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Dealing with side hustles: What employers can do when a second job interferes

In a recent case out of British Columbia, a court ruled that an employer had “just cause” to dismiss an employee whose second job had interfered with her ability to perform her daily duties for her original employer.

The plaintiff had been employed by the defendant, Destiny Media Technologies Inc., on a full-time basis for about eight years. Her job duties as a “List Manager” for Destiny included overseeing and managing Destiny’s list management service.

Sometime in 2016, the plaintiff began working a second job for a café and general store located in Lions Bay, B.C., in addition to her work for Destiny. Her work for the café included sourcing and ordering alcohol; managing inventory, pricing, and equipment procurement; reviewing point of sale reports; corresponding with employees, contractors, and suppliers; and more.

From January 2017 until the termination of her employment with Destiny, the plaintiff spent a significant amount of time completing work and tasks for the café during her regular working hours for Destiny. This included sending and receiving about 2,700 emails in connection with her café work. There was even at least one occasion where she stored café items on Destiny’s premises.

As a result of spending so much time on her work for the café, particularly during her work hours for Destiny, the plaintiff’s work for Destiny began to significantly decline and she missed important deadlines. Destiny also began having an extensive absenteeism problem with the plaintiff. She had at one point taken about 24 unapproved vacation days within a 43-day period. Finally, the plaintiff also was falling behind on regular job duties for Destiny (such as signing off on subordinate’s time) and was failing to respond to inquiries in a timely manner.

As a result of her declining work performance and excessive absenteeism, the plaintiff was suspended by Destiny in June 2017 and an investigation was launched with respect to her conduct, which the plaintiff refused to participate in. Following the investigation, the plaintiff’s employment was terminated for cause later that same month.

The court’s decision

The British Columbia Supreme Court confirmed that, unless otherwise agreed, full-time employees have an obligation to provide full-time services to their employer and doing outside work during business hours can result in a “just cause” dismissal.

The court also established that the nature of the employee’s conduct determines whether or not an employer is required to provide, prior to dismissal, a warning to the employee that their conduct may result in termination if continued. Where the employee’s misconduct is serious, a court is unlikely to require an employer to provide a notice or warning to the employee.

However, if the misconduct was trivial, or the employer had tolerated the conduct in the past, a notice or warning would need to be provided to the employee.

The court determined that Destiny had just cause to terminate the plaintiff’s employment due to the plaintiff’s neglect of her job duties for Destiny in favour of her job duties for the café.

Further, the court also determined that, even if a warning or notice had been required, the investigation and the warnings provided within the context of that investigation already fulfilled that role. This is because, if the plaintiff had cooperated with the investigation, it would have given Destiny an opportunity to outline its concerns and provided the plaintiff with an opportunity to respond to those concerns.

As such, the court dismissed the plaintiff’s lawsuit.

Lessons for employers

This case can reassure employers that they are able to discipline, and potentially dismiss, employees who take on external work without permission when it interferes with the employee’s ability to meet the requirements of their current role.

However, it is important to note that, depending on the severity of the employee’s misconduct, an employer may need to provide the employee with a notice or warning about the consequences of their continued misconduct before terminating their employment.

This case also serves as a reminder that, given the increase in people working “side-hustles” or second jobs, employers may want to specifically set out within the employment contract what is and is not permissible regarding any external work an employee may want to take on.

For more information, see Dove v Destiny Media Technologies Inc., 2023 BCSC 1032.

John Hyde is the managing partner at Hyde HR Law in Toronto. He advises management on all aspects of employment and labour law, including representation before administrative tribunals, collective agreement negotiation, arbitrations, wrongful dismissal defence and human rights.