By Brett G. Durrett, VP Engineering & Operations
I am excited to share IMVU’s policy regarding projects that employees build in their personal time.
IMVU’s approach breaks from the standard way most companies deal with employee side projects, both by addressing potential conflicts of interest before an employee invests their time and by protecting the employee against future claims to their side project work. I hope this policy will encourage other companies to adopt policies that recognize how many people apply their professional talents to both work and recreation. Since I am sharing this in the engineering blog, the focus is programmer-centric; however, the policy applies to all IMVU employees.
What’s the Problem?
To understand why IMVU wanted to take a new approach it is helpful to understand how companies usually handle employee side projects. State and federal laws generally provide for ownership interests for an employer in work done by employees, and typically this is bolstered by having each employee sign an Employee Inventions Agreement that provides the company with broad ownership rights to work the employee produces. Most developer-level employees are salaried (not paid hourly) so there is no clear demarcation between “work time” and “personal time” with regard to their professional lives. Also, companies change their business interests, so what may apparently have been outside of the scope of the Employee Inventions Agreement when an employee joined a company may become subject to company ownership as the company expands or changes its actual or anticipated business interests. Or a particular employee may be unaware of work being done or contemplated elsewhere in the company. The combination of these can lead to situations where ownership rights are ambiguous, or worse, lead to litigation to resolve, with much of the burden falling on the employee.
At IMVU, we like to attract and hire creative people who love to build things: curious tinkerers, hackers, people who love to code for both work and pleasure. When reviewing job candidates, we see involvement with open source and community projects as added value. This is not unique to IMVU – there are many other companies in Silicon Valley looking for the exact same types of creative builders.
But here is where potential problems arise. The same “always creating” DNA that makes an employee so appealing for a company can create trouble for them under the broadly defined ownership terms of their Employee Inventions Agreement. Once at a company, an employee’s personal project can become subject to company ownership if the company asserts that the project used company resources or is related to the business or research interests of the company. For understandable reasons, “business interests” are open ended or broadly defined in an Employee Inventions Agreement. So a company in the mobile space may be able to argue that any mobile development is related to the company business. In practice, when personal projects have insignificant value companies have little motivation to deal with the conflict associated with asserting claim to the work. However, if a personal project becomes valuable, the company has an incentive to claim ownership. Even if a company doesn’t immediately claim ownership, this is a possibility later (e.g. an acquiring company or new management looking for potential intellectual property gains in the company’s assets). In the worst-case scenario, somebody could work on what they believe to be a personal project for years only to find out later that a company owns the entirety of the work.
IMVU’s Approach to Foster Creativity
Rather than leave employees in this ambiguous state, IMVU takes a different approach. IMVU employees can declare that they are starting a personal project and, before the project is underway, the company will explicitly state whether or not it believes it has an interest in the project. If the company does not claim interest, it will provide to the employee a formal release that acknowledges the employee’s ownership rights to the project, and the employee will be protected even with future changes to management or control of the company.
While the policy’s benefits to employees may be obvious, I see this policy as a win for the company as well. In a typical company, conflicts of this kind are identified only after an employee has invested a lot of time in a project, making resolution more difficult and potentially tarnishing the relationship between the company and the employee. IMVU’s policy allows potential conflict to be addressed at the start of a side project, where the investment is low and there is not yet a tangible asset to contest. Perhaps most importantly, it encourages honesty and transparency around side projects that are already happening. In contrast, I am aware of a large company with a “zero side projects” policy that drives the issue underground and results in some employees using pseudonyms and creating side projects anyway (which will not protect the employee if the project becomes valuable).
I hope to see other companies adopt side project policies similar to IMVU’s, or at least encourage companies with zero-tolerance policies to evaluate the need (and value) of such a prohibitive culture. Instead of making employees hide their recreational projects and fear repercussions from the company, encourage openness and creativity, all the time!