Can you bar an employee from working for a competitor?

By Raymond Dreyfack -- Plant Engineering, 4/1/1999

With his son entering college and saddled with expensive dental work for his daughter, Instrument Repairman Grade I George Klein was strapped for funds. With this thought in mind, he found a second off-hours job with a competitor.

Things were beginning to look up when his boss, Maintenance Foreman Mike Skolnik, found out about the extra work.

"Sorry, George, I'm going to have to ask you to give it up."

"You gotta be kidding," Klein protested. "I need the extra dough."

"I have no choice. We can't have employees working for our competitors for obvious reasons."

"What obvious reasons?"

"Whether you intend to or not, you could divulge information damaging to the company about trade secrets, new designs, sales figures, job procedures."

"I would never do that."

"I know you wouldn't -- intentionally. But you have ears, right? And a mouth? In any case, a rule is a rule."

"It's a rule I knew nothing about."

"You know about it now. You have to choose between your part time job or this one."

"You know I can't quit this job."

Skolnik shrugged. "There's nothing I can do about it."

Klein refused to settle for that. He took off and returned minutes later with the shop steward in tow.

"You can't announce a rule like that without consulting the union."

When Skolnik disagreed, the steward threatened a grievance.

Question: Can management make the restriction stick?

Expert's opinion: When Skolnik told Plant Engineer Ben Grogan about the situation, Grogan picked up the telephone to get Alice Sheerer's opinion.

"Arbitrators don't always see eye to eye in situations like this," the attorney said. "I've seen cases where the company was permitted to prohibit off-hours work for a competitor, but the union had the right to challenge its reasonableness. In doing his job, would Klein be exposed to information damaging to the company, or be in a position to reveal company secrets?"

"Definitely," Grogan replied. "Especially when doing work in the lab."

"In that case," Sheerer said, "I would advise sticking to your guns and disallowing the extra work."