California Employment Law
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I was asked how much I make from my side consulting business from my part-time employer. I work 4 days a week as an exempt employee (32hrs) and consult during my off hours. I have had a written agreement with my employer for over 7 years always updating them when I add new clients. They are now requiring me to tell them my compensation from my clients. Legal or required? Their statement, "too much might create conflicts" Thank you. I live in Florida my Employer is in SF, CA and the home office is in Illinois. Telecomuter
Good afternoon Chris,I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today.While you have no legal obligation to provide confidential financial information to your present employer, the employer has the legal right to require that you not work on the side for yourself, or for another employer as a requirement of keeping your part time job with them.This is a fairness issue, and not a legal one, and unfortunately, the employer may unfairly ask for this information, and terminate you or otherwise discipline you if you refuse to provide it. Likewise, they may refuse to allow you to continue to work on the side as a continuing requirement of you job.Their claim that if you make too much that it will be a conflict is preposterous, unless by taking these clients on, you are actually competing with the employer---and then this is an issue of competition---not conflict of interest.It is difficult to determine how to approach this---and unless they are going to demand that you actually provide invoices and banking information from your personal business---which is so violative of your right to privacy---one might be inclined to not be entirely forthright with them.I wish you the best in 2013.I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.You may reply back to me using the Reply to Expert link if you have additional questions.Kindly take a moment to rate my service to you based on the understanding of the law I provided. Please understand that I have no control over the how the law impacts your particular situation.Thank you,Doug
I provide technical services for this employer 32 hours a week, often more, though not compensated for additional hours. My side consulting business is the same, providing technical services. The 32 hours a week is with a large private financial firm. Some of my clients are also financial. I have been up front about this and assured them in updates to the outside affiliation agreement that there is no conflict in business. I am not FINRA registered and only provide networking support. This was there direct response to my concern...
Compliance needs to get comfortable with the amount of money you make from your other clients (too much might create conflicts). I called the CCO on your behalf to confirm that you do not need to itemize exact amounts. A general statement such as “My total compensation from all outside activities is approximately $XXk. Do not reply to everyone on this e-mail. I will forward the information directly to the Chief Compliance Officer
You would suggest not over stating my outside compensation? This was my thought as well.
Thank you Doug,
This will be my response...does this sound ok?
This statement makes no sense to me, it makes me feel there is a right answer or a wrong answer.
>>Compliance needs to get comfortable with the amount of money you make from your other clients (too much might create conflicts).
I work part time and have done so since the day I started working at XXX, 32 hours a week. I have been forthright with my client information and what services I provide. I have never let my consulting business get in the way of providing XXX with the best practices I can provide. I see no conflict in the services I provide outside and what I do for XXX. I’m a technical consultant that provides networking support to a small handful of businesses outside of XXX. I have never heard from anyone that this is a conflict, in fact, David, you have told me you like the fact that I see and participate in other outside technologies and keep myself abreast of what is out there. I have not noticed in my past performance evaluations that this has been an issue or a conflict. Please help me understand how my financial information will determine there is a conflict.
many thanks. -chris
Hi Chris,That is both a professional and a fair response you have drafted---considering that they are asking for information that not even a court would order you to provide them under the circumstances.You have tactfully called them on their ridiculous suggestion, and you indeed deserve an adequate response.I wish you success.Please remember to rate my service to you when our communication is completed, so that I will be compensated for my time in providing you with the information you requested. I will be happy to continue further, and to assist you until I am able to address your concerns, to your satisfaction.I wish you the best in 2013,Doug
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