Moonlighting Madness: Does Your Company Need a Policy for Employees With Second Jobs?
Employees take second jobs for several reasons. Usually, they need extra income. However, some might do so to build their skills, or simply for the enjoyment of it. Regardless of the reason, though, there could be some ramifications for you.
Most companies realize that they have little to no control over an employee’s off-duty conduct or activities. In most cases, an employer can address only activities that have a direct impact on the ability to fulfill one’s job responsibilities. For example, if an employee who drives a company vehicle loses his or her driver’s license due to DUI, the company can legally take action, including termination.
When it comes to second jobs, though, the rules aren’t as clear, since there is a fine line between protecting your company’s interests and infringing upon employee rights.
Why Companies Develop Moonlighting Policies — And Why They Could be Dangerous
Employee moonlighting policies are usually designed to protect the company’s interests. When a worker also works for someone else, there’s a risk of:
- Performance issues. Employees who work nights, for example, may be too tired to do their work during the day.
- Exposure of trade secrets. When an employee works for another company in the same industry, they could reveal trade secrets or expose intellectual property, even inadvertently.
- Conflicts of interest. Again, working for a competitor, or for a company that awards contracts (or does contract work) for your primary employer often presents a conflict of interest.
- Using company property to complete work for another company.
Clearly, employers could face some serious issues due to an employee’s second job, and a policy offers a certain degree of protection from loss. However, there have been cases in which moonlighting policies have gone too far in restricting an employee’s right to additional employment.
For example, in one case the employer required that all employees seek approval from their supervisor before taking an additional job — but the employer rarely addressed the requests in a timely manner, effectively preventing employees from accepting other work. In other cases, inequitable enforcement of policies — or a lack of clarity about policies — has led to charges of discrimination.
Often, employee moonlighting is already effectively covered by other policies that you have in effect. For example, employees should already know your expectations in terms of performance, and issues related to attendance, tardiness, or lack of productivity can be addressed via performance policies.
In addition, issues related to conflicts of interest and protecting trade secrets can be covered by non-compete and non-disclosure agreements. Non-disclosure agreements (NDAs) generally cover an employee’s conduct both during and after employment, preventing them from disclosing company information.
Non-compete agreements are somewhat less effective in terms of moonlighting, since they usually only prevent an employee from working in the same industry for a period after leaving the company. In order for such a contract to govern moonlighting, it must specifically state that working for competitors while employed is prohibited. Even then, a non-compete usually only covers work in the same industry, not all moonlighting.
Developing a Moonlighting Policy
While some believe that moonlighting polices are unnecessary, a clear and specific policy can prevent issues and contentious court battles should an employee feel unfairly treated. If you opt to issue a policy, it should cover a few basic points, including:
An employee’s duty to notify. Many companies require employees to notify their supervisor if they take another job. How much information the employee must provide should be spelled out in the policy. Limit your queries to information that is relevant to a nondisclosure or non-compete clause.
For example, you can ask for the same of the employer or the industry, and for information about duties, but not for the number of hours worked, schedule, salary, or supervisor’s name. In short, you should only ask for enough information to determine whether there is a conflict of interest.
Restrictions on outside employment. While NDA and non-compete agreements do cover certain activities, a moonlighting policy deals strictly with activities undertaken while employed. The policy should specifically detail any restricted types of work, industries, or company types.
Prohibitions using company time or resources for a second job.
Rules regarding moonlighting while out on leave. The law does not specify what employees can and cannot do while in FMLA leave, but an employer can legally prohibit an employee from working while on FMLA as long as the policy is the same for other types of leave.
Restrictions on outside work that could reflect negatively or harm the reputation of the organization. For example, there have been cases in which teachers or church employees have been dismissed because they work as adult entertainers, which is inconsistent with the values of the company.
There are cases in which an employer has the right to prohibit employees from taking on any type of additional work, such as when employees must have a certain amount of rest before undertaking their duties. However, most companies realize that preventing all employees from taking additional work only serves to limit the talent pool, and prospective employees are likely to look for less restrictive work elsewhere. That being said, a fair, clear, and equitable policy will protect your interests.