Since the MIT license allows anyone to do whatever they want with the project, including commercial use and creating derivatives, I'm tempted now to create a startup based on the project - basically fork it and work in private on it, extending and improving it a lot (make it worth buying it compared to OSS version), then rebrand and launch it as a subscription app.
The moonlighting policy is fairly permissive, but also somewhat vague. Both my contract and current HR guidance state that any invention is mine if done outside work hours, not using their hardware AND doesn't compete with the company and harms it's business interests - the vague part, especially with a company that has it's fingers in dozens of different software. It's not needed to inform manager or HR about moonlighting, just "use your judgement if it fits the policy". WA state.
There are several concerns I have and I'm also curious if others have dealt with a similar situation and have some advice:
1) my fear is that even if I'm following the moonlighting policies from now on, they could later still claim ownership of my work based on the pre-OSS work. If someone else outside the company would fork the OSS repo there should be no problems given the MIT license. My hope was that starting now from a fork creates a clean slate for me, since the previous work was done in part during work hours on their PCs. Open-sourcing through my employer was the only way not to lose it completely in case I switch companies (and remain abandoned, no one cares enough about it).
2) the company doesn't have a stand-alone product it sells similar to my app, but it does have a module part of a much larger product. That product is far from being the money-maker for the company (it's seen as a cost center). People are certainly not buying the whole product because of that module, it's a nice thing to have. There are several other companies that do sell stand-alone apps similar to mine though, there is a market for it. I assume that module is enough to argue that my app is a direct competitor if one really wants to though.
Given this, feels like safest would be to quit my job before even starting to work on this, but of course I'd like to avoid that, with the startup maybe not working out - concern 1 could also mean this wouldn't actually help. Switching first to another company is another option, but seems others have even worse or no moonlighting and again concern 1). Last option, work on it while employed and hope I won't get sued. Maybe quit around the time I'm close to be done with a v1 and start marketing to reduce risk a bit.
As for the company itself, I'm not seeking funding and don't see it getting to some multi-million/y business, at best enough to make a full-time job out of it. Maybe that's enough to not make it worth suing. I will consult with an attorney too, wanted to check first with other entrepreneurs in case it's completely hopeless.
