Working a Second Job: Balancing “Moon Lighting” with Primary Employment
As Ontario employment lawyer, we are often consulted by both employers and employees regarding issues of an employee “moonlighting” or “side hustle”, or simultaneously working a second job involving two different employers. Most often, we encounter this issue at the commencement of an employee’s new job, especially when we are hired to draft an employment contract or review employment contract.
In practice, most employers are generally accepting of an employee’s decision to hold simultaneous jobs, although with the caveat that the employee is not working in a role that is competitive or creates a conflict of interest. Granted, the term “conflict of interest” is very broad (and rightfully so), and it can encompass a financial interest, a conflict in terms of working hours, or in terms of the ability to perform their responsibilities without any issues. In other words, most employers will take no issues with employees holding a side hustle if it does not impact the individual’s job performance and the company’s best interests.
In most comprehensive employment contract reviews, we will typically find an “exclusivity of employment” clause (or something of that sort), which requires an employee to prioritize their employer’s interests and fulfill their work responsibilities during normal working hours. Therefore, any outside work is evaluated based on these criteria to ensure it aligns with the employer’s expectations, and an employer reserves the right to consent or refuse an employee’s request to hold a second job simultaneously.
But what happens if an employer refuses to consent to an employee working a second job? Better yet, what happens if an employer finds out the employee has, all along, worked in another job that is not even competitive? Does the employer have a good reason to fire the employee “for cause,” without any prior notice of termination or a severance package?
As illustrated in the following case from B.C., the answer is “yes,” in certain circumstances.
Example of Just Cause Dismissal for an Employee Working a Second Job: Dove v. Destiny Media Technologies Inc. (2023 BCSC 1032)
Facts
In the legal case Dove v. Destiny Media Technologies Inc. (2023 BCSC 1032), the employee worked full-time for a technology company. Her performance declined due to her involvement in outside business activities. Over several months, she spent at least 3-4 hours per week on her side job during regular office hours. This led to missed deadlines, excessive absenteeism, policy violations, and delayed responses. Although there was no written employment contract, the employer had a workplace policy called a “Code of Conduct” prohibiting conflicts of interest. Before terminating her, the employer conducted an investigation, which served as a warning. The employee, however, refused to participate in the investigation (a factor the court took into consideration in its decision).
Decision
The court ruled that the employer had valid “just cause” for terminating an employee. The employee had engaged in moonlighting during regular business hours without authorization. The court emphasized that employees have an implied legal obligation under common law to provide full-time service to their employer, unless otherwise agreed in an employment contract. Working for outside business during business hours without approval can be a basis for dismissal. In this case, moonlighting compromised the employee’s ability to perform their duties effectively. While the distraction was significant, it didn’t amount to a second full-time commitment. However, this ruling underscores that unauthorized moonlighting or working a second job during regular works hours can be grounds for discipline or dismissal, depending on the circumstances and relevant workplace rules or policies.
The court relied on the following “culmination of findings and factors” to determine the employer had just cause dismissal:
a) the volume of emails (and time stamps on the same) indicated the employee was performing substantial work on her other business during regular business hours without prior approval from management. In fact, her other job negatively impacted her ability to do her job for her main employer, as she failed to respond to emails in a timely manner or complete routine tasks (while nonetheless being able to attend promptly to the other job).
b) The employee’s work was broad-reaching across the other company’s operations;
c) The employee’s work impacted her ability to stay current with her regular job;
d) The employee requested that a colleague help her with a task related to her other job. Even if the employee suggested that the work be done outside of work hours, she would likely have perceived this as an order given the employee’s position and their close relationship;
e) The employee overstated her inability to stay on top of emails to her internal company email address, particularly as she was able to:
i. respond promptly to the company’s emails before beginning work for her other job;
ii. respond promptly to the other company’s emails after beginning work for her other job; and
iii. filter her other job’s emails
f) The employee’s suggestion that she was fitting her other job responsibilities in and around a full work commitment to her main employer is belied by the fact that, if she had extra time to devote voluntarily to her other job, she should clearly have also been able to:
i. respond to the Board of Directors’ request for the Business Plan;
ii. complete the timesheet approvals for her subordinate; and
iii. deliver her vacation and credit card documentation in a timely fashion.
g) she sent an email that clearly reflects that she was not able to stay on top of both jobs at once. She, herself, recognized that she was struggling, but was only being paid for one of the jobs and that position should have received priority.
In these circumstances, the court found that the employer justified a termination for just cause because the employee’s behaviour was seriously incompatible with her duties to the main employer. Her conduct which goes to the root of the contract, and fundamentally strikes at the heart of the employment relationship.
In fact, after carefully examining surrounding the alleged misconduct and the degree of misconduct by taking a contextual approach, including the type of misconduct and its possible consequences, the circumstances surrounding the misconduct, the nature of the particular employment contract, and the status of the employee, and proportionality, it was reasonable to conclude that the employee’s dishonesty gave rise to a breakdown in the employment relationship.
Takeaway
As this case demonstrates, while not every employee is a “fiduciary,” all employees owe their employer a duty of loyalty, fidelity and good faith. This duty can include, among other things:
- not to compete with the employer during employment by starting a competing business while still employed
- not to disclose or use confidential information
- not to engage in a course of conduct to entice business away from his or her employer
- provide full-time service and not working a second job unless their employer otherwise agrees
As a prudent business practice, Ontario employers are generally advised to establish employment contracts and policies that clearly outline expectations related to “moonlighting” (or holding simultaneous jobs) as potentially consisting a conflict of interest that could result in termination of employment. One avenue to address this is to require employees to disclose all relevant external activities as part of their employment terms to help identify potential conflicts (or any intention to work simultaneous jobs).
A termination clause in employment contract is typically a a source of confusion and disagreement among employers, employees and employment lawyers, and it is crucial to review an employment contract with a qualified employment lawyer. If you are an employer or employee needing to speak with an experienced Ontario wrongful dismissal lawyer to discuss your options and next steps on how to deal with workplace issues, call Bune Law, employment law firm in Toronto. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.