A PIIA agreement — short for Proprietary Information and Inventions Agreement — is a contract between a company and a worker that does two things at once. It requires you to keep the company’s sensitive information confidential, and it transfers ownership of anything you invent or create during the job from you to the employer. Most tech companies, startups, and research-driven businesses require every new hire and contractor to sign one before their first day.
How a PIIA Differs From an NDA or Non-Compete
People often lump PIIAs in with non-disclosure agreements and non-competes, but a PIIA is broader than either. A standalone NDA only handles confidentiality. It says “don’t share our secrets” and stops there, saying nothing about who owns what you build. A non-compete restricts where you can work after you leave, usually for a set period and within a defined geographic area. A PIIA bundles confidentiality, invention assignment, and often non-solicitation into a single document, which makes it the most far-reaching of the three.
The distinction matters because non-competes face growing legal hostility, while PIIAs remain broadly enforceable. PIIAs focus on protecting specific information and intellectual property ownership rather than restricting your ability to earn a living somewhere else, and courts treat that difference seriously.
What Counts as Proprietary Information
The confidentiality half of a PIIA defines “proprietary information” broadly. It typically sweeps in source code, engineering designs, product roadmaps, customer lists, pricing models, financial projections, and internal marketing research. It also covers trade secrets, which every state except one has defined through some version of the Uniform Trade Secrets Act. Information qualifies as a trade secret when it derives economic value from not being publicly known and the company takes reasonable steps to keep it secret.
The line that trips people up is the one between proprietary information and general knowledge. Your broad skills, industry expertise, and professional know-how belong to you, even if you sharpened them on the job. What you cannot take is the company’s specific internal methodology: their particular pricing algorithm, their proprietary testing process, or the exact contents of a customer database. Courts look at whether you had the skill before you started, whether the information was actually used in business operations, and whether you physically removed documents versus simply remembering general concepts. If the knowledge would be available to any competent professional in the field, it probably isn’t protectable.
How Invention Assignment Works
The assignment clause is the centerpiece of every PIIA. It transfers ownership of anything you create during your employment — software, hardware designs, written content, processes — from you to the company. Most agreements use “present assignment” language such as “I hereby assign,” which makes the transfer happen automatically at the moment of creation rather than requiring a separate future act.
Federal copyright law reinforces this through the work-made-for-hire doctrine. Under the Copyright Act, a work prepared by an employee within the scope of employment belongs to the employer from the start, and the employer is legally treated as the author.1Office of the Law Revision Counsel. U.S. Code Title 17 Section 201 – Ownership of Copyright The PIIA’s assignment clause reaches further than copyright alone by also covering patentable inventions and other IP. Federal law requires patent assignments to be made in writing, and recording the assignment with the Patent and Trademark Office protects the company against later competing claims.2Office of the Law Revision Counsel. U.S. Code Title 35 Section 261 – Ownership; Assignment
Independent Contractors Are Different
The work-made-for-hire doctrine does not automatically apply to independent contractors the way it does to employees. For a contractor’s work to qualify as work made for hire under the Copyright Act, it must fall into one of nine specific categories — things like contributions to a collective work, translations, compilations, or parts of an audiovisual work — and both parties must sign a written agreement stating the work is made for hire.3Office of the Law Revision Counsel. U.S. Code Title 17 Section 101 – Definitions If the work doesn’t fit one of those categories, the company needs an explicit assignment clause to actually obtain ownership. A vague or missing clause can leave a contractor holding the copyright.
Holdover and Trailer Clauses
Some PIIAs include a “holdover” or “trailer” clause that stretches the invention assignment beyond your last day. If you quit on Friday and file a patent application on Monday for something you actually conceived while employed, the company has a strong argument that the invention belongs to them. Holdover clauses formalize this by creating a window, often six months to one year after departure, during which inventions related to the employer’s business may still be assigned back.
Courts have pushed back on aggressive versions of these clauses. Agreements requiring assignment of all inventions for an indefinite period have been struck down as contrary to public policy, and even time-limited clauses have been voided in some jurisdictions when they covered inventions unrelated to the former employer’s trade secrets. If you’re leaving a job with a holdover clause, document exactly when a new idea was first conceived and avoid overlap with the former employer’s business area during the window.
Legal Limits on What a PIIA Can Take
State Carve-Outs for Personal Inventions
State law places meaningful limits on what a PIIA can claim. California’s version is the most well known. Under its Labor Code, an employer cannot require assignment of an invention that an employee developed entirely on their own time, without using company equipment, facilities, or trade secrets.4California Legislative Information. California Code Labor Code 2870 – Inventions Made by an Employee Roughly a dozen other states, including Delaware, Illinois, Minnesota, Washington, and North Carolina, have similar protections. These statutes share a common structure: the invention must not relate to the employer’s current or anticipated business, and it must not result from the work you were hired to do.
If an invention does relate to the employer’s business or was developed using company resources, these protections don’t apply, even if you built it at home over a weekend. The statutory protection is narrower than people assume. Many PIIAs are required to include a written notice of these rights, often as an attachment at the end of the agreement. If your state requires such a notice and your PIIA doesn’t include one, that omission can work in your favor during a dispute.
Your Right to Discuss Working Conditions
A PIIA’s confidentiality language cannot override your rights under the National Labor Relations Act. Section 7 of the NLRA guarantees employees the right to engage in “concerted activities” for mutual aid or protection, which includes discussing wages, hours, and working conditions with coworkers.5National Labor Relations Board. Interfering With Employee Rights – Section 7 and 8(a)(1) If a PIIA defines “proprietary information” so broadly that it could be read to prohibit you from talking about your pay or workplace safety concerns, that provision is unenforceable.
The NLRB has taken an aggressive stance here. In its 2023 McLaren Macomb decision, the Board held that even offering an agreement with overbroad confidentiality provisions that could chill Section 7 rights constitutes an unfair labor practice, regardless of whether the employer ever tries to enforce them. Supervisors and independent contractors fall outside the NLRA’s protections, but most private-sector employees are covered.
Whistleblower Immunity Notice
The Defend Trade Secrets Act includes a requirement that catches many employers off guard. Any contract governing trade secrets or confidential information, which includes essentially every PIIA, must notify the worker that federal law provides immunity for disclosing trade secrets to a government official or an attorney for the purpose of reporting a suspected legal violation.6Office of the Law Revision Counsel. U.S. Code Title 18 Section 1833 – Exceptions to Prohibition The immunity also covers disclosures made under seal in a lawsuit.
The penalty for skipping the notice falls on the employer, not the employee. A company that fails to include the required language forfeits its right to recover exemplary damages, up to double the actual damages, and attorney fees in any trade secret misappropriation claim against that employee.7Office of the Law Revision Counsel. U.S. Code Title 18 Section 1836 – Civil Proceedings Check whether your PIIA includes this language; its absence significantly limits your employer’s remedies if a dispute ever arises.
The Prior Inventions Exhibit
Every PIIA includes a section, usually labeled “Exhibit A” or “Prior Inventions,” where you list any intellectual property you already own before starting the job. This is your one chance to carve out personal projects from the agreement’s reach. Describe each item clearly enough to identify it, using name, general function, and relevant dates, without revealing your own confidential details.
Do not leave this section blank unless you genuinely have nothing to list. Many PIIAs include language stating that if no prior inventions are disclosed, you represent that none exist.8U.S. Securities and Exchange Commission. GlobeImmune Employee Proprietary Information and Inventions Agreement That representation makes it much harder to later argue that your side project predated employment. If you’re a developer with personal GitHub repositories, a designer with freelance work, or anyone with a patent application in progress, list it.
Enforceability and Your Leverage
Like any contract, a PIIA needs consideration to be enforceable. For new hires, the job itself serves as consideration: you get employment, the company gets your signature. This is straightforward and rarely challenged.
The situation gets trickier when a company asks a current employee to sign a PIIA for the first time, or to sign an updated version with broader terms. Some states accept continued at-will employment as sufficient consideration. Others do not, and in those jurisdictions the company may need to offer something additional, such as a raise, a bonus, or stock options, to make the new agreement stick. If your employer hands you a PIIA years into your tenure with nothing new offered in return, that agreement may not hold up.
Refusing to sign a PIIA as a new hire generally allows the employer to rescind the job offer. For existing employees in at-will states, refusal can be grounds for termination. Your practical leverage to negotiate the terms is before you accept the offer, not after.
What Continues After You Leave
The PIIA’s obligations don’t end with your last paycheck. You’ll typically need to return all company property (laptops, phones, storage devices, access badges) and delete company files from personal devices, cloud accounts, and email. Most agreements spell out these return procedures explicitly.
The confidentiality obligation survives indefinitely through a “survival clause.” Your duty to protect proprietary information continues for as long as the information remains a trade secret. This is not a formality. The Defend Trade Secrets Act gives companies a federal cause of action for misappropriation, with remedies that include injunctions and actual damages for economic harm.7Office of the Law Revision Counsel. U.S. Code Title 18 Section 1836 – Civil Proceedings If the misappropriation is willful and malicious, a court can award up to double the actual damages plus attorney fees.
Some PIIAs also include non-solicitation provisions that restrict you from recruiting former colleagues or contacting the company’s clients for a period after departure. These are enforceable in most states as long as they’re reasonable in duration and scope, though standards vary significantly by jurisdiction. Pay attention to the specific time frame and how “solicitation” is defined; some clauses reach broadly enough to include accepting an inbound inquiry from a former client, not just initiating contact.
What to Check Before You Sign
Most people sign a PIIA without reading it carefully, which is understandable when you’re excited about a new job and buried in onboarding paperwork. A few minutes of review can prevent real problems later. Focus on these points:
- Definition of “inventions.” Does it cover only inventions related to the company’s business, or everything you create during the employment period regardless of relevance? The broader the definition, the more you’re giving up.
- Prior inventions exhibit. Fill it out completely. List every personal project, side business, or pending patent application you want to protect.
- Holdover clause. Check whether the assignment obligation extends beyond your departure date, and for how long. Anything over 12 months should raise a flag.
- Whistleblower notice. Confirm it’s included. Its absence limits the company’s remedies against you under the DTSA.6Office of the Law Revision Counsel. U.S. Code Title 18 Section 1833 – Exceptions to Prohibition
- State-specific invention protections. Look for the required statutory notice at the end of the agreement. If your state protects personal inventions and the PIIA doesn’t acknowledge it, the assignment clause may be partially unenforceable.4California Legislative Information. California Code Labor Code 2870 – Inventions Made by an Employee
- Non-solicitation terms. If included, note the duration and whether they cover only employees, only clients, or both.
If any provision looks unusually broad, a short conversation with an employment attorney before you sign is worth the cost. Once you’ve started work, both your leverage and the company’s willingness to accommodate concerns drop sharply.