Do You Need an Employee Moonlighting Policy to Protect Your Business?

If you are concerned that another job might interfere with an employee's work for your business or if you want to prohibit employees from working for competitors, you may want to protect your business with a moonlighting policy.

Depending on the type of business or industry you're in, your workforce may include a number of employees who are working more than one job. If this is the case you may want to consider a moonlighting policy, particularly if it's likely that another job might interfere with an employee's job with your business or if the employee's other job is with a competitor.

An employee's outside employment can place a burden on your business in the following ways:

Your employee may be too tired to perform your job effectively because another job might require the employee to work long or late hours.
Your employee may not be able available to work the hours your schedule demands because another job also requires the employee to work the same hours.
The employee may be spending working time performing activities related to another job.
The employee's job at the other place of employment may represent a conflict of interest.

If you decide that you need a moonlighting policy, don't focus on regulating employees' off-duty conduct. Instead, any policy against moonlighting should focus on the issue of noninterference with your business, specifically the employee's performance at your business and the work hours required by your job. Don't forbid employees from having other jobs altogether — it will be difficult to enforce and could result in the loss of some good employees. As with all policies, making your requirements too restrictive will hurt you more than help you.

Handling Moonlighting Employees

The only time you really need to get involved with an employee's moonlighting habits is when they affect your business and the employee's performance of his or her job. If you develop a moonlighting policy, use it when you counsel employees about whatever problems you perceive the other job causes for your business.

Use these examples to see if you are on the right track in determining when it's appropriate to ask an employee to give up another job.

Example 1: Alayna is your employee and she deals frequently with customers and the public over the phone. She does her job well. You discover that Alayna also has a job as a server at a restaurant known mainly for its scantily clad waitresses. Should you ask Alayna to give up her job?

No, what Alayna is doing is lawful, off-duty conduct and some states have laws that protect employees from discrimination by employers for such off-duty conduct. Depending on the business you're in, in very limited circumstances you may have a bona fide reason for asking Alayna to give up her other job.

Example 2: Zachary is your employee, and his work hours are 9:00 a.m. to 6:00 p.m. Zachary also works as a card dealer on a casino gambling boat. Zachary has been late in getting to work quite frequently, and it seems to be happening more and more. Do you ask Zachary to give up his other job?

Yes, it's appropriate to ask Zachary to give up the other job because it's affecting his performance at your business.

Creating a Moonlighting Policy

If you decide to have a moonlighting policy, it doesn't necessarily have to prohibit employees from having other jobs. You will want to make it clear that other jobs should not interfere with an employee's performance at your business, however. Other than that, basic moonlighting policies generally contain statements addressing:

interference with the primary job
conflicts of interest
your approval of additional employment

Interference with primary job. The main purpose of most moonlighting policies is to set out your expectation that employees will treat their work at your business as their primary job and will not allow other jobs to interfere with the performance of the primary job.

You may want to consider this clause for your policy. You do not have to restrict an employee's other job opportunities. You're just making it clear that you expect the employee to put your job first.

An example of such a statement is:

Second jobs are permissible only if the employee can continue to perform his or her normal work requirements within the scheduled workweek. Work assignments and schedules will not be changed for you to perform duties not related to XYZ Corporation.

The following clause goes a bit further by asking the employee to inform you of any other jobs that the employee has.

XYZ Corporation has no objection to your holding another job as long as you can meet the performance standards for your job. XYZ Corporation should be notified of your decision to work a second job. If your work performance is affected, we may ask you to drop one job.

Conflict of interest. Part of the reason for having policies is to protect your business. A conflict of interest policy can help you ensure that employees don't start working for your competitors while they're working for you.

The following is an example of a conflict of interest clause:

No employee shall ever be permitted to engage his or her time or talents with a firm that competes with XYZ Corporation. No employee can be permitted to reveal what he or she learns regarding techniques, policy, programs, and so forth to any other individual or company whether a competitor or not.

The sample below is more detailed and broader in covering not only the business's information, but in stating that the other job must not interfere with the employee's overall service to the business.

Except as otherwise agreed, employment by XYZ Corporation shall be deemed to be "full time." XYZ Corporation recognizes the fact that an employee may be justified, under some circumstances, in accepting casual outside employment to be performed after working hours if no conflict with XYZ Corporation's interest is involved.

No employee shall accept or engage in any activity, business, or employment, either during or after working hours, that would conflict with XYZ Corporation's interests or diminish the ability of the employee to render to the company the full, loyal, and undivided service which is contemplated in his or her employment by the XYZ Corporation.

Requiring approval of employment. In formulating your moonlighting policy, you may want to include a clause that states that an employee must get approval for any outside employment. The two examples below contain sample language you can use for this type of clause:

Example 1: If you wish to work part-time for another firm, please discuss the matter with your supervisor prior to accepting the job. There may be good reasons not to accept another job and thus a problem can be avoided.
Example 2: Permission to hold any outside employment or business interests with anybody doing business with XYZ Corporation, its suppliers, or dealers must be secured in writing from XYZ Corporation. Failure to secure advance permission may result in immediate termination.

If you include this clause, be sure that it isn't too restrictive and that you apply it consistently to all employees — don't allow one person to work another job and prohibit another employee from doing so if circumstances are similar.