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A coworker in the same building as me uses downtime to knit at his desk. Apparently he will sell these knittings on Etsy for a good deal of money. (>$8k over the course of a year)

I obviously don't care, but I am certain that he is also getting paid by the company while he works on his for-profit knitting.

All judgement aside, what's the worst or most likely possible punishment he could be subjected to as a result of this activity?

Location Northeast US.

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To the best of my knowledge, there is nothing illegal about this. It might be against company policy. The company could fire a person who did another job during work hours, or discipline such a person in some other way. However, if conducted during "downtime" when a person must be ready and available but has not actual duties, and if there is no interference with the person's actual work, the company might well take no action.

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    They would not, for instance, be able to sue my coworker for a portion of his earnings (or all) since he did it while on the clock? – Onyz Jan 2 at 14:58

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