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Side Hustling With A Full-Time Job – 3 Legal Issues to Be Aware Of

Side hustling can be a great way to make extra money. However, if you’re not careful you could find yourself in hot water at your full-time job.

Making money on the side does you no good if you lose your main source of income because of it. Which is why it’s important to be aware of what you can and can’t do for work outside your 9-5.

When I worked at a law firm, I used to do a lot of business formation work which often involved setting the rules for employees.

So if you’re blogging on the side to your full-time job, listen up!

While I am an attorney, I am not your attorney and nothing on this website or downloads available are to be construed as creating an attorney-client relationship. Additionally, nothing in this site or resources made available are to be considered legal advice. The author is not liable for any losses or damages related to actions or failure to act related to the content in this website. If you need specific legal advice consult with an attorney who specializes in your subject matter and jurisdiction.

1. You May Not Be Able to Do The Same Kind Of Work On the Side Because of a Non-Compete Clause

Non-competes are extremely common in employment contracts.

What is a Non-Compete Clause?

A non compete clause in an employment contract means you are not allowed to provide a service or work in a job that competes with the company you currently work for. It definitely applies while you still work for the company but it can also continue to apply after you’ve left the company.

However, don’t think that just because there’s a non compete in your contract that for the rest of your life will never be able to work in that industry. For a non-compete clause to be valid they need to be time-bound and reasonable.

For example, when I worked at my old 9 to 5 I had a non compete in my contract even though I was an at-will employee. It stated that I couldn’t work for a competitor for a year after I stopped working at that current company.

When after 4 years I was laid off, they offered to waive the non compete. That way I could go to work for the other competitors if I wanted since I wasn’t choosing to leave, they were.

For example, if you’re a graphic designer by day for your full-time job and you decide to pick up some clients on the side then you could potentially be violating your non-compete. This could put your 9 to 5 job at risk as well as your side hustle.

Where to look for a Non-Compete Clause:

A non-competition clause is included in the employee contract you signed. You may not even remember signing it depending on your job. Though you should go back and look at your employment contract and see if there is a non-competition clause included. It’s typically titled, “non compete”.

What could happen if you violate your non-compete clause?

You could lose your job and put your side hustle in jeopardy. The company could sue you for violating the contract. So not only could you be out of a job but you could be responsible for damages.

2. Chances Are It’s Not Okay To Steal Clients Or Employees Due To A Non Solicitation Clause

It seems obvious, but in practice, it may not be. After all, you likely built relationships with clients and vendors, so why wouldn’t you talk to them about the services you offer outside of work?

What is a Non-Solicitation Clause?

Non-Solicitation means you’re not going to steal your company’s clients or employees. If you’re working on the side and then decide to take it full time you can’t take the company’s clients and employees with you. This is more common in some industries than in others.

Where to look for a non-solicitation clause:

Again if there’s a non-solicitation clause attached to your job, it’ll be found in your employment contract. I cannot stress enough how important it is to reader employment contract before you sign it but especially if you’re looking to start a side hustle.

What could happen if you violate a non-solicitation clause?

If it’s an enforceable non-solicitation agreement the requirements of which can vary (this is why it’s important to talk to an attorney where you’re located) then you’ll likely first receive a cease and desist letter. However, you could face additional legal action.

3. You Can’t Go Spilling Work Secrets

You may not realize just how much confidential information you encounter at work, but it’s pretty common.

What is a Non-Disclosure Agreement?

A non-disclosure agreement is often referred to as an NDA. It is about keeping confidential information that is shared with you in the process of doing some kind of work, confidential. 

For example, many times actors have to sign NDAs as part of their contracts so that they don’t reveal the plot of the show or movie. They likely even have to sign an NDA when they get the script, before being hired. 

You might be wondering how this could apply to a side hustle?

Well you can’t use confidential information you learn at work in your side hustle. For example, maybe you are a blogger and you work for a retail company. You can’t let your email list know about an upcoming sale that hasn’t been announced publicly. 

Where to look for a non-disclosure agreement?

An NDA is usually included in employment contracts but it could be a separate document. 

What could happen if you violate an NDA?

Your employer could sue you for damages based on your breaking the agreement.

Continuing with our actor example, if anyone in the Game of Thrones cast had spilled the beans before the final season, many people may not have bothered to watch or even subscribe to HBO. HBO could go after those actors for money they lost.

Bottom Line

As you can see, there are several different issues that can come up when you side hustle in addition to your full-time job. 

Some are easy to overcome or avoid like non-solicitation and non-disclosure, but others, like non-compete clauses, should be paid close attention to.

Did you know about these issues? Let me know in the comments!

Related: What to Do After You’ve Officially Launched Your Business

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