Side hustle, part-time gig, extra job, moonlighting? Call it what you want but most people between the ages of 18-35 have some kind of second job. Some need it to pay the bills, others do it because their main job isn’t fulfilling and let’s be honest, we’re all a little spoiled (wink) these days and don’t want to work strictly for cash. But just like with anything in life there are some legal things you need to think about before you run away from your boring 9-5 to pursue your side hustle full time.
Let’s take a look at the few areas you want to have in check before starting a side hustle or leaving your full-time job.
How legal is your side hustle?
I hope this goes without saying but if you’re participating in illegal activities then, your side gig is well, illegal. Don’t sell drugs kids stay in school. But what I mean by this is are there agreements in place between you and your current employer that would prevent you from doing this type of work, or are you directly competing with your current employer?
States vary on handling this issue, but for the most part, it is understood that an employer can take action against an employee that is directly competing with their employer, and no agreement is needed to enforce this. So ask yourself this question before you get started on your side hustle:
1.Is this side business related to my current job, or at least competitive with my current job?
a) If your answer is NO: If it’s a no then your side hustle is less likely to get you in trouble when you start it up, or when you leave your current job for full-time side hustling work. But to be safe, don’t do your side hustle during your 9-5, don’t use your current employer’s equipment (computer etc.), and don’t let your work product suffer. This will help reduce the risk of legal claims your boss could potentially have against you.
b) If your answer is YES: If the answer is yes, then you are taking a bigger risk with your side hustle. Even if you’re doing this all on your own time with your own equipment your employer may still have multiple claims against you. Including claiming the work you have done for your business is actually the property of theirs. You need to take extra precautions to show a clear division between your day job and your side job. Don’t take clients from your employer while you’re still working with them, and don’t utilize any time or resources belonging to your employer. The risk is different depending on your industry, where you work, and what skills you’re using in building up your side business, and there is no way to eliminate the risk of your current employer coming after you.
You’ve taken the plunge
At this point, you decided that working on your side hustle while still at your 9-5 was worth the risk. That is great, but let’s go over a few things to keep in mind while working both.
Keep good records
You’re working your little butt off because one day this extra job will be the full-time job. Keep track of your time spent working. You should only be spending your nights and weekends working on your side hustle (ahem I repeat do not work on your side hustle at your 9-5), so you will want to document your time spent, and the tasks you are doing. There are tons of programs out there that help you track time and keep records of everything you’re doing for efficiency purposes, but when it’s the side hustle it’s also for legal cya purposes. Keep track of all of your files and when they were created, modified, and saved. And don’t just keep these records while you’re working both jobs, keep them for years because you never know when that old employer is going to show up.
Use your own equipment
I stated this earlier, but under no circumstances is it ok to use equipment of your employers to work on or build your side hustle. Don’t use your work email, and don’t use your work computer unless you want your employer to read your emails and find out quick what you’re up to. Only use your personal email, phone and computer to conduct business and personal work. Your employer has every right to read your work emails and go through your computer to see what you’ve been up to when you’re supposed to be working. Operating your side hustle on this assumption will save you some major headaches down the line. And anyway, you should only be working on the side hustle on nights and weekends, remember? So completely unplug from your 9-5 when working on your side hustle.
You’re ready to leave that ole desk job
Non-Compete Agreement at Play?
After you’ve decided the risk is worth the reward and you’ve built your side hustle up to a level that makes you comfortable to leave the 9-5 there are a few things I want you to look at before putting in your two week’s notice.
Did you sign a non-compete? Non-competes and non-disclosure agreements are not the same. A non-disclosure agreement basically states that you won’t tell outsiders about your employer’s intellectual property. A non-compete is a restrictive agreement that can prevent you from working in certain geographical locations, with certain people, and in certain industries. Some states like CA have said these are illegal, other states such as FL will uphold them under certain circumstances so check with your jurisdiction to see if they’re allowed.
But, if you’re in a jurisdiction that allows for them, and you signed one it is a great idea to take that agreement to an attorney and have them review it with you before you leave your main job. You do not want to violate that agreement and give your employer a reason to bring you to court over it. This can put your business at risk.
Review your Employment agreement, offer letter, or any other document you signed
There is a chance that you didn’t sign an entire separate non-compete agreement. But, that doesn’t mean your boss didn’t sneak some kind of restrictive language into a contract that you did sign. Review any document you signed prior to, or after starting your job. Offer letters will sometimes contain non-solicitation and non-compete agreements that you didn’t notice in your excitement to get that big paycheck. If you didn’t save these documents, tactfully ask your employer for copies. It’s your right to have a copy of them so you shouldn’t have an issue. You might not want to say you’re interested in reviewing them because you’re ready to leave for your side hustle, but I am sure you can find a tactful way to request them. Finally, look for any language that might require you to tell your boss that you have a second job, or that you’ve started your own business. If that is present, then you need to have that conversation sooner rather than later because you’re under a duty to do so.
When you’re ready to tell your Boss
I know it’s going to be an awkward conversation. Hopefully by this point you’ve ensured that you don’t have any agreements in place keeping you from leaving, you weren’t under a duty to tell your boss about your side hustle to start, and you’ve built it up on your own time with your own equipment and you’re ready to take the plunge. Keep this conversation respectful and professional, don’t give your boss a reason to be upset with you. Stay strong, you’ve got this.
Go forth and conquer!
So there you have it. My best advice for starting up, working in, and going full force with your side hustle. There is never a clear-cut answer on how to deal with this, but these are some good guidelines to keep in mind when working full time toward a paycheck, and working full time toward a dream. As always, if you have questions or need help in your situation don’t hesitate to reach out to me at Shannon@montgomerypllc.com.
Please note that this is not meant to be legal advice for you or your situation, this is merely some legal research and knowledge on the given topic