Can Employees with Exclusivity Clauses Freelance? Understanding the Boundaries and Risks

Understanding Exclusivity Clauses

If an employee has signed an exclusivity clause with the company, can they work somewhere else as a freelancer too?

As an HR professional, it's crucial to understand the implications of such clauses and how they may impact an employee's ability to take on freelance work. In most cases, an exclusivity clause restricts the employee from engaging in any work outside of their employment with the company. This means that working as a freelancer while being bound by an exclusivity agreement could potentially violate the terms of the contract.

Before engaging in any freelance work, the employee should carefully review the terms of their employment contract, specifically focusing on any clauses related to exclusivity. It's also advisable for employees to seek clarification from HR or legal professionals to ensure they are not in breach of their agreement.

Ultimately, it's essential for both employees and employers to understand the scope and implications of exclusivity clauses to avoid any potential conflicts or legal issues.

Dear Isher, please confirm the nature of the work that the employee does and provide the verbatim of the "exclusivity clause." No comments can be given unless we have knowledge of this clause.

Thanks,

Dinesh Divekar

Exclusivity Clauses and Moonlighting

Additionally, when there is an exclusivity clause, it is unethical and unfair to engage in moonlighting, even if it is as a freelancer. Obviously, you are hired for certain skills, and the organization is paying you to use those talents exclusively. To use that very talent secretly for some consideration is a dishonest practice. Your explanation will hardly bail you out if discovered by your employer, and hence it is not worth the try at all.

Exclusivity Clause and Freelance Work

The employee can work as a freelancer but not as an employee. What is the clause and its impact in a signed exclusivity agreement? It is difficult to say without seeing the entire document.

Still, you can call for an explanation citing the violation of the exclusivity clause if such engagement of the employee is hampering the work/business of the establishment.

NDA or NDC Clause Terms

NDA or NDC clause terms bar the employee from working in a similar line or nature of work, even after being released for some months. Please review the clauses carefully, as a breach of the NDC/NDA clause may lead the employee into trouble.