# California Labor Code § 2870: The Employee Invention Shield > California Labor Code 2870 explained: when your invention is yours despite an assignment agreement, the notice rule in § 2872, and how courts apply the test. Guide | Author: Lidiia Levitska | Source: Intellectual Property Law (outsideipcounsel.com) Canonical: https://outsideipcounsel.com/guides/california-labor-code-2870/
Quick answer: [California Labor Code § 2870](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB§ionNum=2870) makes an employee invention-assignment agreement unenforceable as to inventions you developed entirely on your own time without using employer equipment, supplies, facilities, or trade secret information — unless the invention relates to your employer’s business or its actual or demonstrably anticipated R&D, or results from work you performed for the employer. Every element matters: one late night on the office laptop, or a side project in your employer’s market, can move the invention into company territory. Employers can require disclosure of all inventions (§ 2871) and must notify employees of the § 2870 carve-out in the agreement itself (§ 2872). This is general education, not legal advice — have an attorney licensed in your jurisdiction review your specific situation.
You signed an offer letter, and buried in the onboarding packet was a "Proprietary Information and Invention Assignment Agreement" saying the company owns everything you invent. Now you're tinkering with something of your own and wondering whether that sentence really means what it says. In California, it can't — at least not entirely. **California Labor Code § 2870** is the state's employee invention shield: a statute that voids over-reaching assignment clauses as to genuinely independent inventions. This guide walks through the statute element by element, the companion sections employers routinely fumble, how the fights actually play out in court, and what both sides should do about it. For the full map of workplace IP ownership, start with the pillar guide on [who owns what you create at work](/guides/who-owns-what-you-create-at-work/). ## What Section 2870 says, element by element The statute is short enough to quote in substance. Section 2870(a) provides that an employment agreement requiring assignment of inventions **does not apply** to an invention for which *all* of the following are true: 1. **Developed entirely on the employee's own time.** Not lunch breaks at your desk, not "mostly evenings." Courts read *entirely* literally — meaningful development during working hours weakens the claim. 2. **Without using the employer's equipment, supplies, facilities, or trade secret information.** The company laptop, the office 3D printer, the internal codebase, a customer list, unreleased roadmap knowledge — any of these can forfeit the shield. Trade secret information is the one people miss: you can work at home on your own machine and still be "using" employer trade secrets if the invention is built on confidential know-how from your day job. 3. **AND** the invention: - does **not relate to the employer's business** or the employer's **actual or demonstrably anticipated research or development** at the time of conception or reduction to practice, **and** - does **not result from any work performed by the employee for the employer**. Read that structure carefully, because it's where most people misunderstand the law. Own-time-own-tools is *necessary but not sufficient*. Even a purely nights-and-weekends invention belongs to the employer under a valid assignment clause if it **relates to the employer's business or anticipated R&D**, or **results from your work** for the company. A machine-learning engineer at a fraud-detection startup who builds a fraud-scoring tool at home, on her own laptop, is very likely outside § 2870's protection — the invention relates to the employer's business. Section 2870(b) then supplies the teeth: any contract provision that purports to require assignment of a protected invention is **against the public policy of California and unenforceable**. Employers cannot draft around the statute. ## The companion sections: § 2871 disclosure and § 2872 notice Section 2870 doesn't operate alone. Two neighbors in Article 3.5 of the Labor Code handle the mechanics. ### § 2871: employers may require disclosure **[Labor Code § 2871](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB§ionNum=2871)** says an employer may require, as a condition of employment, that the employee **disclose all inventions** made during the employment term — provided the disclosures are received **in confidence** — together with a review process to determine which inventions are protected and which are assigned. It also permits provisions placing full title to certain inventions in the United States where federal contracts require it. This is why refusing to disclose a side project is usually a strategic error. Disclosure is not a concession of ownership — it's the statutory sorting mechanism. An employee who discloses promptly, in writing, with the facts showing own-time development, builds a paper record. An employee who conceals a project and surfaces it after resigning looks, to a judge, like someone who knew the answer and didn't like it. ### § 2872: the mandatory notice **[Labor Code § 2872](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB§ionNum=2872)** requires that if an employment agreement contains an invention-assignment provision, the employer must provide, **at the time the agreement is made, a written notification** that the provision does not apply to § 2870-qualified inventions. In practice this appears as a short paragraph or an exhibit (often labeled "Limited Exclusion Notification") citing § 2870. Skipping the notice doesn't flip ownership of every invention to the employee, but it matters. Because § 2870(b) already voids the over-broad portion of the clause, and § 2872 makes proper notice part of a compliant agreement, an employer that ignored the notice requirement starts any ownership dispute explaining why it disregarded the statute — a bad opening position, and a red flag acquirers and investors catch in diligence. ## How "relates to the employer's business" gets litigated The vaguest phrase in the statute — *relates to the employer's business or actual or demonstrably anticipated research or development* — is where the litigation lives. **Employers argue breadth.** Companies describe their business expansively ("we're a technology company serving the financial sector"), which would sweep in almost anything a technical employee builds. **Employees argue reality**: what did the company actually make, sell, and research when the invention was conceived? Courts generally test the relationship against the employer's *actual* operations and *demonstrably* anticipated R&D — the word "demonstrably" requiring concrete evidence such as roadmap documents, budgets, or prototypes, not an executive's after-the-fact insistence that "we were always going to move into that space." A frequently cited example is *Cubic Corp. v. Marty*, 185 Cal. App. 3d 438 (1986), where a defense-electronics employee developed a combat-training system idea and lost the ownership fight: the invention related to the employer's business and grew out of his work, so § 2870 offered no shelter and the assignment agreement controlled. The lesson runs both directions — the statute is a real shield, but only for inventions genuinely *outside* the employer's orbit. One more boundary worth knowing: § 2870 governs inventions made **during employment**. Clauses that try to reach inventions conceived *after* the employee leaves run into a different statute entirely. In *Whitewater West Industries v. Alleshouse*, 981 F.3d 1045 (Fed. Cir. 2020), the Federal Circuit held that a post-employment invention-assignment obligation was void under California's non-compete ban, Business & Professions Code § 16600, because it restrained the former employee's ability to work — and § 2870 couldn't save it, since that statute only addresses agreements covering inventions made while employed. Holdover clauses in California are on very thin ice. ## How § 2870 compares to other states California started the trend in 1979, and a cluster of states adopted near-identical statutes. The core protection — own time, own resources, unrelated to the business — is the common thread. | State | Statute | Notes | | --- | --- | --- | | California | Lab. Code § 2870 | The model; notice required (§ 2872) | | Washington | RCW 49.44.140 | Nearly identical; notice required | | Illinois | 765 ILCS 1060/2 | Employee Patent Act; notice required | | Minnesota | Minn. Stat. § 181.78 | Nearly identical; notice required | | North Carolina | N.C. Gen. Stat. § 66-57.1 | Nearly identical | | Delaware | 19 Del. C. § 805 | Nearly identical | | Kansas | Kan. Stat. § 44-130 | Nearly identical; notice required | | New Jersey | N.J. Stat. § 34:1B-265 | Added 2018 | | New York | Labor Law § 203-f | Added 2023 | | Utah | Utah Code § 34-39-1 et seq. | Different structure ("employment inventions") | | Nevada | Nev. Rev. Stat. § 600.500 | Employer-friendly: employer presumptively owns patentable inventions from employment | In states with no statute, the contract language and common-law doctrines (hired-to-invent, shop rights) do all the work — which usually means broader assignment clauses are enforceable there than they would be in California. ## What § 2870 does NOT protect The statute has a reputation among employees as a magic side-project amnesty. It isn't. Section 2870 does **not**: - **Excuse trade secret misuse.** Building "your own" invention with the employer's confidential data, code, or know-how both forfeits the § 2870 shield and exposes you to trade secret liability under California's UTSA and the federal DTSA. See the [California trade secret guide](/topics/trade-secrets/) for how those cases unfold. - **Protect work-related inventions.** Anything resulting from your assigned work belongs to the employer under a valid agreement, no matter where or when you refined it. - **Rewrite copyright law.** Section 2870 speaks of "inventions." Copyrightable works you create within the scope of employment are the employer's as works made for hire under [17 U.S.C. § 101](https://www.law.cornell.edu/uscode/text/17/101), on a separate analysis. - **Void the whole agreement.** It voids the over-broad *application* of the assignment clause, not the NDA, not the disclosure duty, not assignments of genuinely work-related inventions. ## Practical playbook for employees If you're building something on the side in California, the statute rewards discipline: 1. **Read your agreement and the § 2872 notice** before writing a line of code. Understand exactly what "the business" is as your employer describes it — and as it actually operates. Our guide to [invention-assignment agreements](/guides/invention-assignment-agreements/) decodes the standard clauses. 2. **Keep the streams separate, totally.** Own laptop, own accounts, own cloud, off hours, no employer Wi-Fi, no colleagues' feedback loops, nothing derived from internal materials. 3. **Document contemporaneously.** Timestamped commits, receipts for your own equipment, a dated project log. Ownership fights are evidence fights. 4. **Assess the "relates to" question honestly.** If your project sits anywhere near your employer's market or roadmap, § 2870 probably won't save you — the deeper analysis is in [can my employer own my side project?](/guides/can-my-employer-own-my-side-project/) 5. **Disclose in writing when required**, framing the facts that satisfy each statutory element, and keep the response. ## Practical playbook for employers 1. **Include the § 2872 notice** in every California invention-assignment agreement, as a distinct, signed acknowledgment. 2. **Don't over-draft.** A clause claiming "all inventions, whenever made" invites § 2870(b) public-policy problems and, for post-termination reach, § 16600 invalidity under *Whitewater West*. 3. **Build a real disclosure-review process** under § 2871: a form, a named reviewer, written classification decisions. Ambiguity at hire becomes litigation at exit. 4. **Mind the multistate map.** A workforce spread across California, Washington, Illinois, and New York needs agreements matched to each state's statute — one national template with a single notice exhibit rarely complies everywhere. California's broader employment-IP quirks are collected in [intellectual property in California](/guides/intellectual-property-in-california/). ## The bottom line Labor Code § 2870 draws a clean, demanding line: an invention is yours despite an assignment agreement only if you built it entirely on your own time, entirely with your own resources, and entirely outside your employer's business, anticipated R&D, and your own job duties. Employers must tell employees about that line (§ 2872) and may require disclosure to police it (§ 2871), but they cannot contract around it. For employees, the statute is a genuine shield — for the narrow class of truly independent inventions, provable with contemporaneous records. For everything near the employer's orbit, assume the agreement means what it says. --- *This article is general legal information for educational purposes only. It is not legal advice, does not create an attorney-client relationship, and may not reflect the most current law in your area. Employee invention ownership disputes turn on specific facts. For advice about your situation, consult an attorney licensed in your jurisdiction.* ## Frequently asked questions ### What does California Labor Code 2870 actually protect? Section 2870 makes an invention-assignment agreement unenforceable as to inventions you developed entirely on your own time, without using any employer equipment, supplies, facilities, or trade secret information — but only if the invention also does not relate to the employer’s business or its actual or demonstrably anticipated research or development, and does not result from any work you performed for the employer. Every condition must be satisfied. If your side invention relates to what your employer does, § 2870 does not shield it even if you built it entirely at home on weekends. ### Does my employer have to tell me about Section 2870? Yes, if the employment agreement requires you to assign inventions. Under Labor Code § 2872, the agreement must include a written notification that the assignment provision does not apply to inventions that qualify under § 2870. Section 2870(b) separately declares that any contract provision purporting to assign a protected invention is against California public policy and unenforceable. A missing notice does not automatically hand you every invention, but it undercuts the employer’s position and is a compliance failure California courts notice. ### Can my employer require me to disclose inventions I think are mine? Yes. Labor Code § 2871 expressly allows an employer to require disclosure of all inventions made during employment, alongside a review process to determine whether each one is protected by § 2870 or belongs to the company. Disclosure is not assignment — it is how the classification question gets answered. Refusing to disclose is usually a mistake, because it can breach the agreement and makes you look like you were hiding something if ownership is later litigated. ### Do other states have laws like California Labor Code 2870? Yes. Washington (RCW 49.44.140), Illinois (765 ILCS 1060/2), Minnesota (Minn. Stat. § 181.78), North Carolina (N.C. Gen. Stat. § 66-57.1), Delaware (19 Del. C. § 805), Kansas (Kan. Stat. § 44-130), New Jersey (N.J. Stat. § 34:1B-265), and New York (Labor Law § 203-f, since 2023) all have statutes closely tracking § 2870’s structure. Utah and Nevada take different approaches — Nevada’s statute is notably more employer-friendly. If you work outside these states, the contract language alone usually controls.