Moonlighting Ban Worded Too Broadly

Allen Smith, J.D. By Allen Smith, J.D. June 11, 2018

​When a National Labor Relations Board (NLRB) administrative law judge struck down an employer's prohibition on workers taking a second job, other businesses were put on notice: Make sure your prohibitions on moonlighting are clear and focused.

Moonlighting Policies Instead of Bans

Some employees view moonlighting bans as overregulating their off-duty time and interfering with their ability to meet their economic needs or get ahead, said Ali Edwards, chief counsel for CEDR HR Solutions, based in Tucson, Ariz. She recommended moonlighting policies instead of bans when possible. Employers might require workers to give them notice prior to accepting a second job, she suggested.

These notices could alert businesses to employees' financial difficulties that they can help with. "For a good employee, I might be able to give that person additional work [or] overtime or connect them with a colleague in the community that I know won't pose a conflict of interest with our company," she stated.

Edwards said a legally compliant moonlighting policy also should:

  • Set an expectation that the employee must first meet the demands of the current job, which may include working overtime or occasionally covering others' shifts.
  • Inform employees that they may be fired if their second job interferes with their ability to perform their current job.

Restrictions on Moonlighting

In some circumstances, restrictions on taking second jobs are in order, Edwards observed, but word the limitations so that employees understand what's prohibited and what's allowed. For example, she said a policy banning moonlighting that creates a conflict of interest with the company should include:

  • Examples of what a conflict of interest would be, such as soliciting customers from the primary employer to work with a competitor, receiving material gain from outside individuals for work produced on behalf of the company or getting a job with a direct competitor.
  • A statement that the business permits moonlighting as long as the outside work does not interfere with the employee's job performance on behalf of the company.
  • A statement that the policy is not intended and would not apply to discourage employees from participating in any protected activity.

Daniel Cohen, an attorney with Ogletree Deakins in Detroit, said a prohibition on moonlighting would be appropriate if the second job:

  • Conflicts with the worker's productivity, efficiency or availability.
  • Interferes with the employee's schedule.
  • Contributes to fatigue or other health and safety issues.
  • Exposes proprietary information to or otherwise advances the interests of a competitor.

Moonlighting rules are necessary in safety-sensitive positions and those where substantial overtime or scheduling flexibility is required, particularly on short notice, noted Ryan Vann, an attorney with Baker McKenzie in Chicago, and Jordan Faykus, an attorney with Baker McKenzie in Houston, in an e-mail to SHRM Online.

[SHRM members-only toolkit: Determining Overtime Eligibility in the United States]

But Cohen said, "The reality is that many people need to work two jobs to make ends meet. A complete ban might lead to the loss of talented individuals."

Employees are more likely to follow a moonlighting policy when it protects the legitimate interests of employers without going too far, Edwards noted.

Struck-Down Policy

In a decision handed down May 16 in Nicholson Terminal & Dock Co., an NLRB administrative law judge ruled on a moonlighting policy that barred employees from having another job that could 1) be inconsistent with the company's interests or 2) have a detrimental impact on the company's image with customers or the public.

The third part of the policy—the statement that employees could not have another job that required devoting so much time and effort that the employee's work would be adversely affected—wasn't challenged under the National Labor Relations Act (NLRA), but the first two were.

The policy required that before obtaining other employment, the worker must first get approval from the company treasurer and that any change in the additional job be reported to the treasurer.

The employer alleged that the purpose of the overall rule was safety and preventing employees from working for competitors, wrote Vann and Faykus.

While the employer articulated legitimate concerns, they didn't outweigh the employees' substantial, core NLRA rights to organize, associate and affiliate with other employees and participate in union activity on nonwork time without their employer's interference, the administrative law judge determined.

An example of a second job could be working for a union in addition to a company so that the employee can further the interests of the labor organization, such as through union organizing, noted David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis.

Vann and Faykus stated that concerns over company interests and "detrimental impact on the company's image" are both "major red flags" in the NLRA context. They cautioned that such concerns might unlawfully impede NLRA protections that let employees engage in activities that could hurt the company's image, such as:

  • Complaining of unfair labor practices.
  • Discussing workplace conditions.
  • Encouraging public support for union efforts.

"Moonlighting rules should not include references to those topics and should focus on the practical performance and security concerns that could result from moonlighting," they wrote.

Todd Lyon, an attorney with Fisher Phillips in Portland, Ore., offered a different view: Nicholson Terminal was wrongly decided. He noted that employers have a legitimate concern for their employees' safety. An employee who is moonlighting may not be getting the necessary rest between shifts to work safely. In Nicholson Terminal, for example, bargaining-unit employees load and unload cargo from barges. This is dangerous work requiring employees to be awake and alert, he observed, saying, "Any mistake caused by fatigue could be costly and, in the worst-case scenario, deadly."

But Cohen said, "The outcome in Nicholson Terminal does not spell doom for moonlighting policies but reminds employers to be careful in [their] wording."



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