Can a company really enforce loyalty at the expense of an employee's financial well-being?

Question

I was just cleaning out some old papers and stumbled upon an employee handbook from a prior company I worked for. Skimming through it, I came across a paragraph which piqued my curiosity. The paragraph reads as follows:

Employees must avoid situations in which the employee's obligations to the organization compete with the employees financial interests, the employee's obligations to another organization or governmental body or the employee's desire to assist relatives or friends.

I will prefix that I'm not attempting to open a debate or solicit legal advice. Rather my question is just how far can an employer go to control an employee's personal life and choices outside the workplace? It's a bold attempt to force employee loyalty at the expense friends, family or duty to government/country (whether that be military service, or cooperating with an investigation that may conflict with the company's interests).

Answer 1

For example, if your company installs bathrooms, and you are the one responsible for pricing orders from customers and sending out quotes, then you should give the job to someone else when your brother-in-law needs a new bathroom. Or worse, if you need a new bathroom yourself, since then it is clearly in your own financial interest to keep the price as low as possible, even if it means a loss for your company.

Usually called "avoiding conflict of interest". So there is nothing unusual or malicious going on here.

On the other hand, if you are a valued employee at a not very large company, there's a good chance that you or your brother-in-law might get an unusually good price for that bathroom from your boss.

Answer 2

Just how far can an employer go to control an employee's personal life and choices outside the workplace?

They can go pretty far.

But this isn't about loyalty, it's about protecting the company's interests.

They aren't telling you that you cannot do whatever you like in your personal life in general. They are only saying that you must avoid situations where your personal life conflicts with the company's interests.

For example, you can have a painting business on the side, but you cannot place a bid to paint the company kitchen. You can help your cousin get a job, but you cannot use your knowledge of your company's client list to help your cousin land a job with the competition.

Answer 3

This is a condition of employment; note the word "must" rather than "should".. Yes, if they want to they can make violating it a firing offense.

Generally you can find something which conforms to this guideline while offering the same benefits, so it usually is no more than an inconvenience.

Answer 4

My interpretation of the sentence is that the employer has decided that the employer is better off with employees avoid these situations than getting into these situations and making a choice at the expense of the employer. This employer seems aware that making impossible or onerous demands is the surest way to make sure that these demands will not be complied with let alone met.