# What is California Labor Code 2870?

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> Source: https://trycounteroffer.com/answers/what-is-ca-2870


**Short answer:** California Labor Code § 2870 is a statute that limits the scope of IP assignment clauses in employment agreements. It excludes from assignment any invention an employee develops entirely on their own time, without using employer equipment, supplies, facilities, or trade secret information, that doesn't relate to the employer's business or research and doesn't result from work performed for the employer. The statute applies to California employees regardless of what the employment contract says.

## The text of the statute

California Labor Code § 2870 reads (in relevant part):

> (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:
> 
> (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or
>
> (2) Result from any work performed by the employee for the employer.

In plain English: California employers cannot require assignment of inventions made on the employee's personal time without company resources, unless the invention relates to the employer's actual or anticipated business or arises from work the employee did for the employer.

## How the carve-out works

The statute creates a multi-part test. For an invention to be carved out from the employer's IP assignment (i.e., for it to remain the employee's property), all of the following must be true:

1. **Developed entirely on employee's own time.** Not during working hours, not on company time, not while paid by the employer.
2. **Without using employer equipment.** Not on a company laptop, not in the company office, not using company servers or tools.
3. **Without using employer supplies.** Not using paid-for materials, samples, or other physical or digital resources.
4. **Without using employer facilities.** Not in the company office, lab, or other physical space.
5. **Without using trade secret information.** Not relying on confidential information you learned in the course of employment.

AND:

6. **Not related to the employer's business or anticipated research.** A general topic the employer doesn't work in.
7. **Not resulting from work performed for the employer.** Not arising from your actual job duties.

If all seven conditions are met, the invention is yours under California law, even if the employment contract says otherwise.

## What gets carved out in practice

Inventions that typically qualify for the § 2870 carve-out:

- Personal projects developed on weekends, in your home, on your own computer
- Open source contributions you maintain on your personal time
- Hobby projects unrelated to your day job (e.g., your day job is enterprise software; your hobby is consumer mobile apps)
- Creative work (writing, music, design) made on personal time
- Side businesses in different industries

Inventions that typically do NOT qualify:

- Work done at your desk during business hours (even "off the clock")
- Improvements to company products even if developed at home
- Inventions in the company's actual business space
- Anything using confidential information you learned at work
- Anything resulting from work duties (e.g., a side project that's basically a continuation of work you did at the job)

The case-by-case analysis can be nuanced. The statute provides clear protection at the extremes (genuine independent personal projects) and limited protection in gray areas.

## How to use § 2870 in negotiation

When you're being asked to sign an employment agreement with IP assignment:

**1. Request explicit carve-out language.** Even though the statute applies regardless, having it in writing prevents future disputes:

> "This IP assignment does not require assignment of any invention that satisfies the requirements of California Labor Code § 2870, specifically inventions developed entirely on Employee's own time without using Employer equipment, supplies, facilities, or trade secret information, that do not relate to Employer's business or actual or demonstrably anticipated research, and that do not result from work performed for Employer."

**2. Add a Prior Inventions schedule.** List existing inventions, side projects, and open source contributions to exclude them from any future assignment.

**3. Document side projects ongoing during employment.** If you continue side projects after starting, keep clear records: development on personal time, on personal devices, no use of confidential information.

## Other states with similar statutes

Seven other states have statutes similar to California's § 2870:

- **Delaware**: 19 Del. C. § 805
- **Illinois**: 765 ILCS 1060/2
- **Kansas**: K.S.A. § 44-130
- **Minnesota**: Minn. Stat. § 181.78
- **North Carolina**: N.C. Gen. Stat. § 66-57.1
- **Utah**: Utah Code § 34-39-3
- **Washington**: RCW 49.44.140

The details vary by state but the concept is similar: protection for inventions made entirely on personal time without employer resources.

For employees in these states, similar carve-out language applies and similar negotiation strategy works.

## What if the agreement doesn't include carve-out language?

The statute applies in California regardless of what the employment agreement says. If your California agreement requires assignment of "any invention conceived during employment" without the § 2870 carve-out, the assignment as to qualifying inventions is unenforceable.

That said, disputes are easier to prevent than to litigate. If you have known side projects or expect to do creative work outside your employment:

- Get the carve-out language in writing in the agreement
- Disclose prior inventions in a schedule
- Document your side project development on personal time and devices

## What to do next

If you want a delivered analysis of your California employment offer including IP assignment carve-out review, we deliver one in 24 hours for $199. See [Offer Review](https://trycounteroffer.com/offer).

## Sources

- Cal. Lab. Code § 2870
- Cubic Corp. v. Marty, 185 Cal. App. 3d 438 (1986)
- Iconix, Inc. v. Tokuda, 457 F. Supp. 2d 969 (N.D. Cal. 2006)

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## Related answers
- [What is IP assignment in an employment offer?](https://trycounteroffer.com/answers/what-is-ip-assignment)
- [What's negotiable in a job offer?](https://trycounteroffer.com/answers/whats-negotiable-in-job-offer)
- [California non-compete law 2026](https://trycounteroffer.com/answers/california-non-compete-law)

## Get your contract reviewed
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Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time)

_Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice._