Ways to work around creating a startup when working a job with a restrictive contract

I am happily employed as a software developer currently and have no plans to leave.

An amazing opportunity presented itself to my dad that just screamed of a lucrative niche market with only a handful of competitors. A business contact for my dad can set him up to meet with an industry insider with valuable information that lowers the barrier of entry and can be used as the basis for building a solid product. In return we provide his organization a solution for low cost and a glowing testimonial, as well as being able to use him informally as an industry expert.

My dad needs help and wants me to help him with this idea and eventually build the software. He is thinking of starting an LLC, funding it personally and giving me 50% ownership.

I am concerned though because the contract I signed at my current job (and primary source of income) is extremely restrictive about IP that I produce. It claims pretty explicitly that any IP I create regardless of location, work hours, use of company resources, etc... is 100% owned by the company. This means that any product I would build for this startup would be owned by my current employer.

I was thinking, perhaps I can work around this by not actually being affiliated with this startup in anyway? Have an agreement with my dad, behind closed doors, develop the product secretly at his house, he owns 100% on paper and then if its successful and makes money he can cut me a check. Financially on paper it is a father writing his son a check from his personal bank account.

I of course trust my dad on this, I am his own flesh and blood, he wouldn't screw me over.

Besides the obviously ethical implications of this, is there really any chance of getting in serious trouble? Is it illegal in anyway?

EDIT: I would like to add that this startup will in no way shape or form be in any market or position to compete in anyway directly or indirectly with my current employer.

You might want to check with an attorney and have him review the IP agreement you signed. These things are determined under state law, so it depends where you live. I have some doubt that such an agreement could cover unrelated IP topics, especially for a programmer working for the company, but you should check that with the attorney. Even if your employer has no rights - they could decide to fire you if you proceed. I don't understand your point about not working for your father's company, I don't think that matters. Of course your father can't copyright your work if you won't stand up for it. What's your long-term intent? If this works out, are you still going to stay with your old job? First get the legal facts, then you still have some serious decisions to make. As a last resort, you could always ask your employer to let you work with your father and waive any resulting IP. They may do it when you tell them what you will be doing. Just get it in writing.

Disclosure: I'm not a lawyer but I have gotten advice on this in California and here it's illegal. You need to check with a local attorney to see what it means in your state.

Anything you produce on your own time, that does not violate your employment agreement, is yours.

If you signed that contract in the California, it's unenforceable.

As long as you don't infringe on your present employers IP and don't violate your employment agreement, you can do pretty much whatever you want on your own time -- they own none of it.

An employer does has an expectation that you will be Ready, Willing and Able to perform your duties. If you have several jobs, fatigue may prevent that from happening.

Personally, I find this practice appalling and shocked that it's not illegal. Be careful and please consult an attorney if you feel you may be in violation of your employment agreement.

EDIT: I refined the answer above based on the insightful discussion (see below). Dom brought up some excellent points and made this thread valuable.