How much can an employer limit employees' outside business activities?

September 21, 2007 6:35 PM

How much can an employer limit employees' outside business activities?

My employer has instituted a policy whereby almost any outside business activity must first be approved by the company president. Even after approval, the president wants to "review" any work product to determine after-the-fact whether work "violates" his understanding of the approval conditions.

Our business covers a wide range of consulting--finance, economics, even web-based applications. Some employees do volunteer work involving the same activities. Other employees do for-profit work on projects that are too small for the company to take on. Still other employees do have extracurricular interests that are politically at-odds with the owners' politics. The policy seems like a convenient way to find "cause" for firing someone.

I know you're not a lawyer. Regardless, any thoughts on how other small consulting firms treat (or should treat) extracurricular activities would be appreciated.

posted by anonymous to Work & Money (15 answers total)

Are you contract or at will? If you're at will, well, suck it up or be sacked. Otherwise, review your contract.
posted by klangklangston at 6:46 PM on September 21, 2007

It would also help to know whether or not you signed a contract or agreement which included a noncompete clause.
posted by Dr. Zira at 6:55 PM on September 21, 2007

Not directly answering your question, and this will vary depending on where you live, but:

My employer has instituted a policy...

An employment contract ain't unilateral - both sides should agree to the terms. If employees do not agree to the imposed changes, they should look into challenging them (perhaps making it clear that they are working "under protest" in the short term).

However, the strength of your position when challenging will be strongly dependent on the circumstances of your case. Anecdotal/case evidence presented in this thread may be of limited value, you should really seek competent advice in your state (assuming you're in the US).
posted by wilko at 6:59 PM on September 21, 2007

It is legal for an employer to have a policy on what other for-profit jobs you do, or what other industries you do work in while you are employed with them. My current job has a policy that I cannot be employed anywhere else and a prior company had a policy that I couldn't have a second job in the same industry.

Honestly, it seems to me like it would be legal just from past experience with these large companies.
posted by hazyspring at 7:51 PM on September 21, 2007

As always, it's different in California.
posted by ClaudiaCenter at 8:27 PM on September 21, 2007

If you have signed a no-compete agreement, then you cannot work in the same industry for a competitor -- or, if it's strict enough, perhaps you can't even do similar work in any field, so you need to check the language. If you'd be working for someone who's not a competitor and the agreement allows for this, fine, but you're ethically (and likely legally) obligated to disclose this relationship to your employer so everything's above board. This means giving them the right to approve your outside work, as I understand it.

If you haven't signed a no-compete clause, then all bets are off -- on both sides. You don't owe them anything, and neither do they you. You can work for whomever you want, and they can fire you for wearing insufficiently pleated pants.
posted by middleclasstool at 9:10 PM on September 21, 2007

I didn't sign the last non-compete I was presented with. The company didn't seem to care, which surprised me at first. I was taking it way more seriously than they were.
posted by TeatimeGrommit at 9:15 PM on September 21, 2007

IANAL, and it would depend on your location, industry, contract (if one exists), etc. But I can say that it sounds like you're working for a control freak that isn't happy with controlling you at work - he wants to control your free time, too.

With people working as consultants, small outside income sources are often the only way to make any headway financially. His actions could really affect your income potential.
posted by letitrain at 10:49 PM on September 21, 2007

I'm sure others will correct me if I'm wrong, but this part sounds fishy:
"
My employer has instituted a policy whereby almost any outside business activity must first be approved by the company president. Even after approval, the president wants to "review" any work product to determine after-the-fact whether work "violates" his understanding of the approval conditions."

Why is the company president reviewing these things? and after approval, why is reviewing things? Sounds like a control freak jackass.
posted by Brandon Blatcher at 3:52 AM on September 22, 2007

It may not matter whether you sign something or not. If your employer has policies, then those are the policies, whether you sign them or not. The only thing that changes this is if these policies are illegal. Otherwise, they can fire you for violating these policies, and pretty much for any other reason. Employee at will, which is what most people are unless you have a union.

Now, IANAL, but I can't see how it is illegal to has ask employees to tell him any outside employment they have. It may be crazy and unethical, but illegal?
posted by hazyspring at 7:03 AM on September 22, 2007

Because of a presumed power imbalance between employer and employee, most states have laws about what an employer can and cannot do. So yes, depending on the locale, it may well be illegal to demand to know what productive activity an employee has outside of work (or legal but only if there is an explicit contract)
posted by TeatimeGrommit at 9:01 AM on September 22, 2007

I'm an employment lawyer. You need to ask one in your jurisdiction if you are doing some outside work.
posted by Ironmouth at 9:43 AM on September 22, 2007 [1 favorite]

I think a lot of this depends if you're working in an "at will" state.

Hate to hijack this question... but does anyone care to explain why "at will" might benefit the employee? Every case I seen has benefited the employer.
posted by IndigoSkye at 10:57 AM on September 23, 2007

You can quit without getting sued, no notice, no need to give a reason.
posted by middleclasstool at 11:52 AM on September 23, 2007

This kind of policy isn't so unusual in some fields. For example, many newspaper reporters live under similar restrictions: no working for competitors, no working in any industry they might have to cover one day, no volunteering for any organization they may have to cover one day, no political involvement beyond voting.
posted by croutonsupafreak at 6:27 PM on September 23, 2007