Outside employment and conflicts

Employers restrict outside activity to protect against conflicts, competition and diverted attention, within limits.

What is defensible. A policy requiring disclosure and approval of outside employment, board service and business interests; prohibition of work for competitors, customers and suppliers; prohibition of use of company time, resources and information; and prohibition of activity interfering with performance.

Limits. Several states protect lawful off-duty conduct, and a blanket prohibition on any outside employment is unenforceable in those jurisdictions. Restrictions must be tied to a legitimate business interest.

Labour law. Policies restricting discussion of the outside activity, or prohibiting activity protected as concerted, are separately problematic.

Approval process. A written request describing the activity, the time commitment, and any relationship to the employer’s business, with a documented decision. Consistency matters, since selective enforcement is evidence in a later claim.

Conflicts of interest disclosure covering family members’ interests and relationships with counterparties.

Intellectual property. Outside activity creates ownership disputes; the approval should record whether anything created belongs to the employer.

Practical judgment. Blanket prohibitions are ignored. A disclosure-based policy with a clear conflicts standard is followed and is enforceable.