A lot of people ask me how they can start doing something outside of their day job to make money and keep their salary rolling in every month. They ask because I did it for multiple years on my way to breaking out from Corporate America. They ask because they want to try out other things while being “safe” inside their salaried position as a project manager, developer, designer, product manager, or people manager. You see, Corporate America doesn’t want you to leave… sure there isn’t anything in your employee agreement that prevents it… but they do not like people who are working on the “outside”. As a manager I was regularly looking for people who didn’t have their head in the game because I wasn’t getting my full value from them. So, there is value in understanding how to work with your work while your working for yourself too.
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What I’m about to share I have used at four different employers. So I’m not just making this up. This is simply knowledge and my goal in sharing it is to help you reach your goals on your terms. I genuinely hope you do… it is what I’m working on too. If you want to use the knowledge here then need to figure out for yourself whether these terms and practices apply at your employer and whether they are appropriate for your situation… only you can figure that out and only you will be living with the consequences if it doesn’t work out. So, with that said, let’s expand your knowledge.
So, you want to play around with being an author, consultant, open source developer, or some other venture that makes you money while you are employed as an exempt employee in Corporate America. Well, let me start by saying that many people have gone before you and made it happen successfully without immediately quitting their day job. There are some tricks to the trade however and this post is intended to explain what you will find at 80% of the large companies in the United States. If you’re outside the USA I’m afraid I cannot advise you since I have no idea what your employee agreements look like.
Here’s the biggest issue that you are facing as an employee who wants to do “other stuff”. In your employee agreement there is most likely language that clearly states:
- You are to give your full time and effort to your employer
- All intellectual property you create while employed is the property of your employer
These are two really big and important statements, read them again. Okay so let’s break them down.
First: Full Time And Effort
This means that when you are not engaged in a reasonable hobby or family obligation or sleeping you are expected to be working for your employer. It also happens to mean that your employer can order you to complete work on their schedule and you must comply or face being considered disobedient, which is typically punishable with employment termination. This language does not really leave much wiggle room for side-ventures, side-hustles, side-jobs, or anything else on the side. Company culture is really what determine what this means for you in your day to day life. However, when you’re talking about a job or ownership stake in a business the culture doesn’t really have anything to do with it.
Second: Intellectual Property
This statement really means that any process you come up with, any technique you develop, any writing that you do, any coding that you do, any of that is the property of your employer. If you get a patent, you don’t actually own it, your employer does. If you create a copyright-able work, you don’t really own it, your employer does. etcetera . Now, again, company culture generally dictates what this means for you day to day. Generally your employer doesn’t care that you came up with a great recipe for making beer or that you wrote an article in the model railroading magazine. If they did care however, they could sue you for the rights to those items if you did not provide them when requested. This one is really in the way of anyone trying to do something on the side that is worth money.
So, as you can see, there are some rocks and hard places standing firmly in the way of you starting something serious on the side. Let’s look at the loopholes so you can start to see the gaps you can fit through.
There are three primary loopholes that you need to know about and make use of if you want to start something on the side. These aren’t really loopholes, they’re more like standard practices that are not included during employee orientation and not brought up in the workplace.
- Prior Intellectual Property
This is the human resources name for “Working at a job or venture that makes you money outside of your exempt employment agreement with your employer”. Moonlighting is working outside of work. Almost all companies in the USA have a Moonlighting section in the employee agreement or company handbook. The critical thing about moonlighting is that you need permission and that permission can be removed at any time. I always suggest that when someone wants to start something on the side that they request permission to moonlight… when it is a small thing, and before there is any intellectual property or profits. The critical evaluation will be the commitment of your time and whether there is a conflict of interest with your current employer.
Here is the typical process to get “Moonlighting” approval:
- Draft an email to your manager (see the content below)
- Wait for a response
- If HR calls, have whatever conversation they want to have
- Receive an email stating that you have permission and that there is no conflict of interest
The key piece of this 3-step-process is the email to your manager. Remember that your manager probably doesn’t have a clue how to give you permission to moonlight so your email is going to end up with HR.
Here is what to put in that email:
- Explain that you want permission to moonlight
- Describe what you are doing in the smallest possible terms
- Explain that you do not see a conflict of interest in this and that the time commitment does not conflict with your work expectations.
- Ask your manager how to go about recieving permission from HR
This looks simple but it is really a setup for success.
- Point 1 is straight forward.
- Point 2 is important. If you want to start an import/export business then describe yourself as doing some hobby eCommerce. If you want to create the next Facebook-killer describe the work as creating some small Apps for cell phones. Do you get the drift?
- Point 3 will cause the right action in HR… to evaluate whether what you describe is tangential enough to what your company does that you’re not stealing revenue from them. It also assures them that they are in first position for your time.
- Point 4 causes the right routing of your email because your manager has probably never had to deal with this before. You don’t really want this going up the management chain, you want this to go to HR, and this causes that behavior
What you want in the end is an email that you can print and save for your records showing that you have permission to moonlight and that there is not a conflict of interest.
The next loophole we can consider is that of ownership. When you are an owner of a business it is generally not interpreted as a threat to your current employer since just being an owner is not a threat. If you were an employee it might be an issue. The exception here is when you own a competitor or supplier to your employer, obviously. So, as an owner you are not a threat and if you are not yet an employee of the company that you own then you are not a threat. Being an owner can come with reasonable amounts of ownership activities as far as most HR departments are concerned. So, how do you use this information?
If you’re starting a business as an owner you can essentially follow the same process as for Moonlighting. In this case you are simply going to make your manager and HR aware of your intentions to become an owner and that you do not see a conflict of interest in what the company will do or your time.
This is how that guy on that other team runs rental homes and the business doesn’t seem to care… he is an owner, there are ownership responsibilities that he is fulfilling, and there is no conflict of interest. If “that guy” is smart he has both moonlighting permission and has made HR aware of his ownership in a business.
Prior Intellectual Property
Intellectual property (IP) is really the core of some businesses. If you’re creating an App then that App is intellectual property. If you’re writing a book than the drafts and end work are intellectual property. If you’re researching a new way to make beer and come up with a new recipe then you’re creating intellectual property. Remember that in most cases your employer owns all intellectual property that you come up with while you are an employee. Here’s the loophole: When you start a job there is generally an Intellectual Property Ownership Declaration that you can provide to a new employer that lists the intellectual property that you already own. When your new employer reviews this list and provides you acknowledgement of the list they are essentially waiving any claim to that IP. This creates an opportunity if you are changing main employment and have intellectual property.
The opportunity is that you can create a short list that includes “various other items” and ask for it to be reviewed and accepted by HR as part of your joining.
When you are extending existing intellectual property it will generally not be considered the property of your current employer because it already existed and was not claimed by your company.
Note that this is not legal advice. If you have something really valuable hopefully you have a law team helping you protect its value and ownership. If you have any question on this, go find a lawyer for yourself and find out what you need to do.
So, now that you know about the loopholes you can use to create space for you to have a side-job while earning a big fat salary somewhere it is important to understand how you need to behave. This the one section that will determine if you end up in trouble with your employer or if you get to break out with your nice stable venture six or 12 months later.
Here are my rules for moonlighting:
- No one should know you have a side job other than the manager you originally asked and the person in HR who originally approved. There is no need to bring it up again to anyone if you have approval.
- Your employer always get your time first. If you are not available some time then you are instantly creating a conflict of interest with your employer and that is not good for you. If you want it bad enough you can wake up early, stay up late, and work the weekends to get your side-hustle going.
- Don’t talk about your moonlighting. Not on social media where co-workers are connected, not in the office, not when you go for beer, not when you have some major victory for your side job. No one working around you should know. Don’t even list it on LinkedIn.
If you follow these steps then you’re set for having the space to experiment with growing something while continuing to earn your salary in Corporate America. If you want to talk about your situation feel free to send me a message.