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Making ‘moonlighting’ safe and compliant

Moonlighting is one of the more recent topics to trend in the IT industry. Although there is no specific legal restriction against moonlighting - individual companies can, in their employment agreement, restrict employees from signing up to outside opportunities that affect full-time employment. 


Interestingly, the Factories Act 1948 and Industrial Employment Rules 1946 prohibit dual employment and many states have their own laws on the matter. However, the applicability of the two laws are limited to factory workers and do not govern other sectors of employment.


It is incredibly common for tech and IT employees, as active members of the software development community, to engage in tech-led or tech community-related activities outside their daily work. Though third-party employment is often not allowed, many organizations instituted ‘outside activities policies’ that help employees pursue their work-related passions outside of office hours or over weekends. These policies often state that employees ensure their additional projects or activities do not impact productivity or have a conflict of interest with their current organization.  


Employers, across the board, have showcased different views and approaches to moonlighting. While some companies raised the alarms and have let employees go, some other companies like Thoughtworks were among the first to implement a policy encouraging employees to engage in specific activities that are in compliance with the conditions laid down by the organization.

Encouraging creativity 


As moonlighting becomes a more prominent phenomenon, it is important for tech organizations to have a policy in place that provides clarity around the ownership of rights for intellectual property, especially in relation to client IPs. It would bode well for organizations to have policies that articulate ownership of software and other content that employees create, primarily with the aim of preventing copyright infringement and the sale or sharing of internal organizational data. On the other hand, companies could also move in a contradictory direction, where they allow employees to openly share software creations for the benefit of the broader IT industry. 


Laying down clear policies


Apart from the ‘outside activity policy’, organizations should also have guidance documents or conflict-of-interest policies. These policies set down the minimum requirements that an external activity should meet to be allowed. This gives clear guidance to all employees on what a conflict of interest is, when it is likely to arise, how to recognize and avoid it and what should be done if there is an actual, potential or apparent conflict of interest – having a conflict of interest does not necessarily represent a violation of this policy, but not disclosing it does! Additionally, this policy also applies to any situation that could potentially arise with clients, suppliers or others with whom the organization does business. 


Encouraging early disclosures


With growing instances of moonlighting organizations will need to educate their employees on what’s acceptable and what’s not. For instance, employees should be clear on not using company’s resources, including email addresses, clients' proprietary, confidential and competitively sensitive information to carry out any external activity.


Additionally, employees should be reminded, at regular intervals, to disclose if they believe any interests might lead to an actual, potential or apparent conflict of interest. A personal conflict of interest is often easy to resolve when it is disclosed early enough. Organizations should also have a clear disclosure and approval process related to IP for specific outside activities related to software projects and content creation.


An ongoing debate


Moonlighting can actually be a great way for organizations to showcase trust in their workforce and works well when employees want to explore interesting outside endeavors, additional sources of income or engage with the larger tech community. While moonlighting is still an ongoing debate with several sides making valid arguments, it could become a necessity for organizations to consider it as a way of working – especially if they want to retain talented and efficient employees while also recruiting new enterprising talent who will contribute to the growth of the company and the software development community as a whole.

Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.

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