Why do Contractors become contractors or why I think the employee/employer relationship is flawed ?

What’s your main asset as a coder ? Your brain !

You use your brain to analyze problems, to design innovative solutions, to come up with business value adding ideas …
The sad thing is that as an employee, your ideas, basically your brain your most valuable asset is owned by by your employer.

Why is your brain your main asset ?

You’ve invested a lot in your brain. Countless hours studying, and learning new subjects. You and/or your parents have spent a great deal on your education and training. Accounting for all the hours and tuition money you may well have invested over $300,000 building the right synapses that make you the professional you are today.

The same way muscles are the major factor of success in the career of a football player, your brain will decide of your future as a coder or software professional. You’ve been taking good care of it, nurturing it and protecting it.
As a coder, you are a knowledge worker. Your knowledge, your experience, your skills is what you rent or sell for a living.

So if your brain is your main asset , why are you giving it away for free ?

Why doesn’t your brain belong to you anymore ?

Have you read the fine prints on your formal employment agreement or offer letter. It refers to a document that you’ve signed on the first day of employment: Non Disclosure and Invention Assignment Agreement also called Proprietary Information and Invention Agreement.


I have nothing against the non disclosure clause. I consider non-disclosure of information you’re entrusted with by a third party, the corner stone of any relationship, personal or professional. Integrity is built on non-disclosure .

Now, on the other hand, from the stand point of a software developer, proprietary and invention agreement is a rip-off agreement !

The proprietary and invention agreement basically assigns to the company all rights to any invention that results from work performed for the employer or work that relates to the employer’s current business or demonstrably anticipated research and development.

It is the worst type of agreement you can signed as a knowledge worker. You’ve been investing and improving this beautiful house that is your brain and your just handing out the keys to your employer. Ho, but wait, I’m getting a rent in return, my salary . Yes, you are getting a rent but your also giving away your property title … remember the Invention Agreement, you’re not getting a return on your investment, your employer is !

Let’s illustrate this with an example. As a direct result of you hard work and passion, you’re in a position to file a patent.
You go ahead and according to the agreement you signed, your name is on the patent but the patent belongs to your employer.
If you’re lucky, your employer has incentives in place and you get a couple of thousand dollars. On the other hand, your employer, gets all future rights to the invention and its lucrative derivatives. In addition, having an additional patent in its portfolio increases its competitive advantages and its valuation. Guess who wins ?

But enough with materialistic consideration, what about your soul ?

Loosing your soul … corporate politics

I their great study of knowledge contractors in the Silicon Valley, S. Barley and G. Kunda, interviewed several contractors to understand why in the first place they had decided to “escape the world of full time employment”. They report that “politics” is cited as the most common motif for moving into the world of contracting. “Politics” , they say, “is best understood as a cover term for the myriad ways in which personal agendas and interests undermine technical rationality as a a criterion for action Contractors’ complaints about politics often targeted managers. The perception that managers acted to further their own interests was so wide spread that contractors frequently portrayed technical professionals as pawns in management’s political game” .


On his blog, Marc Dangeard, a Senior Advisor dedicated to Entrepreneurs as he describes himself, writes about politics within the corporation. Taking the recent example of Societe Generale he explains why “the whole corporate system is conceived to promote people who do not take risk” and how “in such an environment doing nothing also means letting your reports do things that may not be 100% ethical as long as you can maintain an ability to claim ignorance”.
He finishes on a bright note “let’s hope that the changes brought by Social Networking and Peer-to-peer collaboration will bring us better systems to organize how we work together…“

What can you do about it ?

If you decide to stay an employee, not much, unfortunately.
It is your employer who has the lawyers, the cash and who is making the rules of the game, and guess what, the rules are not drafted in your favor ;-( .

Ok, this was a little overstated and on the dark side, I admit it.

There are actually a couple of things you can do to protect your self and your investment:

1. legal: make sure you disclose, in writing in the proprietary agreement, all invention from prior to your employment. In this way your employer will not be able to claim rights on work/research you did prior to joining,
2. intellectual property: make sure you never, ever use your employer time/facilities/computers/network/pen to work on an idea you have, wait until you live the company to file a patent,
3. education/training: make your employer pay for as much training and education as possible.

But if you really want to cash on your investment, escape to contracting or launch your own company!