Designing rival products whilst working for current employer

[Goochie]

Hypothetically speaking......

Mr X. is currently very happy in his job but realises he will never get rich by working for someone else. As part of his daily work running a technical/design office he sees numerous opportunities to improve products and has had a number of good ideas that have made his employer many hundreds of thousands of pounds.

Mr X. is considering starting up on his own once the current economic black cloud passes over, by that time he will have had a year or so to do the ground work and design a small selection of products.

If there is nothing in Mr X's contract stating that any ideas he has belong to the company, is there any (legal) reason that he cant' do this?

His current employer will be understandably miffed when he announces he is leaving and has set up on his own - selling a rival product that has a number of significant improvements. They may be a little upset that he kept all his good ideas to himself for 2 years whilst hatching his plan.

What are your thoughts on this?

[Plotloss]

If the market is there for the improved product can he afford to wait until the economic situation improves?

If he cant and there isnt the capability currently to afford such a luxury then he is quite probably stuffed.

If he can is there really a market there at all?

[The Moose]

i'm sure that you, sorry, your friend must have something in his contract. if not, then i don't see why you, sorry, again, your friend can't do that. the only thing is that your, sorry, your friend (i keep doing that - funny) will have a lot of bad feelings directed towards you, sorry, them.

personal choice.

the other thing to check out is an anti-competitive clause stating if you leave you are not alowed to setup on your own.

i have no idea if there are any rules that are not in a contract relating to this.

cheers

the moose

[mrmr96]

Does Mr X own shares in the business?
Is part of Mr X's job to come up with ideas?
Is Mr X POSITIVE that there are no restrictive covenants in his employment contract?

This sort of thing does happen, where ex-tech's go it alone and produce improved products to rival their old employer. However it depends on the might of the old employer and the new startup whether the new venture will ever actually get off the ground.

Good ideas are one thing, but contacts, support, finance and infastructure are also critical components in launching a startup, especially with aspirations to take on an ex-employer.

[plasticpig]

My thought is your freind is morally and ethicaly bankrupt. If your freind is thinking and improving a product in company time then that improvement belongs to the employer.

Edited by plasticpig on Thursday 18th December 15:19

[Goochie]

Mr X has no shares in the business. It is part of his job to come up with new ideas.

His current employer where first-to-market with a revoutionary new product that others have since copied. This product gave them a 40% growth 2 years ago and it was all Mr X's idea.

Mr X's new idea is in a similar area but a totally different product.

[Goochie]

plasticpig said:

My thought is your freind is morally and ethicaly bankrup. If your freind is thinking and improving a product in company time then that improvement belongs to the employer.

He would be doing it all in his own time.

[MoonMonkey]

plasticpig said:

My thought is your freind is morally and ethicaly bankrup. If your freind is thinking and improving a product in company time then that improvement belongs to the employer.

Would I be correct in saying that it would only be an issue if, as stated above he/she was developing these new products/improvements on work time using work resources?? However, if this work was done out of hours in a shed then that's a different ball game altogether??

[plasticpig]

MoonMonkey said:

plasticpig said:

My thought is your freind is morally and ethicaly bankrup. If your freind is thinking and improving a product in company time then that improvement belongs to the employer.

Would I be correct in saying that it would only be an issue if, as stated above he/she was developing these new products/improvements on work time using work resources?? However, if this work was done out of hours in a shed then that's a different ball game altogether??

So he switches off his brain while at work and only generates ideas for improvements at home? If so he is not giving the best to his employer in the first place.

[MoonMonkey]

plasticpig said:

MoonMonkey said:

plasticpig said:

My thought is your freind is morally and ethicaly bankrup. If your freind is thinking and improving a product in company time then that improvement belongs to the employer.

Would I be correct in saying that it would only be an issue if, as stated above he/she was developing these new products/improvements on work time using work resources?? However, if this work was done out of hours in a shed then that's a different ball game altogether??

So he switches off his brain while at work and only generates ideas for improvements at home? If so he is not giving the best to his employer in the first place.

Good point. Just noticed that the OP has confirmed that product improvement is part of the r's and r's so a bit of a naughty one.

[Don]

Goochie said:

plasticpig said:

My thought is your freind is morally and ethicaly bankrup. If your freind is thinking and improving a product in company time then that improvement belongs to the employer.

He would be doing it all in his own time.

This is key. Any work on the new product must be in personal time. At the same time MrX must continue to fulfil his professional duties such that the employer has no reason to suspect or legitimate reason to complain that Company time was used on personal projects.

Similarly MrX will need to be certain that there are no clauses in the contract that forbid MrX working in the same or similar fields on leaving the Company for a while. There is sometimes a lock-in period specified that does this - personally I wouldn't sign a contract with that in as it would interfere with my ability to make a living but you'd be surprised at how often such a clause is tried.

Given the above is very carefully executed then MrX will no doubt get away with it. Firms I worked for had "skunk" projects and "business start-ups" in them all the while...