Dear Littler: I manage a growing family medical practice out West. It has come to our attention that one of our staff members maintains an adult-themed website. We learned about this when another staff member complained about some forwarded emails linking to the site in question. We have no issues with the employee’s job performance but are concerned about our reputation if word gets out. I’m not sure how to approach this, if at all. Are there employment-related issues I’m missing? What are our options?

                             —Website Wary

Dear Wary,

You are not alone! The wide expansion of social media and internet-based commerce have created numerous issues for employers. You don’t indicate whether the site in question is private or public, or whether the employee profits from this site, so we’ll cover an array of potential concerns.

The first issue is access to employees’ social media sites.  Twenty-eight states have social media privacy laws that prohibit private employers from accessing an employee’s non-public social media posts. Among other things, these laws prohibit employers from requesting or requiring employees to grant access to their personal social media accounts and requesting or requiring employees to disclose the login information to their personal social media accounts. Although you indicated you obtained the information about the employee’s website from another employee, depending on the state your business is in, you would be ill-advised to access the website yourself.

The next issue is whether you would be able to take any action against the employee for their off-duty conduct.  You don’t indicate which state in the West your business is in, but two western states, California and Colorado, have laws prohibiting adverse action for lawful off-duty conduct. California law prohibits employers from taking adverse employment actions for “lawful conduct occurring during nonworking hours away from the employer’s premises.”¹ Similarly, Colorado law prohibits termination of an employee for “engaging in any lawful activity off the premises of the employer during nonworking hours.”² There are two exceptions: if the off-duty conduct is related to the employment responsibilities and duties of the employee, or is necessary to avoid a conflict of interest, or appearance of a conflict of interest, with the employee's responsibilities to the employer.

You noted you are a family medical practice, so an argument could be made that the employee’s activities could adversely impact the company’s reputation and good will in the community, and therefore could in fact create a legitimate business conflict. We cannot say for sure that every court would agree that this is a legitimate business conflict. Thus, there could be some risk in taking adverse employment action although it seems that there is a reasonable argument for a conflict justifying adverse action against the employee. If you decide to take action, we recommend letting the employee know that you have been alerted to their side business, and would like to discuss your concerns about that business. The employee may decide to discontinue the business, thus relieving you of taking any adverse action. If the employee declines to discontinue the side business, you may want to investigate the harassment and moonlighting issues referenced below. You could have multiple bases for taking adverse action and it would be prudent to utilize all legitimate reasons you may want to have before taking adverse action.

There is also the issue of whether sending the adult-themed website to the employee’s co-worker constituted sexual harassment. Although, as discussed above, there may be limitations on the employer’s ability to access the website, if the email forwarding the website is offensive, that may be grounds for disciplinary action against the sender. As noted in the EEOC’s recent harassment guidance, a hostile work environment claim can be based on conduct that occurs in a virtual work environment, including through “work-related communications systems, accounts, devices, or platforms, such as an employer’s email system, electronic bulletin board, instant message system, videoconferencing technology, intranet, public website, official social media accounts, or other equivalent services or technologies.” Now might be a good time to revisit your company’s harassment policy.

Leaving aside the content of the email and the website, can you, as the employer, prohibit employees from “moonlighting” (i.e., taking a side job)? According to the Department of Labor’s Bureau of Labor Statistics, in 2023, more than four million U.S. workers held a part-time job in addition to their full-time job. In addition to California and Colorado, company policies prohibiting employees from moonlighting may be unlawful in other states as well. For example, Washington state law provides that an “employer may not restrict, restrain, or prohibit an employee earning less than twice the applicable state minimum hourly wage from having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self-employed.” However, these laws do not prohibit employers from taking action against employees whose moonlighting interferes with their job performance, who work for another employer while on the clock, or who use company resources or equipment, or confidential company information, trade secrets, or data for other employment. In this regard, in consultation with outside counsel, you may want to consider implementing a policy or adding provisions to your employee handbook that:

• requires employees to notify you of outside employment;
• states that secondary work cannot interfere with performance standards and work requirements;
• prohibits the use of company equipment and supplies for outside employment;
• prohibits the use of confidential company information, trade secrets, or data for other employment; and
• provides for discipline up to and including termination for violations.

As always, employers must be careful to apply the same performance standards for all employees.