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How to Protect Against Employee Moonlighting

Do you suspect your employees are working a second job – and that it’s starting to affect the quality of their work at your company?  If you haven’t already run into this problem, it is likely your business will in the future.  When the cost of living is already so high and keeps increasing, even well-paying jobs may not be sufficient to cover all of an employee’s expenses.  As a result, employees are hard pressed to find solutions to provide the cash flow they need.  Struggling employees will often seek a second paying job to earn extra income to meet their needs.

Most of the time an employer is not informed that an employee is working a second job and the employer is surprised to learn that their employee is now juggling two jobs.  However, it most likely is not a surprise to the employer that something about the employee has changed, especially when the employee demonstrates a decrease in the productivity and quality of their work, the employee’s absences from work increase, and the employee begins to arrive late to work.

Can employers simply ban employees from taking a second job?  Unfortunately for employers, the answer is most likely no.  Most states have enacted laws affording individuals the right to work, which outweighs most adverse affects to employers.  Aside from adopting prohibitions barring employees from working for a competitor, starting a new business to compete with your business, or disclosing your company’s proprietary information or trade secrets, few employers want to implement policies that interfere with their employee’s off-duty activities due to potential violations of the National Labor Relations Act (NLRA) and state laws.

However, employers are not left without any means to protect their businesses against the detrimental effects of moonlighting.  Employers should create a legally complaint moonlighting policy that focuses on the issue of noninterference with your company instead of regulating employees’ off-duty conduct.  Specifically, the policy should focus on the employee’s job performance and the required work hours for the employee’s job.  The policy should set forth the expectation that the employee must first meet the demands of the current job, which could include covering others’ shifts or working overtime.  Further, an employee’s schedule and work assignments will not be altered to accommodate the employee’s duties for their second job.  The policy should also include a statement that permits employees to work a second job so long as the outside work does not negatively impact or interfere with the employee’s job performance.  The policy should also state the consequences an employee may face if their job performance suffers as a result of their responsibilities relating to a second job.

A moonlighting policy may also include provisions that prohibit employees from working a second job that creates a conflict of interest for your company.  Those provisions should include examples of what constitutes a conflict of interest.  For example, working for a direct competitor or soliciting customers from the primary employer to work for a competitor would qualify as a conflict of interest.

Employers may also want a provision requiring employees to provide notice prior to accepting a second job.  This notice requirement may alert employers to their employees’ financial difficulties that the employer may be able to help with, such as giving an employee additional work or approving overtime for the employee.  This may provide an incentive for the employee not to accept the second job and be able to contribute more towards your business’ success.  However, employers should note that employees should not be required to obtain approval prior to accepting a second job offer, since that can be viewed as the employer discouraging protected activity under the NLRA. Hence, the policy should also include a statement that this policy is not intended to discourage and will not apply to employees participating in any protected activity under the NLRA.

Contact PMP for help with drafting or revising your company’s moonlighting policy.


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