May 3, 2018

How are you dealing with a no moonlighting clause from your employer?

I have signed a typical no moonlighting/IP rights clause with my employer. Because of this, I try to be quiet and anonymous about my side projects but this really holds me back for things like building an audience, marketing, github contributions etc. How are others handling this issue?

  1. 14

    Some advice for other people who have not yet signed moonlighting clauses.

    Demand compensation over and above your salary in return for accepting the clause. If your employer seeks to control your time outside work, then he should be prepared to pay for it.

    Moonlight clauses are a try-on. Your contract covers your working hours and that is what you are paid for. Anything over and above that needs to be compensated for separately, if you are prepared to accept the restriction at all.

    And if your potential employer refuses, walk away.

    By the way, in UK law at least, a contract is not valid if there is not “consideration” on both sides or if the Court deems the contract was not made between two parties of equal negotiating power.

    I believe such contracts are also contestable under "constraint of trade" legislation in many countries.

    1. 6

      Great advice.

      Adding on to it, don't be afraid to cross out clauses in a contract too. Just draw a line through them and initial. I've had it questioned by executives when I've done this but never challenged. I do it for all moonlighting, IP assignment and non-compete clauses.

      Consideration is a thing in all common-law countries and the US as well(My wife is a commercial lawyer so it's a term heard in our household a lot lol).

    2. 2

      That's all good advice.

      Something I'd point out though is that you probably won't be fired for 'moonlighting' as such. Instead, you're much more likely to be fired for 'poor performance due in part to the negative effect moonlighting had on your job performance.' Or similar.

      Make no mistake, if your employer has made it clear to you that they don't want you moonlighting, then you will (probably) be fired if you insist on doing so.

      Which IMO is sort of fair enough if you knew their policy upfront.

      1. 1

        You could probably sue them for constructive dismissal - at least in the UK - if they tried to pull a stunt like that.

        Also, it makes sense to keep records of all compliments, appraisals etc. so that you could prove your work was of at least a satisfactory standard until your moonlighting was discovered!

        Give the buggers a hard time!

        1. 2

          I'm not sure where you got this idea, but the only way you could claim constructive dismissal is if your employer, having learned about your profitable side business, forced you to change your employment contract in order to obtain that IP going forward.

          If you signed the contract at the beginning of your employment, there is no constructive dismissal claim to be made.

          1. 1

            You've misunderstood the point I was trying to make.

            If you sign an unenforceable contract, a contract which has no legal validity, then, in the UK and much of Europe, any attempt to fire you for moonlighting would be an act of constructive dismissal, assuming that your work was in all other respects up to scratch.

            The reason for this, at least in the UK, is that our employment tribunals would take the view that:

            1. The employer had no business insisting on an unlawful contract term in the first place.

            2. That unlawful contract terms cannot, by definition, be enforced by an employer.

            3. That, if there was a clear causal chain between the discovery of the moonlighting and the dismissal, then it would be obvious to the employment tribunal that the employer was effectively enforcing an unlawful contract term which, by definition, it is illegal for him to do. Therefore, the employer has effectively dismissed the employee unlawfully and the employer would need to pay compensation to that employee for acting outside the law towards him.

            I doubt he would get his job back. I doubt even more that he would want it back given what would by then be a highly toxic working environment. However, the point is that employers cannot insist on unlawful contract terms without any consequence to themselves. They rely on submissiveness, acquiesence or ignorance of the law on the part of employees in order to frighten them into compliance.

            In jurisdictions or professions (e.g. military) where anti-moonlighting clauses are legal, none of the above applies. In other cases, however, the employer only has it his own way if you allow him to do so.

            Ultimately, as an employee, you should never define yourself as the job you do. The only person who will ever look after your best interests is you. You owe your employer nothing except an honest exchange of high quality labour for the agreed number of hours in return for your salary. That is why you sign a contract. You are a supplier and your employer is a customer for your labour. Oddly, many people feel the relationship is the other way around.

            1. 1

              Ok, I think you're getting constructive dismissal (your employer trying to get you to quit) and unfair dismissal.

              It's important to remember that in the UK, it's incredibly difficult to bring an unfair dismissal claim to tribunal unless you've been employed (continuously) for more than 2 years, so relying on that to fight a dismissal on moonlighting grounds is very risky.

              The solution here is, as you alluded to earlier, to negotiate those clauses out of your contract at the beginning.

              1. 1

                I stand corrected! I did mean unfair dismissal.

                That comes of commenting whilst the mind is still sub-consciously wrestling with project issues!

                Having said that, I do know of two people who have successfully won unfair dismissal cases so it is not entirely impossible! As ever, documenting everything you can is an enormous aid to success although our legal system can be somewhat perverse in its reasonings.

  2. 5

    First of all, you should read so that you understand why your employer has that clause in your contract.

    And the way to handle is it by telling your manager that you want to work on a new business in your spare time and you need them to sign a contract that forfeits any claim they might have over IP related to that business, based on the conditions that your new business is not going to be a competitor, will not interfere with your commitments as an employee, and there will be no transfer of their IP to your business.

    There are employers out there who are happy to sign these in order to keep good employees around.

  3. 5

    I would focus on building an audience. Provide something of value to the world for free. That won't violate any moonlighting clause I've ever encountered, and best of all there's no tax on goodwill.

    Simultaneously, make sure you're building your market value and your employability so you can either renegotiate the rules of your current employment or avoid such inhumane clauses in your next job contract.

    After making your move, give it a few months so it's clear there was no overlap and then release a paid offering to your audience. All the trust and authority you've built up through what you've been doing for free will pay dividends in the long run.

    1. 2

      I like this approach, I’ll just have to be careful about what I talk about, E.g., not referring to “xyz project I’m building”

  4. 4

    I have had these taken out before by saying that I was worried that the terms would prevent me from making open source contributions and improving my skills (which was true but I just wanted it removed anyway). Framing it in terms of benefits for the employer helps.

  5. 4

    I would not or could not sign a contract with that clause in it. My previous job didn't have one but a few years in I found out my old boss really looked down on it and it kind of made me feel very uneasy after I knew that.

    1. 3

      I’m pretty sure my employer would not legally enforce the clause. I’m not working on anything related to their business, but I do think they would frown upon it. Even so, lately I’ve been thinking “screw it, they don’t own me”.

      1. 2


        An employment contract is a contract for hours agreed between you and your employer. What you do outside your hours of employment, so long as it is nothing designed to harm your employer, is actually none of their business - even if they try to tell you otherwise.

        The difference between an employee and a slave is that one freely contracts his time and the other has his time owned.

    2. 2

      I actually used that as my negotiation point for my current role (and previous one). I knew that pushing for more money wasn't really going to fly due to the nature of the org, so my terms were less hours and executive sign off on working on things outside my hours.

  6. 3

    If you're in California, these clauses are legally unenforceable. Always be sure to do any such work on your own equipment to avoid any risk (separate laptop, service accounts, workspace).

  7. 2

    I am so glad you raised this. I have been thinking a lot about it. I have always spoken to my employer and signed the things I need to sign.

    In your case, I think this will really hold you back from putting effort into your business. you will have an excuse not to work.

    I suggest looking for other work, if that's a thing. Perhaps be open to your employ about that too. They may change the terms if they like you.

    Lying about moonlighting is the worst thing you can do. If you are caught, they may be able to claim your IP.

  8. 2

    Become unemployed, then build and launch product in 6 months, then get a new job. You'll feel legally invulnerable and you'll won't worry about stuff like this. Your new employer will have no claim to your business or IP before he employed you and his claims on your weekend work will be doubtful (and his claim would be limited to that weekend work, not to the entire business). Even if you did everything wrong with your new employer (didn't disclose, signed and violated a draconian agreement), your new employer would have little recourse except firing you.

    Personally, I think starting a business (V1) is difficult/impossible by moonlighting but V1.5+ are completely doable by moonlighting.

  9. 2

    Find a new employer...

  10. 1

    I know it's not what you want to hear, but this one's pretty simple for me...

    If you sign a contract, honour it (at the very least to the full extent it is legally enforceable).

    1. 1

      I agree and get a different job. Such a scammy clause, wow.

  11. 1

    To answer your question, do everything in the name of one of your parents or a sibling - with permission, of course!

    1. 1

      I say this is bad advice. I would rather be transparent, and if you have to, get another job. What if you lie and they find out and take yo to / your sudo owner to court.

      1. 1

        The point - as has been made by a number of people on here - is that, in many jurisdictions, such employment clauses at unenforceable at law.

        An employer who, knowing the law, still tries to stiff an employee with such a clause does not deserve your respect. There is no compelling moral reason why you should allow a bully to bully you.

        So what if the emplyer finds out and threatens to sue you? If you work in a jurisdiction where such clauses are illegal, you will probably find that the entire contract is illegal by virtue of that clause and that the employer does not have a legal leg to stand on.

        You should obviously check the law in your own country or state but, for example, here in the UK it is illegal to contract for something that is against the law even if both sides consent. To give an extreme example, if I contracted with you to buy your child and sell him or her into sex slavery, there is not a single country in the developed world where I could sue you for breach of contract if you took my money and refused to hand over your child. Can you imagine the argument I would present at Coury?

        Some employers are scummy. Some employers push the law to breaking point and even a little beyond. Some employers take unfair advantage of the negotiating position of employees, especially the relatively young and naive.

        You don't owe such people any respect and you would be amazed at what can happen if you call their bluff when they threaten you.

        1. 1

          Ok. If it is illegal, then sure, do what you like. I agree with you on that front.

          However if it is not illegal, I don't think it is ever a good idea to deceive your employer if you have signed a contract saying your won;t moonlight. The reason, they could claim ownership over your IP. This is also why, as others have said, it is never a good idea to moonlight while at work or with work resources.

          1. 1

            I agree with you on that!

            You should never use work resources to advance your own cause without explicit, written permission to do so whether there are illegal clauses in your contract or not. That is just asking for trouble.

            And if the contrct term is legal then, as you say, you are stuck with it. The only advice then is to get out of that job and into a better one and not make the same mistake twice.

    2. 1

      what about spouse?

      1. 1

        Okay - "or your spouse"!

        Or your boyfriend / girlfriend / significant other / partner / person you like to hang around with.

        Or your dog or cat ... no: probably not the cat. Dogs are loyal animals but cats, for all their enchanting traits, are not known for their unswerving devotion to the people with whom they deign to share a house.

        1. 2

          I asked because in some countries your and your spouses belongings considered together by law.

          1. 1

            Ah, I see!

            I think an employer would have a hard time imposing a moonlighting clause on an employee's spouse. I can't think of a single western country where it would be acceptable to impose conditions on someone who is not working for you or receiving any consideration from you.

  12. 1

    I've never signed a contract with clauses I couldn't agree to. I've requested changes to almost every employment contract I've ever signed. Most people are happy to accommodate a change.

    In your situation you either remain anonymous, invent a false persona, or risk your employer discovering that you are directly violating your employment contract and lose your job.

    1. 1

      I’ve thought about the false persona, but it feels like it would come back to bite me some day. If I can get a little traction on a side project, I plan on asking to become a part time contractor and removing that clause.

      1. 1

        When is your next pay review?

        Pay reviews are essentially contract negotiations so your next review is an obvious time to raise the matter. After all, your employer is going to tell you what he thinks of your achievements in the past 12 months but the process is a two way one, not just top to bottom.