Throughout the years, we have had many conversations with our members about allowing employees to do “side work,” or freelancing in addition to their full-time jobs at the agency. Truthfully, we don't always have a simple yes or no answer to this question. Not to mention, the past two years and rapid growth of the gig economy have complicated the situation even more. Let's take some time and try to analyze the employee freelance situation.
Employee Aspirations – Hard work, and sometimes taking a second job to earn more so that one can enjoy a better life, is an integral part of the American psyche. It is all tied up in the Horatio Alger, rags to riches stories that many find irresistible. The truth is, many aspire, but few actually have the stamina to “bootstrap” themselves up through pure effort. Regardless, everyone thinks the right to be judged on what you do, rather than who you are, is inherently a part of why America was founded in the first place. With such a historical precedent, it’s hard to put a damper on individual effort.
The Employer’s Side – Nevertheless, we believe that freelancing outside of the agency environment is eventually franchise-eroding to the agency. So if we were forced to give you a one-word answer, it would be, NO! Numerous problems have the potential to arise: lateness; absenteeism; agency time spent communicating with freelance clients; use of agency equipment, vendors, and other personnel; using company postage, supplies, and… you name it. In fairness, there are some who would never allow freelancing to intrude upon their day job, but for every one that respects the boundaries, there are three who won't. This doesn't even touch on the potential problems that could arise from competitive, artwork ownership and financial issues that might involve your agency as employer of record for the freelancer.
The Crux of the Criticism – Let’s analyze the core problem: Why do your people want to freelance? Are they unhappy with the kinds of work they do in-agency? Do they wish for more challenging projects? Are they augmenting low salaries with freelance work? Are they worried about advancement, and using freelance work as a way to “keep the door open” with outside business contacts who might hire or refer them for a future position? Whatever the reason, you need to formulate an employee policy regarding freelancing. More importantly, you need to formulate the policy so that it makes sense for your employees not to freelance. A sample freelancing policy might look something like this:
Outside Employment/Freelancing
Your time away from the office is your own; however, we ask that employees follow agency guidelines for doing outside work. Employees may accept work in addition to their work with the agency only if:
- Such work was disclosed at the time of employment by the agency, and was determined to be allowable by management;
- Such employment does not constitute a conflict of interest with the employee’s duties;
- Such employment is not in direct competition with the agency; Such employment does not interfere with the employee’s job with the agency;
- Such employment is not during the employee’s regular working hours; and
- Such employment does not occur while the employee is on sick leave.
Employees shall notify the appropriate management personnel in writing of any outside employment opportunity so a decision can be made as to possible conflicts of interest. The notice and decision will be placed in the employee’s personnel file. If you wish to freelance or take on a second job:
- Please notify your supervisor of your activity. If the activity adversely affects your work for the agency, you will be asked to refrain from it.
- Provide and use your own materials and supplies. If the freelance work is for a charitable or non-profit organization, the agency may be willing to allow reasonable use of agency equipment/supplies providing you make a formal, written request to your supervisor. Your supervisor will pass the request to management, who will determine whether to allow your request.
- Do not freelance during agency working hours.
- Do not freelance for direct competitors of the agency. If you are unsure if the person or company for whom you are freelancing is a direct competitor, please consult management.
- Violation of these guidelines shall result in discipline up to and including termination.
A Creative Solution – One agency principal had this problem for a number of years, until he gave the matter some serious thought. The principal did something that we thought was very creative: he hired his own employees to do freelance work. In most growing agencies, there are always a few older, smaller accounts that take time away from the agency's new, larger, more profitable clients. The principal set up a freelance situation to move this small-project work outside to his own employees. This took the work out of the agency, allowing it to be done at night on the employee’s own time, and kept the clients happy. More importantly, this in-house freelance strategy allowed the agency to fulfill, and control, small jobs for important clients—i.e. the chairman’s daughter’s graduation party invitation, or the marketing VP’s favorite charity newsletter to employees—while taking this less profitable work out of the agency environment. The principal paid his employees for this work, and billed the client mostly at net.
The Decision is Yours - It’s not that you seek to constrain the ability of your employees to earn the kind of living they deserve, or to have creative variety in life, or to fulfill their dreams of being a small business owner. It’s just that when employees freelance, conflicts soon arise. But keep in mind that today’s employees are less interested in employment for life, and more interested in opportunities to grow and advance. Be careful to not be so restrictive that you push some independent-minded creatives out the door.
One final note. We are tempted to tell you to make “no freelancing” a part of your employee agreement, but we won’t. The courts frown on contracts that are occupationally limiting for employees. I would rather you used the standard non-piracy language, and hope the courts will uphold that, rather than have you muddy the waters with non-freelancing language.
