Do Employees Have the Right to Moonlight?

    Moonlighting can be a challenge for both employees and employers. From employers’ point of view, the expectation is that employees will show up “present, prompt and prepared,” as one of my law professors used to say.

    If employees are hustling and juggling to take care of multiple jobs, sometimes things slip. Fatigue, transportation glitches, lack of sleep and poor attentiveness can become issues. Employees sometime perform mediocre work at all their jobs, instead of excellent work at the day jobs that are their primary livelihoods. If that happens, primary employers are within their legal rights to terminate employees because moonlighting is hurting performance, dependability and attentiveness.

    Some employers welcome moonlighting—when they’re the ones doing the hiring. Moonlighters tend to be cheaper and more flexible than regular full-time employees, who may be earning expensive overtime wages. Moonlighting employees also are less likely to qualify for such benefits as medical insurance or retirement because some other employer may be providing them. Moonlighting employees are particularly attractive and affordable for short-term and unusual projects and work such as inventory, month-end or seasonal rushes, and annual maintenance.

    Many employers insist that their employees’ true commitments be to their full-time and primary jobs. Employers may lawfully prohibit or severely limit moonlighting, especially if the jobs are safety- or production-sensitive and response times to unscheduled work are critical. Examples would be emergency, medical, repair or safety personnel.

    Sometimes there is a requirement that certain employees carry beepers or cell phones in order to be available on call on certain days, especially weekends. Such immediate availability requirements may make moonlighting at another job impractical for workers, and especially problematic for their employers.

    Another concern is whether the moonlighting may violate employees’ duty of loyalty to their primary employers. If the worker is moonlighting for a competitor, all kinds of issues can arise. Employees owe their employers loyalty, meaning they cannot violate confidences or take advantage of proprietary or secret information in order to moonlight.

Moonlighting and noncompete agreements
    The stakes are higher for both employers and employees if the moonlighting workers have noncompete, confidentiality or trade-secret agreements with primary employers. Such employers may consider spelling out why moonlighting is a bad idea. Here are a few reasons that can be cited to employees:

    • If employees’ moonlighting work violates noncompete agreements, primary employers can fire them and seek injunctions barring competing work.

     • Employers can sue subsequent employers for tortiously interfering with their noncompete agreements by hiring former employees.

     • By competing with their day-job employers, employees could wind up losing both jobs, and be left with little hope of getting subsequent jobs in the field.

     • It’s a myth that if an employer terminates an employee who has a noncompete agreement, the noncompete terminates too. Many noncompete agreements survive and remain enforceable, even if there are discharges, resignations, layoffs, corporate mergers or acquisitions, or changes in ownership. The same may be true for forced furloughs, which have been increasingly popular during the downturn.

    The law governing noncompete agreements varies from jurisdiction to jurisdiction. So it is best for an employer to check with an attorney before taking a chance on hiring someone whose noncompete may still be in force, despite a furlough or firing.

    My best advice to employees is to assume that your noncompete agreement has teeth until your lawyer has reviewed it and your circumstances. Be very careful before you commit to and sign a noncompete agreement.

    My advice to employers is also to check with a lawyer on any noncompete agreements, since results vary state to state. It is also prudent to check with someone moonlighting for you about any noncompete limits on the work.

The proactive approach
    One way to head off moonlighting problems in your workforce is to let employees know that you expect them to disclose and clear any potential moonlighting issues before undertaking such jobs.

    If you are generally amenable to moonlighting, let your workforce know that. Tell employees that moonlighting isn’t the problem—lying about it is, and could result in the loss of their day job. You could let the workforce know that you understand their dilemma in a bad economy. You understand that they are trying to make ends meet. The proactive approach is a good one if your company has many entry-level manual or clerical jobs where pay tends to be low or if you are in an industry where it’s quite common for workers to have multiple jobs.

    Emphasize that you expect employees to be at work and on time. Say that working second (or third) jobs will not be an acceptable excuse for absences or tardiness. You could add, however, (if you hold this view) that moonlighting may be a better explanation than sleeping late or blowing off work.

    You might also want to let your workforce know that anything that happens at moonlighting jobs may reflect badly upon and endanger their day jobs. One reporter interviewed me about a phenomenon of women with daytime jobs moonlighting as strippers. I cautioned that moonlighting strippers need to think about their soon-to-be former jobs with churches, private schools and health care providers. Not all moonlighting jobs are created equal, and if that is your company’s position, let workers know that.

    The bottom line, of course, is that you do not want moonlighting to affect your operation or reputation, and it’s a good idea to communicate that belief to employees. If you want to discourage moonlighting, you might want to remind them of the current employment picture, in which employers can hire people who are willing to commit to no moonlighting.

    Here is a recap of basic moonlighting considerations:

     • Set out any policies on moonlighting, such as disclosure and preapproval.

     • Consider if letting one of your workers moonlight will violate noncompete agreements or confidentiality or trade secrets. Also consider if you are putting your organization in jeopardy by taking on a moonlighter who might have such restrictions imposed by a primary employer.

     • Determine if a worker’s moonlighting job will negatively affect your operations or your reputation. (See the teacher/stripper example above.)

     • Determine if you can save on fringe benefits or overtime wages by hiring moonlighters. Do those savings outweigh other moonlighting issues?

     • Decide if special requirements for your workers, such as around-the-clock availability, will make moonlighting impractical for them and perilous to your 24/7 business.

Workforce Management Online, October 2009 -- Register Now!

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.