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I currently work at Old_Co. At Old_Co I created a sophisticated application suite that's used by many of our employees. Unfortunately, the administration changed and I started job-hunting. I received an offer from NEW_CO as a full-time employee, which I accepted.

While doing the hand-off with the other engineer, I found out that Old_Co wants to hire an outsourcing company/individual(s) to deal with the application suite I created.

With all that happening, I began wondering: what if I work with Old_Co a few hours a week as a contractor while working full-time at NEW_CO? I would make sure that my performance at NEW_CO is not affected.

Is this something ethical or correct? I really enjoyed developing the application at Old_Co, and I know that an outcourcing company will be extremely expensive and will end up creating a new application.

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    "I know that an outcourcing company will be extremely expensive" If you do end up doing this work for them, make sure you do your research on taxes and the like. You will be more expensive to the company as well as when you were employed by them (if you want to earn a reasonable after tax rate).
    – Dnomyar96
    Jul 21, 2022 at 5:50

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You'd have to check your NEW_CO contract/handbook. There's probably language in there about taking outside work. It'll usually say that such work has to be approved by them.

In which case you just have to ask them and there's your answer.

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    +1. Even if it's not specifically mentioned in their contract/handbook, I'd still clear it with NEW_CO anyway. It'd be a bad first impression if they think you've been hiding it from them. If they are a reasonable employer, they probably won't mind (as long as it's not for a direct competitor and it doesn't affect your work for them).
    – Dnomyar96
    Jul 21, 2022 at 5:48
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As @Kaz says, you need to read your contact and speak to NEW_CO to get approval. If they're a competitor, the answer is likely to be a "no".

But you also need to think carefully about how you're going to do any subcontracting, to make sure that it stay above board and you protect yourself. Things like:

  • How are you going to invoice them (and on what payment terms)?
  • What if they don't pay you
  • What do you need to do about tax?
  • How will you access their systems/store data? Are they going to provide you with equipment, or will you use personally kit? You certainly shouldn't be using NEW_CO kit to access Old_CO systems.
  • What does your contract with NEW_CO say about any intellectual property created while working for them? Even if it's outside your working hours and on personal kit, they may still have a claim.
  • What kind of response times/SLA are you going to offer? If their application breaks in the middle of the day, do they wait until the evening? The weekend?
  • What if something goes wrong? Do you have insurance? Can OLD_CO sue you directly, or will you use some of of limited company to protect you?
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  • In the UK, you could do this as a self-employed person (just send a bill without VAT, and. they pay it, and you have to do a tax return and pay income tax on the money at the end of the year), or by starting your own company (which is financially great if all your money goes through the company and you work with people who know what they are doing, but relatively pointless if you are already in full time employment. Unless you want to turn your income from the old company into savings.
    – gnasher729
    Jul 21, 2022 at 12:11
  • @gnasher729 OP appears to be in the US, so I don't know how the rules work there. But at least in the UK, doing it through a limited company also gives you some protection if things go wrong, because you have less personal liability.
    – Gh0stFish
    Jul 21, 2022 at 12:14
  • @Gh0stFish - In the US it would be similar to the UK, the author would be responsible for any additional tax obligations, due to that additional income.
    – Donald
    Jul 21, 2022 at 15:50

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