"At will" employees can generally be let go for any reason.
In California, though, there is a statute saying if the reason is because the employee was moonlighting on a second job during non-working hours, the reason is often unlawful. California permits most employees to claim lost wages and to sue if they are demoted, suspended, discharged, or discriminated against because they hold a lawful second job. Employees have the right to be reinstated if the law is violated, and it can be a crime for the employer to refuse to reinstate an employee.
There is one case construing this statute, however, and it severely limited circumstances where it will apply.
The Second Job Must Be Legal
The moonlighting must involve lawful conduct. This means an employee can still be terminated if at night they operate an illegal gambling operation.
The Second Job Must Be Worked During Non-Working Hours
The moonlighting must also occur during non-working hours. If a second job interferes with the employee's ability to perform their primary job, the employee can still be disciplined or discharged for tardiness or poor work performance.
Conflict of Interest Employment Policies
Many employers have conflict of interest policies. Such policies are only valid if an employee's second job would actually and directly conflict with the employer's essential enterprise-related interests, and if there would be a substantial disruption of the employer's business operations. Additionally, the law requires that the employer obtain the written agreement from each employee before the conflict of interest exception can apply.
The importance of this limited exception is that an employer may not be able to prevent an employee from working a second job that directly competes with their job. However, the employee could possibly be found liable for breaching his or duty of loyalty to their employer, and the employee is still not permitted to use or divulge confidential information or trade secrets.
Exceptions To The Moonlighting Restrictions
Other exceptions apply generally to state or local law enforcement agencies, non-profit corporations, and religious organizations.
California Court Ruling
A California appellate court has held the moonlighting protections only apply if the employee is exercising recognized constitutional rights which are also protected by the California labor code.
There is no analysis of what that includes, but it most likely eviscerates much of the statute's moonlighting protections.
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