Can you ban workers from moonlighting during FMLA leave?

It may seem crazy that your employees can use their allotted job-protected FMLA leave time to work on a second job. But, as long as they have a legitimate reason for the leave, they can use their leave any way they please.

Can you do anything about it? Thankfully, yes.

If you have a uniform policy that prohibits employees from moonlighting during any kind of leave, you can also ban people from working elsewhere during their FMLA leave.

The key point: You must apply the rule consistently. Ban moonlighting during all types of leave, not just FMLA leave.

Case in point: William, a hospital pharmacist, took leave to deal with stress problems. While out, he and another pharmacist opened a competing pharmacy operation. When the hospital found out, it fired William. He sued.

FMLA Compliance D

The hospital was able to point to long-standing rules against employees opening competing businesses and against working while out on any sort of leave.

The court sided with the hospital, saying it was free to fire William for violating established rules against competing or working while on any leave. (Harris County Hospital v. Parker, Court of Appeals of Texas)

4 rules for regulating employee moonlighting

Some employers have no problem, in general, with employees who moonlight, but still want some restrictions.

That’s why it’s wise to set a clear policy that outlines what you consider acceptable outside employment.

Here are some tips for setting a policy:

  1. Avoid blanket anti-moonlighting policies. If you need to protect trade secrets, ban outside work for competitors or require employees to get prior approval for second jobs. Have employees sign noncompete agreements.
  2. Check state laws and get legal advice on anti-moonlighting policies.
  3. Apply your moonlighting policy equally to all staff. And be equitable about how you hand out punishment for those who break the rules. Otherwise, you risk a discrimination lawsuit.
  4. Thoroughly investigate all violations of the policy. You shouldn’t fire or discipline an employee merely because you suspect him or her of behavior that’s unbecoming or in conflict with your interests. Find out exactly what’s happening before you act.