Other Employment

Bullion

Our policy states (in the employee handbook)that at no time will an employee be permitted to perform work for an employer that is in the same business or activity as us or in competition with our organization. If we deny an employee of other employment would the employee win their argument (in court), saying that we are not allowing them other sources of income?

NaeNae55

Are you talking permanently or just while they are employed by you? You should be ok if it is just while they are employed by you.

If you are talking permanently, you are most likely to lose in court. Previous court cases have found some non-compete agreements to be too unreasonable. The time frame and area must be limited. Further, non-competes must generally be a completely different agreement and not just a statement in your employee manual.

Good luck!

Nae

stilldazed

Agree with Nae. You are really referring to a noncompete agreement by policy. The more pervasive it is in its effect to limit a person's income, the more unreasonable it will be viewed and the less likely it will be found as enforceable.

There are some specifics you and your organization should consider that are not mentioned in your post:
Do you have a clearly defined business?, so you can clearly define the parameters of the noncompete.
Do you have a clearly defined geographic area for your customer base? so you can clearly define the parameters of the noncompete.
Are you in a specialized industry or provide a specialized product or service? as opposed to something general?, so you can provide clear definition to your employees.
Do you have a clearly defined target market? so you can clearly define the parameters to your employees.

The more specific you can be, the more likely your policy will be enforceable.

In an oversimplification of examples, a noncompete requirement that prevents your employees from producing a specific widget that is only available by your firm and 3 others in the state, all of which are located in the same city, would likely be enforceable if the total market still leaves more than 50% of job prospects available to your employees. However, if your organization is one of only three employers in your town, all of whom create the same product, and your town happens to occupy an entire county or major population segment of your state; plus the product is a prevailing production in neighboring states, your noncompete would essentially prevent your employee's from earning any type of living elsewhere if you happened to cut their hours and they sought extra income elsewhere. Courts might view your noncompete as unreasonable and rule that it is not enforceable.

best wishes

Rockie

Our policy prohibits accepting employment with any organization that may be a conflict of interest with our organization. Employees are simply advised to check in with their supervisors before they accept outside employment. We are very liberal with this, only excluding employment from others that are our direct competitors.