How Employers Can Respond to 'Two-Timing' Workers

​Imagine this: One of your employees, now working from home, has established three side businesses that do the same type of work your company does and serve the same types of customers. The employee is running the businesses during the hours you're paying him to work for you. He is using your databases to access information to help him sell his services online. Worse, the employee actually contracted with some of your other employees to help him run these businesses.

Seem far-fetched? That's exactly the situation Richard Warren is currently handling for one of his clients. Warren is an employment and labor attorney and principal with Miller Canfield in Detroit. It's a situation that has become more commonplace during the pandemic as employees are working from home, outside the watchful eyes of managers and colleagues. And although only a small percentage of employees may be engaging in it, this practice can cost companies when it comes to the bottom line and potentially losing confidential information and customers.

Two-Timers in Your Midst?

The Wall Street Journal recently covered the issue, with Rachel Feintzeig writing, "A small, dedicated group of white-collar workers, in industries from tech to banking to insurance, say they have found a way to double their pay: Work two full-time remote jobs, don't tell anyone and, for the most part, don't do too much work, either." She told of a software engineer who says he was working just three to 10 hours a week, emboldened, she said, by the website Overemployed, which "aims to rally workers around the concept of stealthily holding multiple jobs."

"The trend of two-timing is old news to anyone who has worked freelance or in the gig economy," said Rolf Bax, CHRO at Resume.io. But, he said, "in the noncontingent labor market, it is undoubtedly a new phenomenon due to remote work and the lack of oversight." Employers "are, for the most part, completely oblivious," he added.

Joe Flanagan is senior employment advisor at VelvetJobs. The COVID-19 pandemic and remote working have allowed more employees to take on additional work—or jobs—he said. Work-from-home (WFH) jobs exploded in popularity, beginning in 2020.

The Risks

While Warren said he sees situations where employees are working for more than one employer in only about 2 percent to 3 percent of cases, the virtual work environment makes the potential for this to happen increasingly likely. It's certainly an eventuality that organizations should consider and take steps to stem before it becomes a bigger issue.

The risks from two-timing employees in WFH environments are similar to risks that companies have long faced from moonlighting employees.

Two-timing presents legal and ethical implications for companies, Bax said. It raises the potential that "unknown and unauthorized third parties are essentially accessing and handling company and client data."

There are risks to employees as well, he said. "If someone decides to double dip in this way, and they don't do enough due diligence on the person they have hired to help them with the workload at company A so they can attend to responsibilities at company B, they might find they are turning in work that damages their reputation."

Protecting Your Company

Companies can protect themselves from the risks of employee two-timing or moonlighting through policies and, in some cases, contracts. Exactly what employers do, and how, will depend on their philosophies about employees working with other organizations.

Companies can "decide whether to prohibit it altogether or to not prohibit it," Warren said.

When creating or revising policies to address workers taking on additional jobs, it's important to seek the advice of legal counsel, as laws can vary by state.

"There are two sorts of policies that you can use to address moonlighting and second jobs," he said: a policy directly addressing moonlighting or a conflict-of-interest policy.

Companies should have a policy on intellectual property—who that property belongs to, who has the rights to access it and what they can do with that information. They also need to take steps to protect their data, Warren said. An important way to do that is to limit access to data based on role and need. One of the biggest mistakes organizations make, he said, is providing everyone with the same level of access to financial or customer data.

In addition, he said, companies may want to have noncompete, nondisclosure or nonsolicitation policies. While these types of policies usually only apply to activities after a worker has left an employer, companies concerned about the potential for two-timing might want to have agreements that apply to activities workers might consider while employed with the company.

The goal here is to protect the interests of the company. Not all side work employees may take on has the potential to damage the company. Being too restrictive in policies can be as problematic as not having policies at all, as courts have often sided with the interests of employees and their need to maintain gainful employment.

Consistency in Policy Administration

Having policies in place is just half the battle, according to Warren. "I very rarely see lawsuits triggered by the imposition of a new policy," he said. "Invariably, I can track almost every lawsuit I've ever defended back to inconsistent treatment or inconsistent application of company rules or company policies."

This means if you have a policy that prohibits taking on a second job and you discipline "Pat," a customer service rep, for not following the policy but continue to allow your top salesperson, "Chris," to operate a side gig as a sales training consultant, Pat could have a legitimate claim against you. Make sure that whatever policies you adopt are enforced consistently, without exception.

Warren also stresses the importance of consistent documentation. In many cases, he said, current HR directors were not present when a policy was created or when it was applied in the past. Having documentation to cover these details ensures that policies are followed consistently over time, even as HR leadership changes.

There are practical actions, beyond policies, that employers can do to discourage employees from two-timing, said Jacob Villa, co-founder and marketing director of School Authority, a site that matches students with their ideal colleges in the United States: "The best we can do for now is to reduce the factors that encourage this practice," he said. "That means being better bosses, giving better pay and benefits, and allowing for greater opportunities to grow professionally within the company."  

Lin Grensing-Pophal is a freelance writer in Chippewa Falls, Wis.