Can my new employer force me to give up my freelance work?
September 6, 2019 11:45 PM   Subscribe

I have been told a job offer will be coming my way. But also, that I will have to stop taking freelance work on the side... what to do?

I've been unemployed for a while now. But, earlier today, I was told (via phone) that I would be receiving a written job offer. Which is great! But, during the course of the interview process, I mentioned that I've been doing some freelance work while unemployed, (mostly, to make it seem like I wasn't completely slacking off) ... And then they told me I will have to resign that freelance work once I start with the company.

How common is this? I was extremely surprised. In my industry, freelancing is pretty common. This new job would be with a tech startup, which is something I've done before, but it is a research-focused company, which is not. It was until very recently, associated with a university. I was told, by the founder, that this type of thing is very common in academia. Is it?

How do I explain this to my current clients? What if this job doesn't work out, and in three months I have to go begging my old clients to please, let me work for them again? How do I explain that?

What counts as work? I signed up to give a workshop next month at a nonprofit, teaching people how to set up simple webpages. The nonprofit will pay me a small stipend. But, will I have to quit this, too? Can I just get away with it, as a one-off thing?

I considered just trying to continue freelancing without telling them.. but honestly, I don't really even like the freelance work. It's kind of boring, and the clients are... slightly difficult to deal with. Plus, the income is pretty small, really, it won't be a hardship for me without it. Similarly, the workshop stipend isn't a lot, mostly I was doing it to help out a friend and possibly do some networking. But still, I kind of resent being put in this position.

Before this, I was totally prepared to do the freelance work on the side. But my soon-to-be employer says that he needs "100%". I'm pretty excited about this job, and I'm eager to show that I will be a good employee. So my inclination is to fall in line and do exactly what they ask. But it still seems wrong to me.

So, what should I do? I know a lot of this depends on the contract (which I have not yet read).
But, I have to imagine someone else has been in this position before, and can offer some advice.

posted by anonymous to Work & Money (18 answers total) 1 user marked this as a favorite
This is very common in academia. My university has specific rules about freelancing ("consulting") in the faculty handbook. Essentially, the university owns the intellectual property of anything done on university time. When I was job-searching, I met with an employment lawyer and was told to tell my potential employer about any "outside" work. They don't want to pay you for time spent working for someone else.

Now, university time often means 60-80 hours a week, since so much academic work, from grading to grants, is assumed to be done evenings and weekends. If this is not industry-standard in your field, and if you expect to be fully off when you're not physically at work, I would push back on this. They may have ported over some academic policies without considering the private sector standard. The workshop, especially, is a commitment you've already made. They might make you give up the stipend or take a vacation day, but hopefully they'll agree that you should honor existing commitments and make an exit plan from your other current clients.
posted by basalganglia at 12:09 AM on September 7, 2019

This is very common in academia. My university has specific rules about freelancing ("consulting") in the faculty handbook. Essentially, the university owns the intellectual property of anything done on university time.

I don’t think this is a common arrangement. More typically, there will be some limit on the time allowed for consulting (one day per week seems usual) and any intellectual property created during the consulting work belongs to the company paying for the consultant. With the caveat, of course, that all conflict of interest policies are strictly abided by. So, for instance, you can’t use university resources in your consulting job.

Particularly in the CS context, I think you’re having smoke blow up your ass regarding the “typical for academia” argument.
posted by mr_roboto at 1:08 AM on September 7, 2019 [7 favorites]

I'm in academia and while I'm allowed and in fact expected to do consultancy work, the normal expectation is that my university keeps most of my fee. In some cases a portion (usually between 10-60%, depending on the situation) gets set aside in a research account for me to use for research expenses or attending conferences. In some unusual situations I can take a portion of the fee as extra salary, but it is still initially paid to the university, the university takes a cut and I can then argue to get the remainder paid as a salary bonus in my next paycheck.

The default is though that the freelancing is on behalf of the university and the university has first dibs on the money earned.

I could freelance in weekends, but I still have to declare this to the university, can maximally do one day a week, and can only handle the income completely separately from the university if the work has nothing to do with my research or teaching topics.
posted by lollusc at 1:15 AM on September 7, 2019 [1 favorite]

Where are you located? Location will impact both whether this stipulation is normal in that area and whether it’s enforceable.

This kind of clause is pretty typical in employment contracts in my location (Australia) and field (tech, non-research).

If I were you, I would ask the employer about keeping the nonprofit commitment, and let your other clients know you won’t be available after your start date. They will understand — it’s part of the deal when you work with freelancers. We had someone join my company recently who asked for an extra two week delay in their start date so they could wrap up freelance work; it reflected well on them that they would honour commitments. Had we needed an immediate start, we would have offered them the option of continuing the freelance work for a limited time while it wrapped up.
posted by third word on a random page at 1:30 AM on September 7, 2019 [1 favorite]

It isn't unusual in academia and it is standard in industry. This is a 100% normal part of your contract.

You tell your clients you've taken a fulltime job and are no longer able to freelance. You're not an employee; you don't actually work for them, and this is part of their risk in having a job done by a freelancer and not an employee.
posted by DarlingBri at 1:45 AM on September 7, 2019 [9 favorites]

My job (us, non academic) does limit outside employment as well. I'm not super sure how legal it is (but it's been in place a long time so I'm assuming it is above board) it doesn't prohibit outside employment but does cap total working hours, and does place all outside employment for review by supervisor, which can be denied for reasons though the nuances more have to do with using the current position for things that could been seen as kickbacks or other fraudulent behavior.
posted by AlexiaSky at 3:19 AM on September 7, 2019

I would try and negotiate this.

Tell them how much it will cost them for you to give up your outside work. At the very least tell them you intend to honor your commitments and wrap up cleanly. If they don't respect these points it would be a huge warning sign for me.
posted by srboisvert at 4:54 AM on September 7, 2019 [5 favorites]

Negotiate. They can say no, but I'd argue this is a startup and you need to keep your freelance network warm in the event that things go under. Be willing to negotiate on max hours and possibly even resign from freelance if they hit certain growth and profitability targets.

Anyone with a certain clause in a contract should be able to explain what the intent is beyond "that's how my industry does it." There should be a specific risk they intend to address. Discussing that normally leads to mutually beneficial language.

Unreasonability and unwillingness to redline around contracts is a big red flag.
posted by bfranklin at 5:02 AM on September 7, 2019 [4 favorites]

IANYL, and this is not legal advice. This is pretty standard, but may or not be market in your field or location. Your employer wants you to be available for your job, particularly at a startup. Doubly so in a IP-creating startup; I expect any IP you create is owned by your employer. If you are doing work on the side, it creates potential litigation exposure. Talk to an employment lawyer in your jurisdiction.
posted by Admiral Haddock at 5:41 AM on September 7, 2019 [1 favorite]

Not sure what you do for a living. I am an Architect. If I do side work, and I make a mistake, my employer could be held liable. So, no side work.
Famously, FL Wright got fired by Louis Sullivan for doing side work.
posted by rudd135 at 6:38 AM on September 7, 2019 [1 favorite]

Former academics often have unrealistic expectations in their new private realm. This can be good ("Here's a ton of vacation!") or bad ("You're really just an over-paid grad student, and we will treat you as such.").

The typical notation that I've had in (programming) employment was: you can work on anything outside of the company's realm (where the realm is, say, sports entertainment, or medical devices, not, like, anything you put into a computer), and we don't really care. Anything you work on inside the company's realm is ours.

Regardless of the terms, I would make sure it is spelled out clearly in the terms of employment, and could be a point of negotiation. If the terms are unclear, I would get a lawyer to take a look at it and suggest amendments. (Bad contracts are also an academic hallmark...) Perhaps, if the new company is inflexible and you feel it's worth it, you could negotiate a limited time winding-down period for your outside work. Just, make sure you get it in writing and under signature, reviewed by your own, appropriate lawyer.
posted by cowcowgrasstree at 7:34 AM on September 7, 2019 [1 favorite]

Academia is all over the place; this is neither absolutely standard nor mind-bogglingly uncommon. But exceptions can often be made with justification. In your shoes I’d ask for a limited-time window to wind down your existing commitments (3 months, maybe, or you could try for 6). Definitely get it in writing,

As someone who would sometimes approve this kind of exception in my professional life, you’d set yourself up well for success if you could articulate a clear justification for why your freelance and startup work won’t create issues with commitment or IP. For example: can you truthfully say that your freelance work is in a different field of use, or using different tech, or for a different kind of client? Can you affirm that the work will take no more than X hours a week and can be done on your own schedule, outside of startup work and not using startup time or resources? The more clearly you can document that there’s little chance for your two work lives to overlap, the better your case will likely be.
posted by Stacey at 8:43 AM on September 7, 2019 [1 favorite]

It also might depend what kind of freelance work you're doing. They might not care about you giving a workshop, but they might not want you consulting for companies that are their direct competitors. So the type of freelancing might make a difference here.
posted by gideonfrog at 9:04 AM on September 7, 2019 [1 favorite]

Most of my full-time jobs have had a requirement that I have no other employment, but they often have a process for getting specific exceptions to this. The main reasons for this have been avoiding IP rights issues or conflicts of interest.

For example, a few years back I did a few hours of consulting for a friend’s startup. My full-time employer required review to ensure that the startup was not a supplier, customer, or competitor of the company, and that I would make sure not to use any common equipment or share any IP in either direction. This case was easy because it was completely unrelated to the day job, but could have easily become quite involved.

It might be possible to work with your new employer to get similar exceptions made, but if the new job is with a startup they may not have a process yet. It also might not be worth it if you don’t like the work or the clients.
posted by a device for making your enemy change his mind at 11:14 AM on September 7, 2019 [2 favorites]

For the correct answer you should consult an employment lawyer in your state as I understand there is variation between locales in how secondary employment or freelancing is treated. I can confirm that clauses like this are common in tech industry employment contracts. Whether they are enforceable is another matter (again, consult a lawyer).

As I understand it for my state (California) the key concept is that you have a "duty of loyalty" to your primary employer. You can breach your duty of loyalty if your secondary employment interferes with performing your primary work duties (for example, you're unavailable when needed for Primary Job because you were busy with Secondary Job). You can also breach your duty of loyalty by performing outside work that brings you into a conflict of interest—for example, consulting for a competitor, partner, or customer of your primary employer.

Tech companies in particular can be sensitive about any ambiguity around intellectual property ownership and will potentially try to lay claim to any IP you develop while working for them, even if it is not related to their primary line of business. Whether that claim is enforceable depends again on the nature and circumstances of the work.
How do I explain this to my current clients?
By telling them that you are returning to full-time employment and will not be able to continue freelancing.
What counts as work?
Work for pay obviously counts, but activities like pro bono consulting or serving as an officer or director of another organization may also count. Your upcoming volunteer workshop probably does not count (nights/weekends, not a regular obligation, not your employer's line of business) even with the stipend, but if you are concerned about it ask for guidance.
But my soon-to-be employer says that he needs "100%".
Welcome to tech startup life :)
posted by 4rtemis at 12:08 PM on September 7, 2019 [3 favorites]

I think it is inappropriate of them to ask you to reneg on existing commitments. That would be a red flag to me.

While it's common to be asked to sign a noncompete clause, there is usually room for negotiation. I've done this twice, in one case adding a clause allowing me to do freelance work for small businesses, who weren't actually direct competitors anyway, and in one case allowing me to work outside a particular geographical locale.

Since your new employer is a start-up, though, I suspect that competition isn't their only concern. I bet they want to be able to suck unlimited hours out of you, hence their desire that you not be allowed to do anything else in your free time (you likely won't have free time). If you're going to be working 80-hour weeks, you should be getting an interest in the company if they're successful, not just a straight salary. They say they want a commitment from you, but have they offered a similar commitment? Guaranteed employment for x years? Profit sharing?

I understand that you are happy to be offered employment after being unemployed for a while, but try to make sure it's a good deal for you too.
posted by nirblegee at 3:13 PM on September 7, 2019 [1 favorite]

I worked for a tech company (not a startup) that had this rule, up to and including prohibiting folks from driving for Lyft or Uber on the weekends. Many people ignored it. As long as you're not doing freelance work on company time, I can't imagine this could be enforceable.
posted by coppermoss at 5:25 PM on September 7, 2019

Is the job salaried or hourly? I'd expect a salaried employee to be 100% committed to their job.

What is subject matter of the company and your freelancing work? Conflicts of interest can be a headache to corporate. There's also information security; the more you interact/ talk shop with outside interests the more chances that you may inadvertently release private company information/ IP.

There's also the murky world of IP - if you developed something while freelancing, how much of the information/ resources you had access to while at work facilitated this new IP while freelancing?

NDA and non-compete clauses are also extremely common; prohibiting freelancing is a path of least resistance to attempt to deter (even accidental) competition.

I'm not saying that any of this is right or just, though, that's how many companies-as-persons think.

You could probably ask for an exemption for the workshop and be allowed to donate the honorarium to something. It's not freelancing, that's volunteering.
posted by porpoise at 9:52 PM on September 7, 2019

« Older Get Your Groove On   |   My wife wants joint ownership of the house I... Newer »

You are not logged in, either login or create an account to post comments