Conflict of Interest

Hey everyone. So being a recent graduate, I’m on the hunt for my first job in the graphic design field(Granted, might not be the best time to be job hunting, due to how this year has been…), but I’m also looking to possibly do freelance. I understand it’s somewhat commonplace for businesses to have a Conflict of Interest clause, that restricts you from doing freelance work for certain clients that may cause a conflict of interest with the company you work for. My question is, is it possible, normal, or uncommon for some businesses to have a CoI clause that keeps you from doing any freelance work? I understand some businesses might see you doing freelance work as you taking potential clients from them, so I’m looking to get a bit more info, so I know what I might be getting into.

Thank you very much for any help.

Hi, Scou624, and welcome to the forum.

I’m not an attorney, so take what I have to say with a grain of salt. It’s just my personal experiences.

In the United States, a non-compete contract with an employer is a state-by-state issue. Some states allow them, while others don’t. Even in those that allow them, they’re sometimes difficult to enforce in situations where the enforcement would seriously impede a former employee from earning a living.

In an after-hours moonlighting situation, again, there’s state-by-state ambiguity in whether or not an employer has any right to tell employees what they can and can’t do when they’re not at work. Even in states that allow a company to make signing a contract limiting moonlighting a condition of employment, it’s difficult to enforce since a determination of what and what isn’t allowed on a case-by-case basis would be difficult.

I don’t know of any statistics (haven’t checked), but I suspect more companies have policies regarding conflicts of interest rather than legally binding contracts that people are forced to sign in exchange for employment. A policy isn’t necessarily legally enforceable, but it gives the employer some ability to point to a policy being violated when filling out performance reviews or making work assignments. No matter the situation, it’s just not a good idea for an employee to violate company policies since an employer has the upper hand in determining just how that employee is treated.

I’ve worked for two places with conflict of interest policies. I ended up selling a side business in one of those situations when that business started looking like it could be a conflict of interest. My employer at the time, couldn’t tell me what to do, but the suggestion to sell it was unmistakable.

In general, it’s just not a good idea to have a conflict of interest with one’s employer. If you’re moonlighting for a competitor or undercutting your employer’s business in some way, your employer probably isn’t going to be too happy about it. It’s typically best not to have your employer upset with you.

I think there’s also an ethical responsibility for the employee to be somewhat loyal to an employer. It cuts both ways, though — if an employee is freelancing after hours in a way that poses no conflict of interest, I don’t think the employer has any ethical business limiting that employee’s after-work activities.

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I appreciate the insight on this. That’s kinda what I was thinking, in regards to the last paragraph. I know conflict of interest clauses aren’t that uncommon, as the grocery store I worked at had one, where if you worked at the store, you couldn’t work at another grocery store as a second job. Again, thanks for the insight, was just curious as to how it works

I suspect you’re referring to a company policy rather than a clause in a contract. It would be unusual for a store to require an hourly employee to sign a contract as a condition of employment. I’m not saying this would never happen — just that it’s uncommon.

Most hourly employees are “at will” employees, which provides lots of leeway for employers to terminate employees for violating company policies. A signed contract ties the hands of the employer to whatever is written into the employment contract.

A whole lot of this depends on state laws. Employment laws vary significantly between states. Some states let employers terminate at will employees for almost any reason. Other states place lots of restrictions on what an employer can and can’t do.

From the standpoint of graphic design, in my opinion. it would be beneficial to the employer to allow an employee to freelance as long as they weren’t in some way harming the company, like working for a competitor, stealing clients or doing freelance on company time. The reason I say it would be beneficial is because freelancing would give an employee more experience in dealing with clients, taking on different kinds of work and developing additional skills. Those extra skills and experiences would translate into a more skilled employee.

Our company moonlighting policy is “it cannot affect your on-the-job performance.”
Plus, you can’t take sick time to do it.
Vacay time yes, but not sick time (they’re split in this state, have to fill out a form for sick time now.)

I wouldn’t be able to give a definitive answer on that, as it was a few years back that I started. And sadly being realistic, how many 18 year olds actually read what they’re signing when being hired at a grocery store? Lol

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