New Delhi, India – July 6, 2025 – The recent “Soham-gate” controversy, involving Indian software engineer Soham Parekh allegedly working for multiple US startups simultaneously without their knowledge, has reignited the fiery debate around moonlighting in the tech industry. While some argue for the individual’s right to pursue multiple income streams, the systemic issues exposed by Parekh’s case highlight critical reasons why the blanket legalization of undisclosed moonlighting poses significant risks to businesses, particularly in the fast-paced startup ecosystem.
Parekh, who has since publicly acknowledged juggling jobs, claiming “dire financial circumstances” as his motivation, sparked outrage among Silicon Valley founders like Suhail Doshi of Playground AI, who accused him of “scamming” companies and fabricating resume details. This incident underscores that the discussion around moonlighting isn’t just about extra income; it’s about transparency, trust, and the very fabric of professional ethics.
The Case Against Undisclosed Moonlighting: Lessons from Soham-Gate
While moonlighting itself isn’t illegal in India, its legality often hinges on employment contracts and company policies. The “Soham Parekh story” vividly illustrates why many companies, especially in the knowledge-based sector, remain vehemently against it without full transparency:
- Breach of Trust and Contractual Obligation:
- The Core Issue: Parekh’s controversy wasn’t simply about working multiple jobs; it was about doing so covertly, allegedly misrepresenting his availability, location, and commitment. Most employment contracts include clauses requiring full-time employees to dedicate their efforts to the primary employer and often prohibit external work without explicit consent.
- Impact: This breach fundamentally erodes the employer-employee trust, which is vital for any productive relationship, especially in small, agile startups where every team member’s full commitment is critical.
- Conflict of Interest and Intellectual Property Theft:
- Hidden Danger: When an employee secretly works for multiple companies, particularly in the same industry or for competitors, the risk of conflict of interest skyrockets. An employee might inadvertently (or deliberately) share sensitive information, client lists, or strategic insights that could benefit the secondary employer or harm the primary one.
- The IP Minefield: Intellectual property (IP) is a company’s lifeblood. If an employee develops code, designs, or innovations while moonlighting, ownership can become a legal quagmire. Did they use the primary employer’s resources, knowledge, or even their working hours? This is a major concern for companies, as highlighted by background verification firms like OnGrid flagging such overlaps.
- Performance Degradation and Burnout (The Hidden Costs):
- The Illusion of Efficiency: While some moonlighters claim they can manage multiple jobs without performance dipping, the reality is often different. Juggling 140 hours a week, as Parekh reportedly did at his peak, inevitably leads to severe fatigue, stress, and burnout.
- Divided Attention: A drained employee might struggle with focus, creativity, and meeting deadlines in both roles. This impacts not only individual productivity but can also drag down team morale and project timelines, particularly in collaborative environments.
- Unknown Insight: Beyond direct performance, undisclosed moonlighting can lead to “blue moonlighting” – a term for failed efforts at juggling multiple jobs, resulting in low productivity and elevated stress levels. Companies cannot effectively monitor or support an employee they don’t know is struggling with multiple hidden commitments.
- Misuse of Company Resources:
- The temptation to use company laptops, internet, software, or even office time for a secondary job is high. This constitutes a direct misuse of employer resources and an ethical breach.
- Legal and Reputational Risks:
- For companies, an employee’s undisclosed moonlighting can lead to legal battles over contract breaches, IP theft, or even regulatory non-compliance. For the employee, being caught can lead to termination, blacklisting within the industry, and severe reputational damage, as seen with the “Soham-gate” fallout.
The Counter-Argument: Why Employees Moonlight & The Case for Flexibility (with Transparency)
It’s crucial to acknowledge the driving forces behind moonlighting, as these also need addressing in a balanced approach:
- Financial Necessity: Rising inflation, stagnant salaries, and job insecurity often push individuals to seek additional income streams. Parekh himself cited “extremely dire financial circumstances.”
- Skill Development & Passion Projects: Moonlighting can be a way to acquire new skills, explore a different industry, or pursue a passion that isn’t fulfilled by the primary job.
- Entrepreneurial Aspirations: Some use side gigs to test business ideas with the security of a steady income.
- Flexibility of Remote Work: The post-pandemic shift to remote and hybrid models has indeed made it logistically easier to manage multiple commitments.
The Crucial Distinction: The core of the issue isn’t that an employee wants to moonlight, but how it’s done. Many companies are open to employees pursuing external work if it’s disclosed, approved, and doesn’t conflict with their primary role. For instance, a software engineer teaching coding on weekends or running a small e-commerce store in their free time, with full transparency and no performance impact, is a different scenario from working for direct competitors or misrepresenting availability.
The Path Forward: Transparency, Policy & Open Dialogue
The Soham Parekh story serves as a stark warning. Instead of a blanket legalization of undisclosed moonlighting, the focus should be on:
- Clear Company Policies: Employers must clearly define their stance on moonlighting in employment contracts and company handbooks, outlining what is permissible and what is not.
- Open Communication: Employees should be encouraged to disclose any secondary work to their primary employer. This allows for a discussion about potential conflicts and ensures transparency.
- Performance-Based Evaluation: Companies should focus on output and quality, but also be vigilant for signs of fatigue or decreased engagement that might point to over-commitment.
- Addressing Root Causes: Employers might also consider if competitive compensation, opportunities for skill growth, and better work-life balance within the primary role could reduce the need for employees to seek covert secondary employment.
Ultimately, while the desire for financial security and personal growth is understandable, the “Soham Parekh story” vividly underscores that trust, transparency, and loyalty are non-negotiable in professional relationships. Legalizing undisclosed moonlighting would undermine these foundational principles, opening a Pandora’s Box of ethical, legal, and operational challenges for businesses in India’s competitive landscape.
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