Can a company prohibit “moonlighting” by employees?

In most states company anti-moonlighting policies are almost unenforceable if the employee is doing the extra work outside of normal working hours. This assumes the extra work or business is not in direct competition with the original job. If the outside work is degrading the employee’s performance, discipline can be based on performance but proper documentation is a good prerequisite. Most companies have eliminated anti-moonlighting policies from their manuals because they were unenforceable.

Even if an employee is selling additional products alongside a company’s products it is hard to prove how much time is spent on one or the other. Company policy should be specific about the hours and times that an employee must sell the company’s products exclusively. In commissioned-only sales positions even this may be unenforceable.

Discipline or termination must be based on performance issues (ignoring the outside business) or legal vulnerabilities might arise.

Hope that helps you out. =)

A note about HR laws:
Laws concerning employee treatment, benefits, hiring and firing…etc are multi-level. What this means is that there are Federal laws, state laws and sometimes local regulations that have jurisdiction over an employee. The information presented here should not be considered legal advice. Ultimately, employers with serious legal questions should consult local attorneys with expertise in worker relations.
The questions and answers presented here are based on research and data from internet sources and should not be considered the final word.

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