Assume that you are a supervisor at Carter Branchcomb LLC (the “Firm”), a North Carolina Limited Liability Company with its principal office in Charlotte, NC. The Firm’s principal business is providing consulting services to medium sized financial institutions within the State of North Carolina. A “medium sized financial institution” is defined as a financial institution with total assets of less than $50M dollars.  

Two of your employees, August, who has an employment agreement which you inherited in connection with the recent acquisition made by the Firm, and Sarah, who is also an employee not subject to a collective bargaining agreement, have formed an IRS 501(C)(3) entity to promote affordable housing in Charlotte. As a part of the activities of that entity, those employees have made contact with a number of the Firm’s clients and solicited their involvement in the non-profit affordable housing efforts. The employees have also participated in peaceful demonstrations for affordable housing.

A number of the Firm’s clients have contacted me with concerns about the activities of those two employees. As your manager, I have asked for your advice on this matter and have suggested that you consider terminating both employees immediately

Please prepare a memorandum addressed to me covering the following issues:

1. Discuss the issues raised by the activities of the two employees, the potential consequences of those activities to the Firm, and your recommendations as to what actions the Firm should take based upon the facts outlined. What additional information that is not given would be useful in your decision making process. Please elaborate.