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<< I don't think an employee should have to ask for permission to perform work 
elsewhere >>

Regardless, it is generally frowned upon, and in some cases, is specifically 
prohibited by company policy  (Whether this is legally supportable or not as 
grounds for termination, I do not know).

<< as long as it's not ... adversely affecting their performance while on the 
job >>

>From experience, I can tell you that any real or perceived flaw in the 
>employee's performance will be attributed by the employer to the employee's 
>involvement in the outside contract. ("What, you can't work 80 hours this 
>week?  I think we need to have a talk about your contracting interfering with 
>your performance here...")

-Bob Lancaster


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