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3 Ways to Legally Address Moonlighting Employees

By Brett Snider, Esq. on December 04, 2014 | Last updated on March 21, 2019

Given the state of the economy, it isn't surprising that many employees may be working on their own side business or moonlighting when they're not on the clock.

Career Liberation Coach Andrea Shields Nunez tells The Huffington Post that in her own story of building her side business while working full time, she became increasingly disconnected and despondent. Employers can address the issue of employees who aren't engaged with their small business, but there are some legal considerations to keep in mind.

Here are three ways to legally address moonlighting employees:

1. Noncompete Agreements.

You may not want your employees to be dividing their time, energy, and focus between any employers other than you, and a "no moonlighting" policy may sound like the answer. However, without some sort of legal obligation binding them, your employees shouldn't have to limit themselves to working at your shop.

Enter noncompete agreements. Including a noncompete agreement as part of an employment contract can ensure that your employees don't work elsewhere while they're working for you, and even for a little while afterward. Noncompete agreements can even be imposed on hourly employees, but any restrictions on not working for other employers must be reasonable and based on a legitimate business interest. Simply wanting your employees not to work somewhere else isn't a legitimate business interest.

2. Flexible Moonlighting Policies.

Your business may also have a policy to allow moonlighting, as long as outside work does not interfere with the business' interests or the employee's performance. Give employees proper notice of this policy, so they don't seem shocked when their moonlighting is the subject of a negative performance review.

An employee who is constantly late or disconnected at work may be fired or disciplined, regardless of whether it is because of moonlighting.

3. Ask for Notice of Moonlighting.

It may seem counterintuitive, but your employees may benefit from their employers being aware of their moonlighting. Instead of waiting until a problem arises to find out that an employee has a second or even third job, employers can ask employees to submit notices of moonlighting once they accept another job -- just like how some companies treat dating employees.

As part of the notice, employees can agree to the terms of the office's moonlighting standards -- including discipline or review if the out-of-office side job affects that employee's performance.

For help in crafting your office's moonlighting policy, contact a business attorney in your area.

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