You Have A Right To Moonlight

There’s no shame in wanting a little extra income.

One way to do that is to “moonlight” – earning some extra cash on the side in addition to your main job.

Yet the very fact that you are getting a second job could be a concern to your main employer.

That is because all employees owe a duty of loyalty to their employers. In other words, for as long as you are employed, you shouldn’t do anything that would be against your employer’s interests.

Yet your employer may think you will be tempted to act against their interests in some cases, say if you work for a competing business, or because the additional working hours are hindering your ability to focus on doing quality work.

Have a look at your employment agreement. Your employer may have already addressed this by including a clause that says you are not to take on another job without their permission.

But from 1 April, because of changes made to the Employment Relations Act 2000, you will be free to take on a second job, unless your employer:

  • has good reasons for thinking they need to restrict you in that way; and
  • they include the restriction and the reasons for it in your employment agreement.

REASONS TO STOP YOU WORKING ELSEWHERE

What will amount to a genuine reason for preventing you from taking on a second job?

It doesn’t mean that your employer needs to only genuinely believe they have a reason, regardless of how good that reason is.

Rather, the Act specifies certain categories of reasons that will qualify as “genuine”, which include:

  • protecting your employer’s commercially sensitive information;
  • protecting your employer’s intellectual property rights;
  • protecting your employer’s commercial reputation; or
  • preventing you from having a real conflict of interest that could not be managed without restricting you from having a second job.

The common theme to each of these reasons is that there is a real threat to the employer’s business posed by you working for someone else.

Let’s consider these reasons in more detail.

Threat to commercially sensitive information or intellectual property

The first two reasons deal with concerns that will likely only arise if you work a second job for a business that competes with your primary employer.

If you are going to work for a competitor who could make use of your employer’s commercially sensitive information or intellectual property, and potentially reduce your employer’s market share, then it seems fair that your employer be concerned to prevent that possibility.

But this would seem to only prevent you from working for other employers who pose this type of risk. Outside working for a competing business, it may be difficult for your employer to use this as a reason to stop you taking on that second job.

Threat to commercial reputation

It is not as easy to say how you might damage your employer’s commercial reputation by taking on a second job.

What it suggests is that your other employment must somehow make your main employer less credible in the marketplace, whether or not it reduces that employer’s revenues. Threats to credibility and reputation can be difficult to assess.

However, working for a second employer in a job that is inherently critical of your main employer’s business might qualify under this heading. For example, if you work for a casino, they may argue that fronting for a charity that lobbies the government to promote anti-gambling measures may be damaging to their reputation (and may also be a conflict of interest).

Conflicts of interest

The wording of the Act assumes that many conflicts of interest will be able to be managed in a way that does prevent you from taking on a second job.

Potential conflicts of interest may be managed by ensuring you do not work on certain projects or undertake particular tasks that will give rise to the conflict.

For example, you may work for a local council processing liquor licences and on the weekends manage a restaurant. You would have a clear conflict if you were to handle that restaurant’s liquor license application. Your duty of loyalty to both employers could be compromised in that case.

The council could manage the potential conflict by asking someone else to process that application, rather than preventing you from working for the restaurant altogether.

So the only conflicts of interest that will amount to a genuine reason under this new law are those that cannot be managed in any other way than by preventing you from having that second job. That is to say, the conflict of interest will need to arise by the very nature of the second job itself.

MUST HAVE CLAUSE IN AGREEMENT

It is not good enough for your employer to have genuine reasons.

Those reasons must also be expressed in your employment agreement if the restriction is to be enforceable.

In other words, your employer must state clearly what the restriction is and why the restriction is needed at all. It must also only extend to as far as necessary to give the protection that your employer thinks they need.

If the clause does not give sufficient reasons, or extends beyond what is necessary to protect your employer’s genuine interests, then it will not be regarded as forming part of your terms of employment and you will be free to moonlight as you wish.

BUT WHAT ABOUT YOUR DUTY TO BE LOYAL?

Before you head off to the recruiter, you need to keep in mind that there are duties you will continue to owe to your current employer, even if you do get a second job.

Those include the duty to act in good faith, which means you must be open and communicative with your employer about matters relating to your employment.

You also have duties not to misuse your employer’s confidential information or intellectual property, or to otherwise act in a way that would be against your employer’s interests (remember that duty of loyalty?).

And if you breach those duties, you could find yourself on the receiving end of a disciplinary process, and in the worst case, lose your main employment.

So while you might have the freedom to get that second job, you should continue to be alert to any potential conflicts that may arise.

And if you find you can’t do your duties to both employers justice, then you may want to think about whether that second job is a good idea after all.

CONCLUSION

You may have a clause in your employment agreement that says you cannot work elsewhere without your employer’s consent.

But if that is all the clause says and no more, then you are free to disregard it.

Unless your employer has good reasons for preventing you from getting a job elsewhere and expresses them in your agreement, you can go ahead and start moonlighting wherever you wish.

Just keep in mind that this does not give you a free pass to ignore your ongoing duties to your employer. You are expected to act in their best interests as far as possible.