Gen Zers are embracing side hustle culture.

A recent survey [Deloitte’s 2023 survey] about work and culture found that 46% of Gen Zers and 37% of Millennials reported taking on a side job in addition to their primary employment to keep up with rising costs of living, especially in cities like Los Angeles and San Francisco.

Employers often worry about the risks associated with employee moonlighting; but is there anything they can do to prevent employees from having a side hustle? The answer is a resounding “NO” in California, where laws support the unrestrained practice of one’s trade or profession (Business and Professions Code Section § 16600) and protect an employee’s right to engage in lawful conduct outside of work (California Labor Code Section § 96(k)).

However, while employers cannot prevent employees from having side hustles, there are a few things employers can do to proactively address legitimate business concerns regarding employee moonlighting:

Address Conflict of Interest Concerns

• An employer can prohibit employees from engaging in conduct that creates a conflict of interest or the appearance of one. This means that they can prevent current employees from working for competitors, contractors, clients, vendors, etc.
• To do so, employers must ensure their Employee Handbook contains a robust “Conflict of Interest” provision to clarify and address prohibited conduct, such as:
  • Engagement in other employment during work time;
  • Use of company’s equipment or supplies for personal or other employment purposes; or
  • Employment with a competitor (with that term clearly defined and limited in scope).

Address Confidentiality Concerns

• An employer also has the right to prevent an employee from using that employer’s confidential information or trade secrets outside the scope of employment.
• To do so, employers must ensure they have a Confidentiality Agreement that clearly defines information considered confidential, proprietary, and/or trade secret, and states that all such information is property of the company.
• Plus, ensure the Employee Handbook contains a ‘Confidential Information’ policy that refers to and reinforces the more detailed Confidentiality Agreement.

Address Work Performance Concerns

• An employer is entitled to its employees’ undivided loyalty during employment. When alternate employment harms the primary employer or disrupts business, then it becomes an addressable issue. 
• A moonlighting employee can be held to the same standards regarding performance, attendance, and productivity as other employees. If they’re coming to work late, not getting their work done, not available to work the schedule they agreed to when hired, or not working up to company standards, the employer may raise those issues and issue discipline if appropriate.
• Ensure that your Employee Handbook contains clear ‘Job Performance Standards’ and/or a ‘Code of Conduct’ which includes attendance policies, guidelines for absences and tardiness, a list of prohibited conduct, etc.

Overall, while California employers cannot prevent employee moonlighting, there are ways to minimize potential risks of side hustle culture by keeping the above considerations in mind.

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