In a firm move against ‘moonlighting’, tech giant Wipro has recently terminated contracts with 300 employees that were caught working for the company’s competitors at the same time. When questioned about his decision, Chairman Rishad Premji defended the move by citing that moonlighting is ‘a complete violation of integrity in its deepest form’ and that the company will not tolerate those who decide to work for rivals whilst being active employees at Wipro.

The decision has added fuel to an already heated debate regarding the practice with many left divided on their stance. For employers, choosing one side when it comes to their company’s position on moonlighting is not only difficult but also impractical because each case has important contextual details that need to be considered. Whilst the act is indeed capable of great detriment to a company, this is highly dependent on the form of moonlighting itself and the presence of a conflict of interest. 

There is clearly a fine line to tread when it comes to the ethics surrounding moonlighting and both employees and employers need to have a solid understanding of the expectations of their roles and their contractual agreements to avoid situations like that at Wipro. By exploring some of its key elements, this article will provide a guide to employers seeking to understand when and why moonlighting can be acceptable, when they should be worried and how a dedicated policy can help protect the organisation.

What is moonlighting?

Over the last decade, the notion of a “side hustle” has grown increasingly prominent, particularly with the advent of the gig economy which has enabled employees to seek additional income from the comfort of their homes through varying online platforms.

The term moonlighting refers to when individuals work more than one role and this typically involves one full-time job (for which the employee works the standard 9-5) and a second job they work outside those hours (hence coining the term ‘moon’-lighting), often without their primary employer knowing. However, the term can also be generally applied to any situation in which an individual is working at more than one organisation simultaneously.

There are a number of reasons why an employee may decide to moonlight, including:

  • Increasing financial income: This is the primary and most common reason behind moonlighting. An employee’s salary may not be sufficient for their financial needs or goals, incentivising them to seek additional income.
  • Progressing their career: Having a second job can help employees fast-track their careers by allowing them to build up their experience in varying roles simultaneously.
  • Growing their skillset: An employee’s long-term career goals may not align with the opportunities currently present at their primary workplace and having a second job allows them to gain specific skills they want to add to their repertoire for the future.

When is moonlighting a problem?

There are two main ways moonlighting can become a source of conflict between employees and employers and translate into a legal issue:

1. Negatively impacted work performance

Working an additional job can have a harmful knock-on effect on an employee’s performance at their main employer. For example, if they are working late into the night and then coming in the next day, fatigue can impact productivity and the quality of their output. Over time as the employee continues to try and hold down two roles, this effect can compound into work performance that is generally dissatisfactory, creates losses for the business, and can be demotivating for the employee themselves.

Additionally, beyond fatigue, an employee’s work performance may suffer because of the additional responsibilities they have acquired through their other job. For example, the number of hours they’re available or can dedicate to the company may decrease and the time they do spend at work can be superseded by distractions from tasks associated with their other role, reducing their overall on-job productivity.

2. Conflict of interest

Potentially, the greatest risk to an employer from a worker’s moonlighting is if their choice of secondary work poses a conflict of interest with the company. One way this can occur is through employees working for competitors as in the Wipro case, where an employee’s knowledge of confidential information, trade secrets, client lists and company processes can compromise the entire organisation if they intentionally or mistakenly reveal this information to the rival.

Another way a conflict of interest can arise is if the employee attempts to use their skills to steal business from their primary employer either for their own purposes or to divert them to their secondary employer; for example, by incentivising clients of the business to change loyalties with cheaper rates for the same service. This is detrimental to the employer’s financial and business interests and hence can create cause for legal action against the employee.

Additionally, employees may use company resources and assets for their second job which not only poses a conflict of interest but also harms the company’s operating expenses. This could include an employee using company-provided goods such as a work car, mobile phone or computer for purposes not related to their intended function.

Do you need a moonlighting policy?

In most cases, getting a second job that doesn’t infringe upon either the employer’s financial or business interests, doesn’t go against an employee’s contractual commitment to the company. As long as the factors discussed above, work performance and a conflict of interest, are not posing an issue, most moonlighting situations work out adequately between employer and employee. For example, an employee working two retail jobs simultaneously is unlikely to be a source of conflict as long as they maintain their standard of work for both roles.

However, if there is a clear and evidenced negative impact, having a moonlighting policy as an employer can be very helpful in protecting against potential consequences for the organisation. Having a moonlighting clause included within the employee contract that makes it clear engaging in any paid work outside of their current role is prohibited without the employer’s knowledge and consent becomes very helpful when suspicions of moonlighting arise. It allows the employer to set out potential courses of action they can take when this occurs, including the employee’s dismissal and contract termination.

This type of policy is only legally viable and enforceable when the prohibition on a second job is reasonable in the sense that it only applies to situations where the business interests of the employer are at risk. Its inclusion can work to keep both employers and employees happy by enabling the latter to hold second jobs in cases where there is no conflict of interest and/or impact on work output.

Hence, moonlighting can be a tricky area to navigate for employers due to its ethics being so dependent on the specific type of work the employee engages in, who it’s with and its impact on their overall work performance. However, moonlighting is not an inherently negative course of action and employees should not have to be prohibited from undertaking it as long as they are able to meet the expectations of their current role consistently.

A moonlighting policy can help protect employers from moonlighting cases that pose harm to the company whilst simultaneously enabling employees to acquire secondary work in a form and manner that is risk-free to the company.