Can a New Jersey employer require assignment of every invention?
No. New Jersey's invention-assignment statute, N.J.S.A. 34:1B-265, effective April 1, 2018, carves out a category of inventions that an assignment clause simply cannot reach: anything the employee develops entirely on their own time, without using the employer's equipment, supplies, facilities, or information, including any trade-secret information, that neither relates to the employer's business or actual or demonstrably anticipated research or development nor results from work performed on the employer's behalf. To the extent a clause purports to capture those own-time inventions, it is deemed against the public policy of the state and unenforceable. On a touch screen, a tap shows all 2 sources in this group.
Subsection a.(1) frames the carve-out as a limit on what an assignment promise can do. However broadly the contract is written, it does not reach an invention the employee made on their own time and with their own resources unless one of two statutory exceptions applies .
The two exceptions are joined disjunctively. An own-time invention falls back within the employer's reach if it either relates to the employer's business or anticipated research or development, or results from the employee's work .
Subsection a.(2) supplies the teeth. A provision that tries to require assignment of an invention the statute excludes is not merely unenforceable as written but declared against the public policy of the state .
Section 34:1B-265 closely tracks California Labor Code § 2870 and New York Labor Law § 203-f — the own-time, own-resource carve-out and the same two business-or-work exceptions. New Jersey's operative remedy is to render the offending provision unenforceable to the extent it overreaches, and the statute speaks only of unenforceability rather than of any judicial blue-pencil or reformation. A New Jersey drafter should not assume a court will rewrite an overbroad provision into a compliant one rather than simply declining to enforce it, so the assignment language should be confined to what the statute allows on its face.
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N.J.S.A. 34:1B-265(a)(1) makes an assignment clause inapplicable to an invention the employee develops entirely on their own time, without using the employer's equipment, supplies, facilities, or information (including trade-secret information), unless the invention relates to the employer's business or actual or demonstrably anticipated research or development, or results from work the employee performed on the employer's behalf.
Any provision in an employment contract between an employee and employer, which provides that the employee shall assign or offer to assign any of the employee's rights to an invention to that employer, shall not apply to an invention that the employee develops entirely on the employee's own time, and without using the employer's equipment, supplies, facilities or information, including any trade secret information, except for those inventions that: (a) relate to the employer's business or actual or demonstrably anticipated research or development; or (b) result from any work performed by the employee on behalf of the employer.
See N.J.S.A. 34:1B-265(a)(1).
N.J.S.A. 34:1B-265(a)(2) declares that a provision purporting to apply to an employee invention within the statutory carve-out is deemed against the public policy of the state and shall be unenforceable.
To the extent any provision in an employment contract applies, or intends to apply, to an employee invention subject to this subsection, the provision shall be deemed against the public policy of this State and shall be unenforceable.
See N.J.S.A. 34:1B-265(a)(2).
Must a New Jersey employer notify the employee?
No. This is the key contrast with California, which requires a written notice under Labor Code § 2872, and Washington, which requires one under RCW 49.44.140(3). New Jersey's § 34:1B-265 contains no notice, disclosure, or burden-shifting requirement of any kind. Its consequences are that a provision overreaching the carve-out is against public policy and unenforceable, and that an employer may not require such a void provision as a condition of employment; the validity of a compliant clause does not depend on any notice to the employee .
The statute is short and self-contained. Subsection a. defines which inventions an assignment clause cannot reach and declares an overreaching provision unenforceable, and subsection b. bars an employer from requiring a void provision as a condition of employment or continued employment. Nowhere does § 34:1B-265 condition the carve-out, or the validity of a permissible assignment clause, on the employer giving the employee any notice .
The contrast with the two notice states is worth flagging, because a multistate employer that built its form around the California § 2872 or Washington RCW 49.44.140(3) notice may carry that language into New Jersey and assume it is required here. It is not. The absence of a notice requirement cuts the other way too: a New Jersey employer cannot cure an overbroad assignment clause by giving notice of the carve-out, because § 34:1B-265 makes the offending provision unenforceable regardless of what the employee was told. The statute's silence on notice means the work is done entirely by the scope of the assignment language itself.
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N.J.S.A. 34:1B-265(b) bars an employer from requiring a void provision as a condition of employment or continued employment, but the statute imposes no notice, disclosure, or burden-shifting requirement — a compliant assignment clause's validity does not turn on any notice to the employee.
No employer shall require a provision made void and unenforceable by this act as a condition of employment or continued employment.
See N.J.S.A. 34:1B-265(b).
Who owns an invention by default in New Jersey?
The inventor. Absent a written assignment, the baseline rule under federal patent law — which governs who holds title to a patentable invention in New Jersey as elsewhere — is that rights belong to the employee who conceived it. The U.S. Supreme Court restated that premise in Stanford v. Roche, and although others may acquire an interest, that interest must trace back to the inventor. New Jersey's own law agrees: in Kinkade v. New York Shipbuilding Corp., the Supreme Court held that the mere fact of employment gives the employer no title, that the invention belongs to the employer only where the employee was engaged to invent, and that otherwise the employer takes at most an equitable shop right to use — not own — the invention. On a touch screen, a tap shows all 2 sources in this group.
Stanford v. Roche anchors the default. The Court held that the Bayh-Dole Act did not displace the long-standing rule that an invention belongs to its inventor, treating that premise as the baseline against which any assignment must be measured .
Because ownership starts with the inventor, an employer's title is derivative: it exists only if and to the extent the employee assigned it. Any third-party interest in the invention must trace back to that inventor-grantor .
New Jersey's own law follows the same path. In Kinkade, the Supreme Court confirmed that an invention conceived during employment does not, by that fact alone, pass to the employer .
The narrow exception is the hired-to-invent situation, drawn from the same federal common law New Jersey applies. Where the employee was engaged specifically to make the invention and succeeds during the term of service, the resulting patent is owed to the employer .
Where the employee is not hired to invent, the employer is not necessarily empty-handed. Kinkade recognizes the equitable shop right: when the employee developed the invention during working hours with the aid of fellow employees and the use of the employer's machinery and materials, the employer obtains an irrevocable but non-exclusive right to the invention .
But a shop right is only a non-exclusive right to use, not ownership, and the hired-to-invent doctrine is fact-intensive and narrow. Neither is a substitute for a written clause. The dependable path for a New Jersey employer is a written present-assignment (hereby assigns) clause — present-tense language that transfers legal title automatically on conception, rather than a future promise to assign — operating within the boundaries § 34:1B-265 imposes.
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Stanford v. Roche confirms the long-standing premise of U.S. patent law that rights in an invention belong to the inventor.
Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
Stanford v. Roche holds that although others may acquire an interest in an invention, that interest as a general rule must trace back to the inventor — so an employer takes title only through an assignment from the employee-inventor.
Thus, although others may acquire an interest in an invention, any such interest — as a general rule — must trace back to the inventor.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
Kinkade v. New York Shipbuilding Corp. holds that the mere fact an invention was conceived and developed while the inventor was employed by another does not give the employer any right in or title to the invention.
the mere fact that an invention was conceived and developed while the inventor was employed by another does not give to the employer any right in or title to the invention.
See Kinkade v. New York Shipbuilding Corp., 21 N.J. 362 (1956).
Kinkade v. New York Shipbuilding Corp. recognizes the shop right rule: where the employee developed the invention during working hours with the aid of fellow employees and the employer's machinery and materials, the employer has an irrevocable but non-exclusive right to the invention — a right to use, not ownership.
In the first case the invention belongs to the employer; in the second instance, and this is the “shop right rule,” the employer has an irrevocable but non-exclusive right to the invention.
See Kinkade v. New York Shipbuilding Corp., 21 N.J. 362 (1956).
Dubilier states the hired-to-invent doctrine: an employee engaged to make an invention who succeeds during the term of service is bound to assign the resulting patent to the employer.
One employed to make an invention, who succeeds, during his term of service, in accomplishing that task, is bound to assign to his employer any patent obtained.
See United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933).
Are trailing-assignment (holdover) clauses enforceable in New Jersey?
Only so far as they are reasonable. New Jersey settled this in Ingersoll-Rand Co. v. Ciavatta, where the Supreme Court held that a post-employment holdover clause requiring an employee to assign inventions made after leaving is enforceable only when reasonable , applying the same three-prong test used for noncompetition covenants, which comes from Solari Industries, Inc. v. Malady and Whitmyer Bros., Inc. v. Doyle : the restraint must protect a legitimate interest of the employer, impose no undue hardship on the employee, and not be injurious to the public. Courts strictly construe such trailing-assignment provisions, and Ciavatta itself declined to enforce the clause because it worked an undue hardship on the departed employee. On a touch screen, a tap shows all 2 sources in this group.
Start with the governing standard. Ciavatta holds that a holdover clause is enforceable only when reasonable, and that reasonableness is measured by the three-prong test New Jersey applies to noncompetition covenants .
The three prongs come from New Jersey's restrictive-covenant law. A restraint is reasonable only if it protects the employer's legitimate interests, imposes no undue hardship on the employee, and is not injurious to the public .
Because a holdover clause reaches an employee's post-employment work, Ciavatta also directs courts to read such provisions narrowly. A contractual provision requiring assignment of post-employment inventions is strictly construed and must be fair, reasonable, and just .
So the New Jersey limit on holdover clauses is reasonableness, applied through a settled three-prong test rather than a statutory ceiling as in California or an open void as in a state with no statute at all. A trailer clause narrowly tied to inventions conceived during employment, or to a short and defined trailing period for inventions derived from the employer's confidential information, stands on far firmer ground than an aggressive provision that sweeps in an ex-employee's independent post-employment inventions and thereby functions as a disguised noncompete. Ciavatta itself refused to enforce the holdover clause on its facts, an outcome that underscores how far short of an assign-everything tail the reasonable line falls.
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Ingersoll-Rand Co. v. Ciavatta holds that a post-employment holdover agreement is enforceable only when reasonable, and that reasonableness is determined by the three-prong Solari/Whitmyer test New Jersey applies to noncompetition covenants.
In sum, we conclude that holdover agreements are enforceable when reasonable, and that in determining if the post-termination restriction is reasonable, we will apply the three-prong test of Solari/Whitmyer.
See Ingersoll-Rand Co. v. Ciavatta, 110 N.J. 609 (1988).
Ingersoll-Rand Co. v. Ciavatta states the Solari/Whitmyer three-prong reasonableness test: a covenant is reasonable if it protects the legitimate interests of the employer, imposes no undue hardship on the employee, and is not injurious to the public.
a court will find a noncompetition covenant reasonable if it “simply protects the legitimate interests of the employer, imposes no undue hardship on the employee and is not injurious to the public.”
See Ingersoll-Rand Co. v. Ciavatta, 110 N.J. 609 (1988).
Ingersoll-Rand Co. v. Ciavatta holds that courts strictly construe contractual provisions requiring assignment of post-employment inventions, which must be fair, reasonable, and just.
Moreover, courts strictly construe contractual provisions that require assignment of post-employment inventions; they must be fair, reasonable, and just.
See Ingersoll-Rand Co. v. Ciavatta, 110 N.J. 609 (1988).
Solari Industries, Inc. v. Malady states the New Jersey test for an employee's noncompetition covenant: it is reasonable where it protects the employer's legitimate interests, imposes no undue hardship on the employee, and is not injurious to the public.
It will generally be found to be reasonable where it simply protects the legitimate interests of the employer, imposes no undue hardship on the employee, and is not injurious to the public.
See Solari Industries, Inc. v. Malady, 55 N.J. 571 (1970).
Whitmyer Bros., Inc. v. Doyle applies the Solari test and holds that an employer seeking to enforce a noncompetition covenant must show that the restraint protects its legitimate interests, imposes no undue hardship on the employee, and does not injure the public.
But under the controlling principles, the employer was not entitled to preliminary restraint unless it made a suitable showing that such restraint was necessary to protect its legitimate interests and that it would not impose undue hardship on the employee or injure the public.
See Whitmyer Bros., Inc. v. Doyle, 58 N.J. 25 (1971).
N.J.S.A. 34:1B-265(a)(2) declares that a provision purporting to apply to an employee invention within the statutory carve-out is deemed against the public policy of the state and shall be unenforceable.
To the extent any provision in an employment contract applies, or intends to apply, to an employee invention subject to this subsection, the provision shall be deemed against the public policy of this State and shall be unenforceable.
See N.J.S.A. 34:1B-265(a)(2).
Do not paper a New Jersey employee with an out-of-state assign-everything invention-assignment form. Section 34:1B-265 voids an overbroad clause to the extent it overreaches, and New Jersey gives no reliable blue-pencil to rewrite a violating provision, so limit the assignment to what the statute actually allows and expressly carve out the protected own-time inventions in the text itself . New Jersey does not require a § 2872-style notice, but a holdover or trailer clause reaching inventions conceived after employment ends is tested under Ingersoll-Rand v. Ciavatta and pared to what protects a legitimate interest without undue hardship on the employee — keep any trailing assignment narrow, short, and tied to the employer's confidential information rather than sweeping in an ex-employee's independent work .
What does federal law require a confidentiality and invention assignment agreement in New Jersey to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can restrict. The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
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An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).