Company: CoreBuild Infrastructure (fictitious), a mid-sized construction and real estate firm with 2,400 employees, delivering residential, commercial and infrastructure projects across eight cities in India.
Background
Sanjay Verma has been a project manager at CoreBuild for four years. His work is solid. Deadlines are generally met, vendors are managed competently and his managers have never had cause for a formal complaint.
What they did not know, until recently, was that Sanjay has been running an interior design business on weekends.
The business is small but active. He takes on residential and commercial fit-out projects, sources materials and coordinates contractors. It is not identical to CoreBuild’s business, but the overlap is difficult to ignore. Interior design sits within the same construction and real estate ecosystem. More importantly, Sanjay uses some of the same vendors he manages in his CoreBuild role. Some client contacts he developed through CoreBuild have also become aware of his private practice.
There is no evidence that he has poached a CoreBuild client. No project has been lost. No vendor relationship has been formally compromised.
The situation came to HR’s attention through an anonymous tip three weeks ago. A quiet investigation confirmed the broad facts. Sanjay’s peers know about the business, and a couple of them have already mentioned it informally to their managers.
There is another complication. CoreBuild has no clear policy explicitly covering outside professional activities of this kind.
HR now has to decide what it is dealing with: misconduct, a policy failure, or something in between.
The dilemma
Should HR treat Sanjay’s side business as a conflict of interest and initiate disciplinary action, even though no demonstrable harm has occurred and the organisation has no clear policy explicitly prohibiting it?
Or should HR acknowledge the policy gap, counsel Sanjay and use the incident to create a transparent framework for outside professional activities?
And if neither feels sufficient, is there a third path: require Sanjay to disclose the business formally, examine the specific areas of overlap and allow him to continue only within clearly defined boundaries?
What’s really at stake
This is not simply a debate about whether employees should be allowed to have side hustles.
It is about what happens when a private business begins drawing value from relationships created through the day job.
CoreBuild has not lost a client. No vendor has complained. There is no evidence that Sanjay has misused confidential information. On the surface, little damage has been done.
But the discomfort is not imaginary.
Sanjay is using a vendor network he manages through CoreBuild to service private clients. Those relationships come with access, pricing knowledge, negotiation history and professional trust. Even without deliberate misuse, the boundaries can become blurred quickly. A vendor dealing with Sanjay in both capacities may eventually have to wonder which relationship takes precedence.
The fact that some CoreBuild client contacts now know about his private practice adds another layer. Nothing improper may have happened yet, but the possibility of commercial overlap is no longer remote.
There is also the question of precedent. Sanjay’s peers know about the business. If HR ignores it, employees may reasonably conclude that outside businesses using company relationships are acceptable as long as no obvious harm occurs. That is a difficult standard to defend when the next case is less benign.
Yet CoreBuild has its own accountability to confront. If it has never clearly told employees where outside professional activity becomes a conflict of interest, punishing Sanjay retrospectively is difficult to justify. Organisations cannot leave a boundary undefined and then behave as though an employee knowingly crossed it.
That is what makes this case more complicated than a straightforward moonlighting violation. Sanjay may have exercised poor judgement. CoreBuild may also have failed to establish the rules by which that judgement should be assessed.
The deeper question is harder to avoid: is CoreBuild protecting itself from a genuine conflict of interest, or discovering a gap in its own policy and asking Sanjay to bear the consequences?
We asked three HR leaders how they would approach this dilemma.
What HR leaders said
Shailesh Singh, Former CHRO, Axis Max Life
“I would first look at the employment contract and the organisation’s policies. There could be a clear conflict-of-interest provision requiring employees to avoid situations where their outside interests could influence business decisions, such as favouring vendors or using professional relationships for personal gain.
If such a policy exists and clearly covers this situation, then there is a violation and the organisation has to deal with it. The fact that the employee is credible or dependable cannot change that. However, if the policy is silent, unclear or has never been communicated, I would take a different approach. We cannot penalise someone for violating a rule that was never clearly established.
In that situation, I would counsel the employee, advise him to exercise discretion and ensure that his outside business does not conflict with the organisation’s interests. I would use the incident to articulate a clear policy so that the issue is not left to individual interpretation going forward. If there is no demonstrable damage and the policy framework was unclear, I would give the employee a second chance.
On the broader question, moonlighting policies primarily exist to protect the business. When someone is hired full-time, an organisation is within its rights to set expectations around exclusivity because outside businesses can eventually interfere with the primary role. Clients from a side business may call during working hours, seek clarifications or require servicing. If an organisation is paying for full-time employment, it is reasonable to expect full-time attention.
That said, occasional outside engagements can be considered if they are transparently disclosed and do not create a conflict. But organisations should generally discourage employees in full-time roles from running businesses that could compete with or distract from their primary employment.”
Manish Majumdar, Head, HR, Centum Electronics
“In this case, I see a very clear conflict of interest because the employee is offering essentially the same category of service that the organisation operates within.
I would compare it to a hospital where a doctor tells one of the hospital’s patients that he can provide the same treatment privately at his own nursing home. The problem is not simply that the doctor has another professional activity. It is that he is taking the same service the organisation offers and offering it privately to the very market he is expected to serve.
If the employee had a completely unrelated skill, the situation would be different. If someone delivers lectures at a college over the weekend and does not use company resources, information or relationships, I would not necessarily have a concern. But here, the employee is working within the same ecosystem. He needs to disclose it and seek clarity on whether he can continue providing those services independently to clients outside the company’s direct portfolio. The organisation can then decide whether the arrangement is acceptable or whether his terms of engagement need to change.
Companies should have a clear policy on outside professional activities. Such a policy protects both sides. The organisation has a right to know if an employee is profiting from knowledge, relationships or resources acquired through their role. Employees need clarity about what they can and cannot do. Rather than calling it a moonlighting policy, organisations could frame it as a policy on professional activities outside the company. Disclose it, assess it, and if there is no conflict, allow it.”
Satyajit Mohanty, Senior HR Professional
“I would first go back to the employment contract. Most traditional companies have clauses stating that employees should not engage in another profitable activity while working for the organisation. If the contract clearly prohibits such activity, this becomes a contractual violation and the organisation has little choice but to act, even if that means losing a reliable performer. Otherwise, it risks creating a precedent where contractual provisions are selectively enforced.
But if there is a policy gap, I would take a more considered approach. The world is gradually moving towards a gig economy and organisations increasingly have to think differently about scarce talent. If an employee is delivering the expected results and is not directly competing with the company’s business or misusing its resources, companies may need to give people greater autonomy.
The expectation that an employee should devote all their mental space to the company is becoming outdated. Younger employees increasingly have an entrepreneurial instinct they want to satisfy alongside their corporate careers. That flexibility cannot apply, however, when the outside activity directly conflicts with the company’s business or involves misuse of company resources.
In Sanjay’s case, the use of CoreBuild’s vendor network and client relationships makes the situation particularly serious. That is the line that matters here, not the fact of the side business itself.”
If you were the CHRO at CoreBuild
No client has been lost. No policy explicitly covers the situation. But Sanjay is using relationships developed through his day job.
What would you do?
- Initiate disciplinary action on conflict-of-interest grounds?
- Require formal disclosure, counsel Sanjay and create a clear outside-activity policy?
- Allow the business to continue only within clearly defined boundaries, while closing the policy gap?
Or is the bigger question this:
If the organisation never defined the boundary, can it punish an employee for crossing it?
Share your perspective in the comments or on LinkedIn using #HRKathaCaseInPoint.