It's never a good idea to just quit your job and launch your startup. With the failure rates as high as they are, it makes sense to maintain your primary form of employment and begin your new business on the side. But this can land you in legal trouble with your employer.

There are companies that have fired employees over this. This guide is going to show you how you can go about launching a startup without getting fired.

Do they Allow It?

Think back to your interview and the onboarding process, did anyone mention anything about employees not being able to start their own businesses?

If there was nothing, it may be worth asking your manager. Thankfully, most companies have no problem with you starting a side business as long as it doesn't become a conflict of interest within your current mode of employment. The best thing to do first is to ask.

Check Your Employment Contract

Your employment contract will usually include some clauses that relates to your new startup. They will come in the form of non-disclosure agreements and non-compete clauses. These are often complex and will include lots of scary legal talk. The only time you need to be worried about any of this is if your new startup is going to come into conflict with the business you are working for.

In the case of most people, this is not something they have to worry about. It's also worth noting that in states like Hawaii, the courts have admitted that many of these agreements are unenforceable from a legal standpoint.

That wouldn't stop your employers from firing you, though.

Make Your Ideas Transparent

In the US there's always a former employer trying to sue a former employee over stealing intellectual data and using trade secrets. This isn't always done with malicious intent in mind. Sometimes you are simply using your knowledge of specialized processes to make things happen, and that's technically illegal.

The way to make sure you don't end up in court is to make your processes and ideas transparent. Make it clear that you are making no attempt at fleecing your current employer.

Don't Poach Former Colleagues

It's tempting to simply take former colleagues and have them jump ship to your business, particularly in the startup world where enterprises can explode into prominence in 24 hours. There's no easier way to get yourself fired and dragged into court, though.

You are acting as an insider to poach former co-workers. Furthermore, this will leave you with a bad reputation in the business world. Few people will trust you if you have a history of theft.

Using Company Time and Resources

Most companies have no problem with unrelated side businesses being started by their employees. All they demand is that they are their priority. They also demand that when you are at work your startup doesn't come into it. Yes, it may be tempting to spend time on your startup during slow periods, and it may be tempting to use the company photocopier for some flyers, but most employers won't tolerate this.

If you have a good relationship with the management, you may be able to ask them for a favor here and there, but don't just go and do it.

It's even wise to avoid using your breaks to work on your startup so you don't attract too much attention.

What if I Can't Make My Big Idea Work Because of an Employment Contract?

In this case, you have a decision to make. This may be your one shot at becoming a success, but at the same time it will probably get you fired. There are two ways you can go about this.

Firstly, you can quit your job or put your idea aside entirely. This is a risk because you are potentially quitting your career for an idea that has a small chance of working.

An alternative is to do it anyway and be extremely careful. It's possible to break an employment contract without ending up in court. As long as you are not stealing, the worst that can happen is you get fired. If you go down this route, check your state's employment laws. Many contracts are unenforceable in law.

Last Word--Not a War

It's easy to think that by beginning a startup you are instantly at war with your employers. Most bosses will happily wish you luck, though, as long as you are not hurting their business. Put yourself in their shoes and their position will become immediately apparent.

What is your big startup idea?


Published on: Apr 18, 2016
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