Hey, great idea! Now the company owns it
An age of mobile workers causes businesses to toughen up onintellectual- property rights
BOSTON — It was a great moment for futurist and consultant Tom Conger. He got the inspiration for two new data-gathering methods he knew could help businesses prepare for the future.
He decided he would spend the rest of his career making those ideas work.
The wrinkle: He was an employee of an Alexandria, Va.-based management consultancy - which meant that the ideas were not actually his.
"The rule is that if an employee does something while working for their employer, and it's relating to their job ... the employer is paying for that person's creative abilities, and that thing essentially belongs to the employer," says Nancy Vollersten, partner in Lindquist and Vennums, an employment-law firm in Minneapolis.
But Mr. Conger couldn't accept the idea of leaving his research methods behind, if he ever decided to leave his job. So he asked his employer for ownership.
It was a bold and unusual request. And it did not go over well at first. But then came some progress. Conger now plans to set up shop on his own, develop his ideas on his own dime - and work with his soon-to-be ex-employer on a contract basis.
Experts say using ideas developed on the job for your own business (or another employer) is a risky business. Companies have begun staking a more serious claim to their intellectual property, says Ray Bennett, senior member of technical staff at Chicago-based Ameritech. He's designed technical products for more than 20 years.
When he first started out, "you just assumed that many of the tools and other things that you developed on the job were yours and you'd be able to move it with you from job to job," he says. But thanks to the knowledge-based economy, a more mobile work force, and a trend toward short-term-contract workers, employees no longer have the luxury of casually moving information from one job to the next.
Some 74 percent of organizations today rely on "alternative" workers. And these temporary employees are increasingly taking over high-level and strategic work, according to a 1999 survey conducted by the Society of Human Resource Management (SHRM), in Alexandria, Va.
Proprietary information sits at the top of the list of things to leave behind when you leave your job. (Marketing strategies, client lists, price lists all fall under this category.) No written agreement is required. The law says employees may never reveal or utilize trade secrets or proprietary information, says Bernard Bonn, managing partner at Dechert, Price and Rhoads in Boston.
A company also has the right to own and protect "future trade secrets" - those still inside the heads of their employees. Any ideas, plan, or strategy that you cook up on the job, and that is in any way related to the company's line of work, are the property of your employer.
An increasing number of companies are protecting themselves through the use of confidentiality and noncompetition agreements. These restrict an employee from working for themselves or a competitor, in a given geographic area, for a given period of time.
Noncompete agreements are also used outside of traditional employment, says Alexis Driscoll, the principal of Outpoint Consulting, a brainstorming company in Palatine, Ill. She has a colleague with whom she would like to collaborate. But "he's asked me for a ferocious noncompete that is phenomenally restrictive," she says.
For example, the agreement implies that if they do a small project together for IBM in the Chicago area, she won't be able to sell a project to IBM in China.
If they're "reasonably" drawn, noncompetes do hold up in court, say both Ms. Vollersten and Mr. Bonn.
"You can't ban someone from competing with you for all time in the entire world," Vollersten says. But even if the contract is ultimately struck down in court, a judge can order you to temporarily stop work until the matter is resolved.
Bonn suggests prospective employees run a noncompete agreement by an attorney and negotiate hard on the terms. And while Conger didn't have to sign a noncompete, he agrees with Bonn.
"These contracts can close the door on what possibilities you can even explore in the future," he says.
(c) Copyright 1999. The Christian Science Publishing Society