Outside Employment Agreement: Everything You Need to Know
An outside employment agreement establishes company guidelines to employees engaging in outside employment which may interfere with their job responsibilities.3 min read
2. Do You Need an Employee Moonlighting Policy to Protect Your Business?
3. Creating a Moonlighting Policy
Updated November 17, 2020:
An outside employment agreement establishes company guidelines relating to employees obtaining or engaging in outside employment which may interfere with their primary job responsibilities.
Important Terms to Negotiate in Your Employment Agreement
Before signing an employment agreement, it is important to discuss job duties and obligations to ensure both parties are on the same page. During this time, many individuals forget to inquire about whether or not any outside employment is permitted. This is important because the majority of employment agreements do not allow any outside employment opportunities.
Additionally, some agreements, even prohibit an employee from participating in any activities that may take up too much time and energy. For example, if you are contemplating starting a new business or continuing a side-job that you love, it is best to consult with your employer to ensure these activities are allowed and possibly reflected in your contract.
Also, consider examining your noncompete clause. This portion of a contract may prohibit you from seeking work in the same industry after departing the company. If the clause appears too restrictive, consider asking to have the noncompete clause revised.
Do You Need an Employee Moonlighting Policy to Protect Your Business?
As an employer, if you have concerns that an employee's secondary job may interfere with the duties and responsibilities of your workplace, you may want to implement a moonlighting policy. A moonlighting policy doesn't only control outside employment but also prohibits employees from leaving your company to go work for a competitor.
When an employee engages in outside employment, it can burden your business in many ways, such as:
- Your employee's secondary job may create a conflict of interest.
- Your employee may be too tired to perform their job effectively due to working late or long hours.
- Your employee may have scheduling conflicts due to the secondary job requiring similar work hours.
- Your employee may be using work hours to perform secondary job tasks.
If you decide to implement a moonlighting policy to protect your business, it's recommended not to focus on regulating the off-duty conduct of your employees. Instead, focus on stressing that there should be no interference with your business. Specifically, emphasize the importance of an employee's performance and outline work hours. It is not advised to forbid your employees from having a second job. This is because these rules are difficult to enforce and may result in the loss of respected employees.
Creating a Moonlighting Policy
Remember, if you decide to implement a moonlighting policy, it does not have to prohibit employees from taking on other employment opportunities. However, it must be clear that having a second job cannot impact work performance in your business. Generally, moonlighting policies typically address the following factors:
- What are the conflicts of interest?
- As an employer, where do you stand on the approval of secondary job opportunities?
- What is considered interference with the primary position?
The main goal for a moonlighting policy is to set clear expectations that an employee's duties at your company should be their primary job and outside work activities should never interfere with job performance. Moonlighting policies are created to protect your business. Conflict of interest policies also helps ensure that your employees don't begin working for your competitors while simultaneously working for you.
In a conflict of interest policy, be sure to state that no employee is allowed to share their time or talent with a company or firm that is a competitor to your corporation. It should also state that employees may not disclose what has been used or learned while on the job with regards to policies, programs, and techniques.
When developing your moonlighting policy, consider including a clause stating that employees must first obtain approval before securing any outside employment. The following are two examples of moonlighting policies that contain sample language that would be appropriate for this type of clause.
- Example 1: If you are seeking part-time work with another company or firm, please consult with your supervisor before accepting the job. There may be many possible reasons to not accept another position and a potential problem may be avoided.
- Example 2: Permission to hold business interests or outside employment with another corporation or a firm that is doing business with (your business name) and its suppliers and dealers, must be secured in writing from (your business name). Failure to ensure advance permission may result in immediate termination from (your business name).
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