When should your employees be allowed to moonlight?

For the past few weeks, you notice that your star employee, Jennifer, consistently arrives late, bleary-eyed from lack of sleep. When you approach her, she admits to taking a second job that requires late shifts. You’re not happy about what that means for your morning patients—so, what can you do about it?

Dealing with a moonlighting worker can be a complicated situation for an employer. While you empathize with your employee’s financial needs or other ambitions, you also have a healthcare practice to run. But before making a rash decision that you may regret, you’ll need to know the legal ramifications of banning an employee from holding a second job.

According to the Bureau of Labor Statistics, moonlighting is fairly common in US workplaces. In 2013, about 5% of the total workforce, or 6.8 million workers, held multiple jobs in the US, and this number has risen to above 8 million (or slightly under when seasonally adjusted) by fall of 2016. Moonlighting isn’t usually ideal for the employee or their employers. Despite that fact, businesses should be careful about “no moonlighting” policies that attempt to regulate an employee’s off-duty activities.

Here’s what a sound moonlighting policy should include

If you plan to implement a moonlighting policy for your practice, keep in mind that your policies themselves can’t prevent employees from working at another business. As an employer, you have very little ability to dictate what your employees can and cannot do during their off hours. Instead, you can set expectations as to what employees need to do if they want to remain employed with you.

A good, legally compliant moonlighting policy should do the following:

  • Require employees to inform management if they want to seek outside employment.
  • Set an expectation that the employee must first meet the demands of their current job, which may include working overtime or occasionally covering shifts for others.
  • Inform employees that their employment may be terminated if they fail to request permission first, or if their second job interferes with their ability to perform the duties of their current job.

Note that nothing in this policy prevents an employee from taking a job with another company, but merely informs the employee of what they’ll need to do to retain their position with your company. This isn’t just a semantic difference, either. A policy that explicitly prevents employees from holding outside employment isn’t a moonlighting policy, it’s an attempt to impose a non-compete agreement, which is not at all enforceable as a handbook policy.

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Non-competes are different from moonlighting policies

All in all, non-compete agreements are much more complicated than a moonlighting policy or any other handbook policy. First, a non-compete must be in a formal legally enforceable contract, drafted by a legal expert.

Second, non-competes are generally not enforceable against entry-level or blue-collar employees. The laws favor an employee’s right to work in their chosen field. When the person in question is a high-level executive or a professional with more options, it becomes a bit easier to restrict unfair competition.

Finally, and even more importantly, some states—like California—prohibit non-competes altogether. So, as always, it’s critical to know what is and isn’t OK in your state.

Your best bet is to consult with an expert if you feel you need to protect your practice by limiting employees’ right to work elsewhere, whether during or after employment.

Be consistent when handling moonlighting requests

Assuming your moonlighting policy is legally sound, you’ll also need to make sure it is enforced in a way that’s fair and consistent. If an employee requests permission to take a second job, you should consider several things before you decide whether to try and prevent it:

  • Does the employee present a conflict of interest by working at both jobs?
  • Is the employee likely to spend time on the clock at your practice doing work for their other job?
  • Is the employee planning to work so many hours that they will simply get burned out and suffer a drop in performance?
  • How have you treated similar requests by other employees?

If there is a real likelihood of the employee’s performance suffering after taking a second job, you would be well within your rights to deny the request, or to ask the employee to modify their duties at the second job. You can use common sense here: If someone who works the morning shift at your practice wants to take a second job bartending until 2 a.m., you may want to think twice before allowing it.

On the other hand, if the employee is more than likely able to handle both jobs without issue, you should probably allow them to keep both. Most employees who moonlight do so for economic reasons, so refusing reasonable requests to work a second job could result in the loss of an otherwise great worker.

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The HR takeaway here: Consider all angles, then focus on the impact.

Like any situation that requires managerial discretion, it’s important that you handle moonlighting requests consistently. An employee who asks for permission to hold outside employment probably isn’t doing so lightly. If the request is denied, the employee in question won’t be very happy about it. And if your decision gives the appearance of favoritism, or treats someone differently based on gender, race, national origin, etc., this can turn into a discrimination claim. Base your decisions on how the second job will affect the employee’s primary position with you, and you should be fine.


Dec 15, 2016

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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