favor. Anyway, good luck for your business as well as to promoterforce.com

  12. I would delete the comment first. you already gave many signs of who you might be.
    at least delete the business idea so that your boss cannot even have a proof that you have been moonlighting

  13. This article seems a bit pointless. Why not keep your mouth shut. If the company says they own the IP, just say, “opps, I lost all the source code”.

    Besides, someone in Bulgaria just “stole” all my source code and now the company is operating overseas and making money. No, I don’t know who this overseas person is and I am not getting money from that person, want to see my bank statement?

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