Be careful restricting workers' 2nd jobs.

Byline: ON THE JOB By Dan Grinfas For The Register-Guard

Question: We're revising our employee handbook and wondering about the possibility of including a no-moonlighting policy. What are the legal ramifications if we prohibit our employees from taking any other jobs while working for us? Can we enforce such a policy, or would we be going too far by restricting what employees do when they are off the clock?

Answer: Employer policies that prohibit moonlighting do raise some issues of privacy, fairness, and even discrimination, but in general, the courts have upheld no-moonlighting rules when they are applied uniformly and supported by some business justification.

As an employer, you are right to be cautious about regulating what your employees do on their own time, as doing so can lead to claims of invasion of privacy. However, there are many scenarios in which you can legitimately address off-duty conduct, when you can show that the conduct adversely impacts your workplace, damages your business or reputation, or affects an employee's qualifications to work for you.

For example, if your concern is that your employee will go to work for a competitor or share your client lists and proprietary information, you can enforce a noncompetition agreement, as long as you enter into it before employing the individual.

If your real concern is that a moonlighting employee will be more likely to call in sick or will be less productive at your job, sometimes the best option is to address the attendance or productivity issues if and when they arise, rather than establishing a blanket policy barring all outside employment.

Employees who want to earn extra money at a second job often view no-moonlighting rules as an unfair restraint of trade or limitation of their livelihood, so you should consider the effect on employee morale.

If you do decide to implement a policy that prohibits moonlighting, you should articulate your business reasons for the rule. These might include concerns about scheduling conflicts, employee fatigue, conflicts of interest and divided loyalties, or the need for employees to be available for on-call work and overtime.

There have been numerous litigated cases involving moonlighting policies and claims that employers use them as a pretext to discriminate against employees engaged in protected union activity. These cases often involve employers turning away job applicants who are `salts,' union employees or members seeking to enter the workplace with the goal of organizing the work force.

In some cases, the National Labor Relations Board has found that no-moonlighting rules violated the National Labor Relations Act because they were adopted with the discriminatory motivation of preventing employees from engaging in protected union activity or designed to prevent union salts, officials and sympathizers from being hired.

In other cases, the NLRB has upheld no-moonlighting rules. For instance, the agency found that an oil refinery was justified in terminating an employee who took a second job as a bartender.

Some states, including California, have laws that protect employees from discharge because of their lawful conduct that occurs during nonworking hours. Employees have used these laws to challenge no-moonlighting rules, but the courts have generally found that employees engaged in outside employment for remuneration are not protected.

Another area of litigation involves employees with medical conditions who take time off work under the Oregon Family Leave Act or the federal Family and Medical Leave Act. If you discover that such an employee has taken a second job during his or her medical leave, think twice before disciplining the employee, because in a number of cases, courts have found that despite being able to work in a second part-time or light duty job, the employee still had a qualifying serious health condition entitling him or her to 12 weeks of protected leave from the original job.

On The Job is written by attorney Dan Grinfas of the Oregon Bureau of Labor and Industries. Contact BOLI at [phone], or BOLI, 800 N.E. Oregon St. No. 32, Portland, OR 97232.