Many employees take on outside projects, freelance work, or creative ventures during their personal time. While these activities may seem unrelated to their primary employment, they can create problems when they overlap with company resources, schedules, or intellectual property. A commercial litigation lawyer often sees disputes arise when employees unintentionally blur the line between personal work and employer obligations, creating liability issues the company did not expect.
When Company Equipment Is Used For Personal Work
One of the most common risks appears when employees use work computers, software, tools, or materials for side projects. Even if the use seems harmless, it can violate workplace policies or licensing agreements. For example, using a company design program or proprietary database for freelance work may expose the employer to contract violations, data misuse claims, or security breaches. These issues become more serious when personal projects involve clients, financial transactions, or sensitive materials.
How Conflicts Of Interest Can Develop Quietly
Side projects do not always appear to conflict with an employee’s duties at first. However, a conflict can emerge if the employee begins taking on clients or tasks that compete with the employer, even unintentionally. For example, an employee may offer similar services on the side or work with a client the company recently declined. These situations can create liability when the employer’s business interests are affected or when customers become confused about who represents the company.
When Intellectual Property Becomes A Major Concern
Intellectual property issues often arise when employees develop products, content, or software during their free time. If the project was created using company knowledge, data, or equipment, ownership disputes may follow. Employers may claim partial or full rights to the work, especially if it relates to the employee’s job duties. Without clear documentation or agreements, both parties can face financial disputes, court involvement, or contractual challenges.
How Workplace Time And Productivity Are Affected
Even when employees intend to keep their projects separate, side ventures can distract from their responsibilities. Missed deadlines, reduced focus, or divided attention can lead to errors. In workplaces where accuracy, safety, or client interaction is essential, these mistakes may expose the company to liability. If a customer suffers financial loss or inconvenience, the employer may be held responsible even though the issue originated with an employee’s distraction.
When Confidential Information Is Put At Risk
Side projects involving similar industries or skill sets increase the chance of accidental information sharing. Employees may use workplace examples, templates, or internal methods without realizing they contain proprietary or confidential material. If this information reaches outside clients or public platforms, the employer may face claims involving data protection or breach of confidentiality. These cases can escalate quickly, especially in regulated industries.
Why Clear Workplace Policies Are Necessary
Employers often mitigate risks through written policies addressing freelance work, outside employment, and intellectual property ownership. When these policies are vague or outdated, misunderstandings occur. Employees may assume certain uses of company resources are acceptable when they are not. Conflicts also arise when side work becomes profitable, prompting questions about whether it interferes with job duties or violates internal agreements.
How These Risks Influence Legal Outcomes
When a dispute arises, investigators review contracts, communication records, policy documents, and timelines to determine whether the employee’s personal work created a liability issue. Courts may consider whether the employer took reasonable steps to define expectations and whether the employee acted outside those boundaries. Attorneys like those at Kravets Law Group can attest that many of these disputes develop gradually, only becoming visible after financial loss or customer confusion has already occurred.