CHALLENGING THE DISLOYALTY NARRATIVE: A LEGAL AND ETHICAL CASE FOR MOONLIGHTING

This article has been written by Swedha Prakash, a fourth year law student at National law University, Jodhpur.

INTRODUCTION

The recent case of Soham Parekh has once again brought moonlighting into the national spotlight. The controversy gained attention when Suhail Doshi, a tech entrepreneur, claimed that Parekh had “scammed” several startups by secretly working for three or four companies at the same time. This has sparked strong opinions on what counts as ethical behavior, transparency, and employee loyalty

in the fast-moving tech world.

However, this controversy also highlights the need to reframe the discussion. Moonlighting should no longer be viewed exclusively through the lens of betrayal or misconduct. In an employment ecosystem where companies often underinvest in professional development, moonlighting becomes a tool for individuals to bridge economic, aspirational, and capability gaps. This article challenges the common belief that moonlighting is always disloyal, examines whether a shift in perception is beginning to take place, and argues for broader, more reasonable understanding that respects employees' choices and economic realities.

LEGAL FRAMEWORK

The term “moonlighting” describes the situation where a person who is employed full-time takes on additional work or freelance jobs outside of their main job. Although it is becoming more common, Indian law does not have a clear definition for moonlighting. Currently, there are no specific rules against having multiple jobs in India. Some laws impose limited restrictions. For example, statutes like the Shops and Establishments Acts and the Factories Act prevent employees from working beyond certain hours at another workplace. However, these laws are specific to certain sectors.

For workers in IT and service industries, the employment contracts mainly decide how moonlighting is regulated. If a contract has an exclusivity clause or a non-compete clause during employment, then moonlighting would breach the contract. However, in the absence of such specific clauses, moonlighting cannot be considered illegal.

Moreover, under Article 19(1)(g) of the Indian Constitution, all citizens have the right to practice any profession or pursue any occupation, trade, or business. This constitutional freedom implies that citizens are at a liberty to hold more than one job, subject to reasonable restrictions. Therefore, there is no legal basis for labelling moonlighting as inherently wrongful, unless it violates clearly defined contractual obligations.

WHAT ARE THE UNDERLYING REASONS FOR MOONLIGHTING?

When companies claim that moonlighting is inherently disloyal, they overlook the structural issues in India’s job market. Many tech professionals, for instance, work in high-pressure settings with few chances for creativity or growth. For these individuals, moonlighting is often less about disloyalty and more about survival and skill development. It encourages innovation, creativity, and learning, which benefit both the worker and the company.

For many others, moonlighting is a financial necessity. As urban living costs rise and wages stagnate, full-time jobs often do not meet basic needs. This problem worsened during the COVID-19 pandemic when job insecurity pushed many to seek freelance or part-time work just to stay afloat. Moonlighting also helps employees create professional networks across different industries, which boosts career growth. These connections can improve their visibility and lead to future opportunities.

EVOLVING EMPLOYER PERSPECTIVES

In recent years, many Indian startups have started to take a more open approach to moonlighting. This challenges the long-standing view that it is a form of misconduct. Unlike traditional corporate firms that see moonlighting as a betrayal, several startups have accepted it as a valid and even positive part of modern work life. Swiggy, one of India’s largest food delivery platforms, took the lead in 2022 by introducing a moonlighting policy. This policy allows employees to pursue side jobs outside their regular hours, as long as there are no conflicts of interest and they get prior approval.

Swiggy introduced this policy to bridge pay gaps and support upskilling in a competitive job market. The approach reflects a larger understanding that employees today seek flexibility and agency over their careers and that enabling such autonomy can, in fact, enhance satisfaction and retention without

compromising productivity. This openness to moonlighting is not unique to Swiggy.

A notable example is Springworks, an HR tech company, where moonlighting is accepted and not discouraged. It is seen as a natural extension of employees’ interests and talents. Kartik Mandaville, the company’s founder, has emphasized that some of the most driven and high- performing individuals in his company are those who also engage in side projects. The freedom for employees to manage their own time and commitments fosters mutual respect and leads to better outcomes than restrictive, surveillance-based models.

Zoho also supports a trust-based, flexible work environment that allows employees to work on outside projects, as long as they meet their main responsibilities and avoid conflicts of interest. Although Zoho doesn’t have a

formal moonlighting policy like Swiggy’s, its long-standing philosophy focuses on empowering employees to follow their own career paths.

Another reason why Indian startups are more open to moonlighting lies in the demographic and economic realities they face. Startups, unlike traditional firms, often operate with small teams, flat hierarchies, and a strong reliance on trust. In these environments, the focus is more on results and deliverables than on strict control over employee’s time. Many startups are also staffed by younger professionals, often Gen Z or millennial workers, who value independence, creativity, and skill development in their work sphere. More importantly, since startups often find it hard to match the salaries offered by larger companies, allowing employees to earn extra income through outside gigs serves as a practical compromise. It helps them fill financial gaps without increasing fixed wage costs.

Moreover, this reframing of moonlighting is also rooted in the lived experience of many Indian founders themselves. Companies like Zerodha and Razorpay started from entrepreneurial efforts alongside full-time jobs, showing that moonlighting can be the starting point for some of the country’s most successful innovations.

While these examples show a change in the startup ecosystem, they are not unique. Even traditional IT companies are starting to rethink their views on moonlighting. For instance, Infosys, which used to have a strict policy that

included firing employees found working for multiple companies, has changed its stance. The company now allows employees to take on freelance or side projects, as long as they get prior approval, do the work outside of

official hours, and avoid any conflicts of interest with Infosys or its clients. Although the term “moonlighting” was not used in formal communication, the policy marks a significant shift toward a more regulated and flexible system, recognizing financial pressures and changing work norms.

A growing number of organizations are revisiting their employment contracts and HR policies to allow moonlighting under certain conditions. While some companies remain cautious and continue to consider policy changes, the overall trend in India’s employment landscape indicates a more accepting attitude toward moonlighting.

WAY FORWARD

As moonlighting becomes more common in today's workplace, employees need to approach it responsibly and with clarity. Before taking on a second job or freelance work, it is important to review the terms of one’s employment contract. They should understand clauses related to non-compete, exclusivity, or confidentiality as boundaries meant to protect valid employer interests, not just as restrictions. In case of moonlighting, even if there is no direct overlap with the employer’s business or core responsibilities, disclosure remains the most prudent course. Employees can explain how their second job or freelance work would not affect their main job and seek written consent. This avoids confusion and helps create a relationship based on trust and openness.

On the other hand, employers worried about moonlighting need to shift from reactive enforcement to proactive clarity. Instead of outright bans or harsh penalties, a better approach involves clear workplace policies. Startups, in particular, can include specific moonlighting terms in employment contracts that allow flexibility while setting clear limits. These policies should define what is considered a conflict of interest, require employees to disclose side jobs beforehand, and allow certain types of external work that do not interfere with the company’s primary business interests or work hours. To prevent misuse of company resources, companies can enforce role-based access controls, conduct regular audits of project activity, and clearly prohibit using company tools or information for outside work. Protecting trade secrets and intellectual property should not come at the cost of stifling employee initiative. A more balanced approach includes creating legal and operational safeguards that are fair and clear.

Employers can establish formal approval processes, like an internal review committee or an HR-led assessment, to evaluate requests for external work. This helps them evaluate risks fairly and knowledgeably, avoiding decisions based on suspicion or overly strict policies. A fair and forward-thinking moonlighting policy can also build trust and reduce attrition, especially when combined with flexible scheduling and mental health support.

The goal should be to protect their interests while also positioning themselves as modern employers who trust

and empower their employees.

CONCLUSION

Moonlighting is no longer an exception, it is an inevitable reality of the modern workplace. In an economy driven by skills, innovation, and flexibility, attempts to suppress it through blanket bans are outdated and counterproductive. Instead, the solution lies in explicitly incorporating a moonlighting policy into employment

contracts, one that sets clear boundaries, addresses confidentiality concerns, and recognises the right of employees to pursue secondary engagements. The future belongs to organisations that embrace the idea that moonlighting is not about disloyalty; it is about acknowledging that employment itself is evolving, and that workers are adapting to survive and thrive. The companies that embrace this shift will retain top talent, foster loyalty, and remain competitive, while those that resist will inevitably fall behind. Therefore, in today’s professional landscape, moonlighting is not a threat, it is a competitive advantage waiting to be harnessed.