What are the actions taken if you discover that your team leader is working for another company's favor?

This means he is not loyal and action should to be taken by high management against him

" In some cases, dismissal may seem an insufficient sanction, particularly where the scope of the employee’s moonlighting activities has been extensive and the employee has been diverting business away from his or her employer. So can the employer seek financial recompense for the employee’s breach of obligations?

If the employee has breached his or her contract, then the employer may be able to bring a claim. However, any damages awarded are typically calculated to put the employer in the position that it would have been in had the contract been properly performed.

In many cases, it can be difficult to establish that the employer has suffered any sort of financial loss if the employee is carrying out other work that has no direct financial impact on his or her employer. Analyse whether or not you can show that the scope of the employee’s competing activities has gone so far as to take business away from your company before embarking on litigation.

If the employee’s activities have not caused direct impact, then a claim for breach of contract may be of limited use. However, where an employer can establish that one of its employees owes fiduciary duties, then there is greater scope for remedial action."

Quoted from an article by James Green 

supervisor is a person who monitors more than one team and has more experience than those he supervises and a team leader is one who is a fast and active participant. he or she may be part of the team

Sack him and don't pay any compensations.

1. Do a complete dudilegence from HR for genuiness of the fact that team leader is working for other company

2. If Yes then stratight take the disciplianary action and terminate from the services as this is absolute integrity of the individual. 

1.  Suspend the person immediatly and Talk to him or her and find out WHY

2.  Dismissal and terminations etc. could be policies but you need to know WHY this was done if possible so the root cause is addressed.

3.  Employee contracts should specify this clause too

Code of conduct clearly stipulate the manner at which one must not put comany name at disrepute and if he/she does what sunction will follow.

First of all if u need him or he have qualities so ask to him you r working in our company and you r favoring another company Why? you have salary problem r you r not satisfied in our management. First you have to tell us what the problem if we didn't solved the your problem then you can join r favours another companys. If you don't need this guy you have to kick from this company without any questions how he can do like that just for some moneys.

If my leader is doing such a shameful act. Then firstly I ask about the matter and tell to stop all this as these things are not made for good people. I enhance and encourage my leader to start with something new and give some time. If he/she continues doing this then I inform to the senior staff of the company.