My company is trying to pass a policy forbidding distribution of any application (even free) in any appstore for all developers.

Their reasoning is that "outside work activities create a conflict of interest". They don't want that "you use your spare time to work on your app, and once it takes off you quit your job" (quoting the Head of Development).

A few developers (myself included) have already said it was an abusive, pointless and most of all counter-productive policy (developers will actually be demotivated to work here under such control and to be denied of the freedom to distribute their project).

Personally, I think it is actually in the interest of the company to promote side projects (even commercial activities, if there is no conflict).

I'm also curious, is that common practice?

+1  A: 

Unless your employment contract says otherwise, what you develop in your own time belongs to you.

If they are in the business of writing apps for the appstore, then they might have a non-compete argument against you.

If they allow other types of development projects, it is difficult to see the argument as valid.

+2  A: 

Depends on the app and the company.

If you're working for an Android app developer, I'd see why they might not like it. 8)

If it competes directly with what your company produces I can see why they'd prohibit it.

I would consult a lawyer to see just how binding such an agreement would be if you were forced to sign it.

If it's really that odious, your only recourse is to find another employer.

+20  A: 

Needless to say, this is horribly, horribly stupid on so many levels... It may be worth trying to find out whether it's even legal in your jurisdiction.

Anyway and apart from that, if you can, find colleagues who feel the same, and take a stand against it. Try to explain to the management that this is a stupid decision for the company as well. Don't sign anything: A policy like that would probably have to be amended to your work contract to be binding. Chances are, the risk of losing good employees over this outweighs the security they think they get from it.

If there's really nothing that can be done, and you are very unhappy with this (I would be), consider looking for a new job.

As an afterthought, if the practice of limiting your employees' rights to this extent is clearly illegal in your jurisdiction, it could be that simply making them aware of this might stop this without any further trouble.

Exactly right. And since employee departure seems to be what they want to prevent, perhaps the prospect of a mass walk-out will speak some common sense to them.
Agreed, NEVER sign anything. If it wasn't part of the original employment contract, you are not bound by it, and you cannot be forced to sign a new agreement (without them terminating your entire employment contract, which means they need to have cause, etc etc).
This policy is probably non-enforceable (this is not in the contract). I think the idea is to scare the developers who would like to work on their side project (and distribute it).
What are these "employment contracts" you speak of, that require cause to break? No joke, where I live and work (and AFAIK, most of the US) unless you're in a union, you are subject to termination at any time even without cause.
@jasonh I know termination is much, much easier in the US than for example in my native Europe, but surely, when you start to work in a IT company, there will be a contract outlining salary, working hours, etc.?
+3  A: 

I believe there was a similar pointless rule when I was under the corporate yoke. I think these rules are pointless, backward and wrong. Instead of keeping their developers management pushes them to look for new managment, well, at least the passionate and talented ones.

Peter Tillemans
+6  A: 

While this example sounds a little draconian, it is not uncommon for companies to have some kind of policy regarding outside work. However, this is typically to protect the company from your mistakes rather than to protect them from your departure. If they're that concerned about employees leaving, they should go out of their way to make it the sort of place you would want to stay.

EDIT: I just found this today on a completely unrelated blog, but it totally rings true to this discussion. It's about 11 minutes long, but very entertaining and makes you think too. The TL;DR (TL;DW?): Once you get outside the realm of purely physical tasks, organizations that assume you are motivated by money, hands-on direction, etc. will not accomplish their goals nearly as easily as those that assume you are motivated by desires for autonomy (self-direction, self-management), mastery (getting better at doing something) and contribution to something bigger than yourself.

+1, for the last sentence especially.
Sorry @Pekka, it's not the last sentence anymore. :)
+11  A: 

All companies for which I have worked allowed outside work provided:

  • no company resources were used (this includes time)
  • the product of that effort did not directly conflict with the company's interest
  • the product was not based off of work or specific knowledge gained while working for the company

Typically, companies have a clause in your employment agreement that states that you will inform them when you begin work on outside projects and inform them of the nature so they can approve/deny. In such cases, you want to get that approval in writing.

In your case, this is a pretty difficult situation if this was part of your employment agreement. Even if it isn't, they can fire you for it if your employment is at-will and they find out. Unfortunately, in your situation, you seem to have one of four options:

  • Convince management that they are being unreasonable.
  • Fly under the radar and hope you don't get caught.
  • Find a new job.
  • Quit and just work on the apps full-time.

If your job is to put out apps in an appstore, though, there's really no way to argue that your outside development of apps for the same appstore isn't a conflict of interest in some respect. If I had to guess, I'd say that either this is the case or you're working for a development manager that doesn't understand the mindset of developers and how they like to tinker and learn outside of work.

+1 these are perfectly reasonable limitations. A blanket ban on outside work, IMO, is not.
+1 good balanced comment. It's too easy to see this as bad stupid dev manager and poor aggrieved developer, but it could be very damaging for the employer - imagine the OP's own app building business takes off, he employs someone and finds out they are working 16 hours outside work on a gardening business which means they are not focused at work and their productivity drops. It's also probably not true that the employer cannot change the terms of the contract, or would even need to. I bet there is a catch all phrase which could be applied to this situation.
Simon, the concern that some developers could be not focused is understandable. BUT this should IMHO be dealt with on a case-by-case basis. Otherwise I argued we should forbid all kind of outside work activities (having a family, playing sports, involvement in community).
One company I worked for had a "right of first refusal" clause. In a nutshell, if I had a concept for something, I was obligated to offer it to the company first. If they decided not to go forward (with a 30-day analysis/review period) then I was free to do with it whatever I wanted.
+1  A: 

Check your local labor laws. In California, this kind of thing is blatantly illegal.

The policy enumerated by Shaun is reasonable, and something very similar has been in place at most of my previous employers. The one place that tried something like this was quickly pointed at the statute by knowledgable developers, and the "policy" quietly went away.