Employers often have the ability to restrict employees from working a second job or starting a side business.
By Lisa Guerin, J.D. ● UC Berkeley School of Law
Updated 10/03/2023
Nolo was born in 1971 as a publisher of self-help legal books. Guided by the motto “law for all,” our attorney authors and editors have been explaining the law to everyday people ever since. Learn more about our history and our editorial standards.
Each article that we publish has been written or reviewed by one of our editors, who together have over 100 years of experience practicing law. We strive to keep our information current as laws change. Learn more about our editorial standards.
There's a good chance your employer can legally fire you for working a second job or even an occasional side hustle.
Plenty of employees work second or even third jobs to make ends meet or explore other career options. Even if you don't work for another employer, you might have your own side business, such as freelance writing or consulting work.
Working as much as you can to earn as much money as possible might seem like the epitome of American capitalism. But, believe it or not, working a second job can sometimes put your other job at risk.
We explain the rules below.
Are You an At-Will Employee?
Unless you have an employment contract that limits your employer's right to fire you, you are most likely an at-will employee. (Montana employees are the exception, as it's the only state that protects employees from being fired without cause.)
An at-will employee can be fired at any time, as long as the reason isn't illegal. Your employer can't fire you because of your race or in retaliation for reporting unsafe working conditions, for example.
Off-Duty Conduct Laws
Some states have laws that prohibit employers from taking action against employees based on their legal off-duty conduct. The language and protections offered by these laws vary from state to state. Some apply only to an employee's use of legal products, such as tobacco. Others apply more broadly to any legal activities.
Depending on the circ*mstances, an off-duty conduct law might limit your employer's right to fire you for working a second job, unless it conflicts with or affects your work.
However, many states do not have broad off-duty conduct laws. If you work in one of these states, then your employer is probably free to fire you for working a second job.
Why Employers Care About Second Jobs
Of course, most employers don't fire employees on a whim. It makes no sense to get rid of workers who are doing a good job, and it costs time and money to hire and train replacements. So why would an employer want to fire you for moonlighting?
Employer concerns about moonlighting generally fall into these categories:
- Conflict of interest. If you have another job in the same field, your employer might be concerned that you are sharing trade secrets with a competitor or competing with the employer for business. If, for example, you work for a test preparation company during the day and run your own side business providing individual test coaching, your employer might think that you're taking customers away from the company—and using your job with the company to build a client list.
- Performance and productivity. There are only so many hours in the day, and some employers worry that an employee who is working 60 or 70 hours a week simply won't have the energy and focus the job requires. If you are showing up for work tired, late, or unprepared, then your second job might be affecting your first.
- Use of company resources. Employers won't want you using your work computer, phone, company car, or other company property for your second job, or spending work hours on other projects.
Company Policies on Working Second Jobs
For these reasons, some companies have adopted policies about moonlighting. For example, a company might prohibit working second jobs altogether. Or, a company might require employees to report any outside work to their manager or the human resources department, so the company can decide whether to allow the second job.
Some companies take a more limited approach by prohibiting only outside work that poses a conflict of interest or competes with the company.
If you have signed a noncompete contract with your employer, that might also limit your right to moonlight, especially for competing companies. A few states (including California) don't allow noncompete contracts. In most states, however, a court will hold you to the terms of a reasonable noncompete, including a promise not to start or work for a competing company.
Contact an Employment Lawyer
If you believe you were unfairly fired for working a second job, you should talk to an experienced employment attorney. If your second job competes with your first job or creates a conflict of interest, you likely don't have a good claim.
Otherwise, however, you might have legal grounds for a lawsuit, especially if your state has an off-duty conduct law or if you were treated differently from other employees. If, for example, men were routinely allowed to work second jobs but women were fired for it, you might have a gender discrimination claim.
A lawyer can help you sift through the facts and figure out your legal options.
