By Milan Chatterjee | Founding Attorney, Milan Legal |
Employment agreements do not travel between these two states unchanged. The same paragraph, in the same document, can be the default position in Nevada and unenforceable in California, and in one case the party who needs the written agreement swaps sides entirely.
Four clauses below, with the statute on each side. The non-compete and the governing law clause are the two most asked about, and they are dealt with in full elsewhere rather than repeated here.
1. The Invention Clause Works in Reverse
This is the one that surprises people, because the two states do not simply differ in degree. They start from opposite defaults.
In Nevada, NRS 600.500 provides that except as otherwise provided by express written agreement, an employer is the sole owner of any patentable invention or trade secret developed by an employee during the course and scope of the employment that relates directly to work performed during the course and scope of the employment. Read that carefully. The employer owns it by default. No clause is needed. Employment agreements in Nevada are what an employee would need in order to carve anything back.
California inverts it. Labor Code 2870(a) provides that a provision requiring an employee to assign or offer to assign rights in an invention does not apply to an invention the employee developed entirely on their own time without using the employer’s equipment, supplies, facilities or trade secret information. There are two exceptions: inventions that relate, at the time of conception or reduction to practice, to the employer’s business or to its actual or demonstrably anticipated research or development, and inventions that result from work performed by the employee for the employer. Under 2870(b), a provision purporting to require assignment of an invention otherwise excluded is against the public policy of this state and unenforceable.
And California adds a disclosure duty most employers miss. Under Labor Code 2872, where an employment agreement entered into after January 1, 1980 contains an assignment provision, the employer must, at the time the agreement is made, provide written notification to the employee that the agreement does not apply to an invention qualifying fully under section 2870. The same section places the burden of proof, in any suit arising under it, on the employee claiming its benefits.
So the identical assignment clause has opposite consequences. In Nevada it is largely confirming a default the statute already supplies. In California it is limited by statute no matter how it is drafted, and the employer has to say so in writing when the employee signs.
2. In California You Can Demand a Copy. In Nevada You Cannot.
Under California Labor Code 432, an employee or applicant who signs an instrument relating to obtaining employment is entitled to a copy of that instrument upon request. The condition is simply that they ask.
Nevada has no equivalent statute. Which means a Nevada employee can sign an agreement at onboarding, never be handed a copy, and have no statutory route to one. In practice that is how a surprising number of people discover what their restrictive covenant says only when someone tries to enforce it.
It is a small provision with a disproportionate effect on everything else about employment agreements on this page. Every other comparison here assumes the employee can read the clause. In Nevada that assumption rests on the employer’s goodwill rather than on a statute.
3. California Requires a Written Notice at Hire. Nevada Does Not.
This obligation sits beside the agreement rather than inside it, but it arrives at the same moment employment agreements are signed, so it belongs on the list.
California Labor Code 2810.5 requires an employer, at the time of hiring, to provide each employee a written notice in the language the employer normally uses to communicate employment-related information. The notice must cover the rate or rates of pay and how pay is calculated, including overtime rates; any allowances claimed as part of the minimum wage for meals or lodging; the regular payday; the employer’s name, including any names under which it does business; the physical address of the main office or principal place of business, and a mailing address if different; the telephone number; the name, address and telephone number of the workers’ compensation carrier; the employee’s rights to accrue and use paid sick leave, to be free from retaliation, and to file a complaint; any federal or state emergency or disaster declaration applicable to the employee’s county, issued within 30 days before the first day of work, that may affect health and safety; and anything further the Labor Commissioner requires.
Nevada imposes no comparable at-hire notice. A Nevada employer that satisfies every obligation discussed in its employment agreements can still hand a new hire nothing but the agreement itself. A California employer doing the same has missed a statutory requirement on day one.
Where These Clauses Get Settled
Each of the four is decided when employment agreements are drafted, and argued about when someone leaves.
4. California Dictates What the Agreement May Not Say
Government Code 12964.5 does something the other three do not: it regulates the wording itself, and it requires particular words to be present.
Under subdivision (a), it is an unlawful employment practice for an employer, in exchange for a raise or bonus or as a condition of employment or continued employment, to require an employee to sign a release of a claim or right under the Fair Employment and Housing Act. A release of a claim or right includes requiring a statement that the employee has no claim against the employer, and releasing the right to file a civil action or a complaint with a court or government agency. It is equally unlawful to require a non-disparagement agreement or similar document that has the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace. Such agreements are contrary to public policy and unenforceable.
The statute then specifies language that must appear. Any provision restricting disclosure of information about conditions in the workplace must include, in substantial form, a statement that nothing in the agreement prevents the employee from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct the employee has reason to believe is unlawful.
Subdivision (b) extends this to separation agreements, with two practical requirements alongside it. A general release or waiver of all claims remains permitted where it is otherwise lawful and valid. But the employer must notify the employee of the right to consult an attorney, and must give at least five business days to do so, unless the employee knowingly and voluntarily elects to sign sooner.
There are boundaries. Under subdivision (d) the section does not reach a negotiated settlement of a claim already filed in court, before an administrative agency, in alternative dispute resolution or through an employer’s internal complaint process, where the settlement is voluntary, deliberate and informed, provides consideration of value, and the employee had notice and an opportunity to retain counsel or was represented. Under subdivision (e) the sum paid under a severance agreement may still be kept confidential, and under subdivision (f) trade secrets, proprietary information and confidential information not involving unlawful acts in the workplace may still be protected.
Nevada has no state statute governing the wording of employment agreements or separation agreements in this way. The constraints that do apply in Nevada are federal, and the arbitration and confidentiality provisions that may not bind a Nevada employee are set out at hostile work environment in Nevada.
What This Employment Agreements Guide Leaves Out
Three things belong to the subject and are covered properly elsewhere, and restating them here would make this page compete with a better one.
Whether a non-compete in the agreement is enforceable, and whether a Nevada governing law clause survives contact with a California employee, are the two questions most people arrive with. Nevada’s position under NRS 613.195 and California’s under Business and Professions Code 16600 and 16600.5, together with Labor Code 925 on choice of law and venue, are set out at Nevada and California contract law.
Which obligations attach to the employer at all is a headcount question rather than a drafting one, and the thresholds are at workplace rights and responsibilities. And the federal consideration and revocation periods that apply when a separation agreement asks an employee aged 40 or over to waive an age discrimination claim are at common legal mistakes Nevada businesses make.
Employment Agreements: What the Four Clauses Share
California legislates the contents of employment agreements and Nevada largely does not. On inventions it limits what the clause can reach and requires the employer to disclose the limit. On copies it gives the employee a right to the document. At hire it requires a notice whether or not an agreement exists. And on wording it voids certain provisions and mandates the presence of others.
Nevada supplies defaults instead and leaves the document to the parties, which cuts both ways. Employment agreements drafted for Nevada have more room, and an employee in Nevada has correspondingly less statutory protection against what is in them.
The operational consequence for anyone with staff on both sides is that a single document will tend to be adequate in Nevada and deficient in California, rather than the reverse, and the deficiency is usually an omission rather than an overreach: a notice not given, a carve-out sentence not included, a copy not provided.
The Milan Legal Perspective
Most writing on employment agreements lists what they should contain. Very little of it says which sentences stop working when the employee is in the other state, which is the only question that matters to anyone operating across the line.
Milan Chatterjee is licensed in Nevada and California, a UCLA School of Law graduate and former Associate Compliance Counsel at a Fortune 500 company, with earlier experience at Las Vegas Sands. He has served on the Nevada Supreme Court’s Access to Justice Commission and in the leadership of the South Asian Bar Association of Las Vegas. Dual admission matters on this particular topic for a narrow reason: the four differences above are all omissions rather than conflicts, and an omission is not something a Nevada-drafted agreement reveals on its face. Nothing in the document says that a notice is missing.
Frequently Asked Questions
California legislates their contents and Nevada mostly does not. Labor Code 2870 limits what an invention assignment clause can reach and 2872 requires the employer to disclose that limit in writing. Labor Code 432 entitles an employee to a copy of what they signed on request. Labor Code 2810.5 requires a written notice at hire. Government Code 12964.5 voids certain release and non-disparagement provisions and requires specific carve-out wording. Nevada supplies statutory defaults instead and leaves the drafting to the parties.
Your employer, by default. NRS 600.500 provides that except as otherwise provided by express written agreement, an employer is the sole owner of any patentable invention or trade secret developed by an employee during the course and scope of the employment that relates directly to work performed in that scope. No clause is required to produce that result, so in Nevada a written agreement is what an employee would need in order to carve anything back.
No. Labor Code 2870(a) provides that such a provision does not apply to an invention developed entirely on your own time without the employer’s equipment, supplies, facilities or trade secret information, unless the invention relates at conception or reduction to practice to the employer’s business or its actual or demonstrably anticipated research or development, or results from work you performed for the employer. Under 2870(b) a provision purporting to require assignment of an excluded invention is against public policy and unenforceable.
Yes, in writing, at the time the agreement is made. Labor Code 2872 requires an employer whose post-1980 employment agreement contains an assignment provision to provide written notification that the agreement does not apply to an invention qualifying fully under section 2870. The same section places the burden of proof on the employee claiming the benefit of those provisions in any resulting suit.
In California, yes, on request: Labor Code 432 entitles an employee or applicant who signs an instrument relating to obtaining employment to a copy of it. Nevada has no equivalent statute, so a Nevada employee who is not given a copy has no statutory route to one.
Labor Code 2810.5 requires a written notice at hiring, in the language the employer normally uses for employment communications, covering pay rates and how pay is calculated including overtime; any meal or lodging allowances claimed toward the minimum wage; the regular payday; the employer’s name including any trading names; the physical address of the main office or principal place of business and a mailing address if different; the telephone number; the workers’ compensation carrier’s name, address and telephone number; paid sick leave rights including freedom from retaliation and the right to complain; any emergency or disaster declaration for the employee’s county issued within 30 days before the first day of work that may affect health and safety; and anything further the Labor Commissioner requires. Nevada has no comparable requirement.
Not in California. Government Code 12964.5 makes it unlawful to require a release of a FEHA claim, or a non-disparagement or similar agreement that has the purpose or effect of denying the right to disclose information about unlawful acts in the workplace, and makes such agreements contrary to public policy and unenforceable. Any provision restricting disclosure of workplace conditions must state, in substantial form, that nothing in it prevents you discussing or disclosing unlawful acts in the workplace such as harassment or discrimination. Trade secrets and the sum paid under a severance agreement may still be protected.
At least five business days. Government Code 12964.5(b) requires the employer to notify the employee of the right to consult an attorney and to give at least five business days to do so, unless the employee knowingly and voluntarily elects to sign sooner. That is separate from, and can run alongside, the federal periods that apply where an employee aged 40 or over is asked to waive an age discrimination claim.
Review the Agreement Before It Is Signed
If your employment agreements were drafted for one of these states and are being used in both, the four provisions above are the places to look first.
Conclusion
Employment agreements in Nevada and California share a vocabulary and diverge on who the statute is protecting. California constrains the document: it caps what an invention clause can take, gives the employee a right to a copy, requires a notice at hire regardless of what the agreement says, and dictates both what certain provisions may not do and what they must state. Nevada sets defaults, gives the employer the inventions unless the agreement says otherwise, and otherwise leaves the page to the parties.
For a business operating in both states, the risk is not a clause that conflicts with California law. It is a clause that is silent where California requires words, which is the one kind of defect a document cannot show you.
