Federal law is not entirely clear in this area. Taking drastic action could trigger a lawsuit based on discrimination or invasion of privacy. As a rule of thumb, employers have more leeway to regulate off-duty conduct of workers when the activities are illegal, especially if the activities specifically relate to the job. Otherwise, it is a slippery slope to navigate.

In addition, many states have enacted laws that prevent employers from discriminating against employees who participate in legal activities when they are outside the workplace—despite the fact that those actions may prove to be detrimental to the company.

Even in states that do not provide a statutory right to privacy, it is generally illegal for an employer to unreasonably intrude on an employee’s “seclusion.” This refers to the physical areas where an employee has a reasonable expectation of privacy. Significantly, an employer cannot physically enter an employee’s home without consent.

The following are several key instances involving off-duty conduct:

Drug testing: As a general rule, drug testing is permitted in the course of a job application if the employee performs work that is security-sensitive or if the employee has given the employer cause to believe that he or she is impaired by drugs at work.

Religious beliefs: An employee’s religious beliefs (and activities relating to those beliefs) are generally protected by both federal and state laws. However, if an employee exhibits unreasonable behavior in the workplace—for example, attempting to convert other employees—he or she may be subject to discipline.

Outside employment: There is no strict legal prohibition against moonlighting. However, an employer is able to restrict after-hours work that is in conflict with its business. As a result, if an employee begins working for a direct competitor, it may be just cause for discipline or discharge.

Marital status: Generally, employers cannot discriminate on the basis of marital status or monitor such status, except for its need to regulate employee benefits such as health insurance. But the legal boundaries can become blurry when one spouse applies for a job where his or her spouse is a supervisor or, even more tenuous, if the spouse works for the competition.

Illegal activities: It is questionable whether an employer may discipline or discharge employees who have been arrested for driving while intoxicated or for the commission of a crime. State law often offers legal protection to the employee. Generally, employers may investigate further only if the conduct has a direct impact on the business.

Unfortunately, the best course of action is not always clear. Rely on your business and legal advisers for guidance whenever you are in doubt.