NLRB Rules Company’s Moonlighting Ban is Unlawful

An NLRB administrative law judge has ruled that it is illegal for companies to ban employees from moonlighting without permission.

In the case Nicholson Terminal & Dock Co. and Steve Lavender, NLRB Administrative Law Judge Elizabeth M. Tafe ruled that the company was unlawfully maintaining a handbook rule prohibiting employees from working other jobs unless approved by a company executive. Nicholson was ordered to rescind or revise the moonlighting rule, due to the “significant potential impact” on employee rights.

Last year, the NLRB ruling in Boeing Co. changed the way the Board analyzed company rules. Tafe’s decision in Nicholson suggests that the Board will remain skeptical of policies that are worded broadly and the impact they may have on employees’ ability to exercise their concerted activity rights.

Moonlighting rules need to be specifically tailored to prohibit work for competitors or that may interfere with an employee’s ability to do the job. If you have any questions related to moonlighting rules for your handbooks, contact a member of Verrill Dana’s Labor and Employment team.