Is it legal to blanket prohibit outside employment?
<p>I live in Texas. Our labor laws are some of the worst. However, even here I think a blanket clause from a startup that prohibits outside employment <em>sounds</em> fishy. Researching this I found the <a href="https://www.twc.texas.gov/news/efte/tocmain2.html" rel="nofollow noreferrer">Texas Guidebook for Employees</a> which has <a href="https://www.twc.texas.gov/news/efte/conflict_of_interest.html" rel="nofollow noreferrer">this to say in Conflict of Interest</a>,</p>
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<p>It is generally inadvisable to flatly prohibit all outside employment. Many people work two or three jobs. The real concern should be with outside work that interferes with the employee's ability to be a good employee for the employer. For example, an employer may legally prohibit any outside work for a competitor of the company; that conflicts with the working hours for the company; that undercuts the company's image, mission, or goals; or that makes the employee so tired that the employee cannot function effectively in the job he or she performs for the company.</p>
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<p>That's not very good guidance though. When it says it's &quot;generally inadvisable&quot;, what's the reading of that? Does that mean the court will enforce it if it is written that way, and that this Guidebook amounts to mere morality training for employeers?</p>

<p>Most states don't expressly prohibit this, and there are some jobs where this is legitimately required.</p>
<p>On the other hand, this prohibition will generally not be implied in the absence of a clear agreement on the subject, as this is rarely the contractual understanding. It could also be struck down in a common law public policy limitation on contracts if it serves no legitimate purpose and amounts to a punitive penalty.</p>
<p>Also, under the Federal Fair Labor Standards Act (FLSA), you must be paid for time spent working unless you qualify to be a salaried worker, and such a requirement arguably triggers minimum wage and overtime requirements for time when you are available (although the regulations are quite involved on this kind of situation).</p>
<p>Colorado has a rare outlier statute protecting the right to engage in lawful away from work activity (originally enacted to protect smokers but much broader in application).</p>
<p>A small number of U.S. jurisdictions have or are considering adopting, limitations on &quot;on call&quot; time when not actually working. But, the prohibition on outside work could have other aspects to it (e.g. avoiding conflicts of interest, or complying with regulatory rest time requirements).</p>

united-states employment texas