Is it illegal to Moonlight by working a Second Job?

There’s many reasons you might want to work multiple jobs, not the least of which means additional income. There are also many forms of ‘moonlighting’ with additional work, ranging from a full-blown second job to a couple of freelancing hours a week to more passive opportunities like real estate. Let’s tackle the ways each employer may be able to restrict your ability to work elsewhere.

When can Employers prohibit Moonlighting?

The 2020 National Labor Relations Board (NLRB) case of Nicholson Terminal & Dock Company provided a national framework for when employers can lawfully prohibit moonlighting for their employees. Through their employment agreement and/or employee handbook, it is allowed for employers to prohibit moonlighting for the following cases:

1. Conflict of Interest: Your second job conflicts and potentially competes with your existing employer.

2. Company Resources: Your second job uses resources from your existing employer, such as the computer or proprietary materials.

3. Diminished Productivity: Your second job causes you to perform worse at your current job than before you took on the second job.
   
   

A special case to consider is when taking leave under the Family and Medical Leave Act (FMLA). FMLA 29 CFR § 825.216(e) states that employers have no additional rights to further restrict moonlighting during leave. They can only extend the same policy that is active for all employees and should not specifically address employees on FMLA leave.

When can Employees lawfully Moonlight?

On the flip side, there’s multiple states with laws that specific protect an employee’s right to moonlight:

1. California: Labor Code 96 (2022) has been interpreted to protect moonlighting as employers can be held liable for loss of wages from “lawful conduct occurring during nonworking hours away from the employer’s premise”.

2. Washington DC: D.C. Law 24-175 (2022) prohibits anti-moonlighting in the context of banning most non-competes.

3. Washington: Code of Washington 49.62.070 (2019) prohibits anti-moonlighting for second jobs that earn less than twice the state minimum wage, bring in supplemental income, is an independent contractor, or is for self-employment.
   
   

All of these state laws include exceptions similar to the framework provided in the mentioned NLRB ruling in that they cannot create a conflict of interest and use company resources. It should also go without saying that second jobs may not violate the law (e.g. a side hustle selling illegal drugs).

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From these laws, you can start to see cases where moonlighting is allowed and when it isn’t. If you are a project manager during the week, and work at a restaurant on weekends, that’s allowed. If you are an engineer and flip houses on the side, that works too. However, if you’re a graphic designer and use your work computer and license to design software for your own design business, that’s likely grounds for your employer to take action.

For advocacy and beyond,
The Ask Ginkgo Team