In an answer to a related question I asked yesterday, a Stack Exchange community manager said:
Remember that when a moderator is hired as a Stack Exchange employee, they have to step down as a volunteer moderator.
I'm curious: why does this requirement exist? Why are moderators who get hired as Stack Exchange employees required to resign from their positions as volunteer moderators on all sites? Why aren't they permitted to moderate a Stack Exchange site during their spare time?
Of course, if their job title entitles them to hold staff moderator rights on one or more or all sites, they can continue to moderate sites they were previously moderating through their staff diamond, but not every employee gets these rights. Which means that moderators who are hired into positions which don't entitle them to these rights can't continue to moderate.
The above quoted answer also says that moderators must go through the reinstatement process in order to get their previous diamond back once they cease their employment, even if they continued to hold a diamond by virtue of being a staff member.
In any case, I'm curious to know why this rule exists.
Catija (the same CM above) commented that this requirement might exist because the moderator agreement contains a clause that the signer is "not an employee of Stack Exchange, Inc.", but that shouldn't be an issue since Tim Post commented elsewhere that even employees sign the moderator agreement, with their employment agreement taking precedence (and thus canceling out that clause).