Expert’s Advice

Question:

My boss could not have felt more differently about an employee of his running a side business. After discovering I am running a side business/hustle, I got an email from my HR to halt my side business or I will be sued for breach of the agreement signed with the company. The clause is as shown below:

“Covenant Not to Compete.  You agree that at no time during the term of your employment with the Company will you engage in any business activity which is competitive with the Company nor work for any company which competes with the Company.”

But I only run my side business after close of business and weekends, I don’t think it competes with my work in any way as we don’t sell same/similar product or service. What can I do?

Hello Fred,

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Thank you for your question.

It has become increasingly common for employees to seek ways to supplement their income by engaging in a side hustle/business. While this is not necessary a bad thing nor is there law outrightly preventing you from engaging in one, You must be careful to ensure there are no contractual provisions in your terms of engagement that would prevent you from engaging in one or limit how you can do so.

The most common example of such is a non-compete agreement/clause also referred to as “covenant not to compete” or a “contract in restraint of trade” wherein an employee consents not to engage in a similar occupation or disseminate trade secrets that is likely to occasion damage or compete against the business of his employer.

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I will suggest you first get a lawyer to review your terms of engagement which includes your offer letter, employee handbook and any other policies governing your employment relationship. This review should evaluate if there is any contractual breach. If there is none, I suggest you have a conversation with the HR department, preferably with your line manager in attendance explaining the nature of your side business in detail, seek to understand what the main concerns are and finally explore ways to arrive at a mutually beneficial resolution.

Generally, I usually advice though, that employees should pre-inform the HR department of their side hustle and business especially once you see that the business is growing, and you start getting significant traction. This is to let them know about it formally while also clarifying and assuring them that there is no contractual breach or impact on you delivering superior performance at work. In cases where there are underlying issues with the management or HR team that may cause this to seem impractical, ask a senior management staff you trust to advice on what to do.

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I hope this helps you.

I wish you all the best, Cheers to your success.

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