specs for sidelines
can an architecture firm legally be held responsible for work that employees do on their own time? Technically, no. But as with all legal matters, there's the written policy, and then there are nuanced interpretations. Barbara Sable, a partner at the McLean, Va., law firm Ames & Gough, says most errors and omissions policies cover only work that's rendered on behalf of the firm. However, she has seen at least one case—a residential project—in which a firm was sued when an employee's moonlighting job went bad. The case rested on the fact that the employee had used company equipment. The firm had a no-moonlighting policy, but the homeowners claimed that because they were receiving faxes on company letterhead, they began to believe it was the firm providing the service. “The homeowner was able to successfully collect against the insurance policy,” Sable says. “That's not the intent of the policy, but it's a risk for the firm. I think the clients realized that the individual had limited assets and the firm had more substantial assets.”
Most insurance companies have reasonably priced policies for individuals to prevent this situation. When a firm allows moonlighting, Sable recommends that it require the employee to carry his or her own insurance policy. Premiums depend on annual billings, but for $2,000 to $4,000, an architect can receive $100,000 worth of coverage for any one claim, with a $300,000-per-year limit.
The common lawyerly advice is that firms should restrict moonlighting. The problem, says David Pfeffer, an attorney with Arent Fox in New York City, is that in the design world, it happens all the time. “You'd want to allow it in certain circumstances, such as pro bono work, or if it could lead to an assignment for the firm,” he says. “You'd want to restrict it unless the employee received a supervisor's OK.”