Managing Conflicts of Interest in the Workplace

A challenging subject for many employers involves managing conflicts of interest in the workplace; the intricate balance between establishing solid relationships with clients, customers, and vendors and ensuring that those relationships do not transition to one that is an actual or perceived conflict of interest.  

By definition, a conflict of interest is a situation or circumstance that creates risk of a professional decision or action being persuaded by an external factor. Employers face such situations when employees engage in secondary employment with a potential competitor or in activities that may create an actual or apparent conflict of interest.

It is recommended that employers implement a conflict of interest policy in the workplace, as well as a specific policy defining the company’s practices with regard to business gifts. A thorough conflict of interest policy will define this subject matter and address the parameters of employer expectations with regard to an employee’s relationship with competitors or clients, as well as the types of activities that an employee could potentially engage in outside of work. 

The policy must convey the employer’s expectations of its employees; however, it is critically important that the policy does not establish protocol that could infringe upon employee rights under Section (7) of the National Labor Relations Act (NLRA). 

When crafting a business gifts policy, it is crucial that an employer sets specific guidelines, such as a dollar amount of a gift’s value. In addition, the policy should educate employees regarding the reporting procedure indoctrinated by the company in the case that employees are unsure of the appropriateness of a business gift.

Employers should also bear in mind that exceptions may need to be made on occasion, such as when refusing a gift could potentially jeopardize the organization’s ongoing relationship with the client. This decision should be made by a member of management and it should be treated as an exception for business purposes.

Ultimately, the business gifts policy should be clearly written and detailed with regard to the types of gifts that will be deemed acceptable as well as the maximum dollar amount of such a gift. This will promote consistency in an employer’s practices while supporting its stance on conflicts of interest in the workplace.