Exclusivity Clauses in Employment Contracts
Can employers prevent employees from having second jobs? Understand exclusivity clauses, when they're enforceable, and exceptions for zero-hours workers.
Exclusivity clauses restrict employees from working elsewhere or engaging in outside business activities during employment.
Types of Exclusivity Clauses
Full Exclusivity
"You shall devote the whole of your time, attention, and abilities to your duties and shall not, without the prior written consent of the Company, engage in any other business or employment during your employment."
Notification Requirement
"You must notify the Company in writing before undertaking any additional employment, business activity, or directorships. The Company may withhold consent where it reasonably believes such activity conflicts with your duties or the Company's interests."
Limited Exclusivity
"You shall not engage in any employment or activity that:
- Competes with the Company's business
- Conflicts with your duties
- Brings the Company into disrepute
- Adversely affects your performance"
When Exclusivity Is Reasonable
Legitimate Business Interests
Employers may legitimately require exclusivity to:
- Protect confidential information
- Prevent conflicts of interest
- Ensure employee availability
- Maintain productivity
- Protect reputation
Factors Affecting Enforceability
| Factor | More Enforceable | Less Enforceable |
|---|---|---|
| Role level | Senior/management | Junior roles |
| Hours | Full-time | Part-time |
| Nature of restriction | Limited scope | Blanket ban |
| Business justification | Clear need | No clear purpose |
| Duration | During employment | After employment |
Zero-Hours Contracts
Exclusivity Clauses Are Void
Under the Small Business, Enterprise and Employment Act 2015:
- Exclusivity clauses in zero-hours contracts are unenforceable
- Workers cannot be dismissed or subjected to detriment for working elsewhere
- Applies where there's no guaranteed minimum hours
What Employers Can Still Do
Even with zero-hours contracts, employers can:
- Require notification of other work
- Prevent direct competition during assignments
- Protect confidential information
Example Compliant Clause
"You are free to work for other employers when not working for the Company. However, you must inform the Company of any other regular employment and must not work for direct competitors or disclose confidential information."
Conflicts of Interest
Conflict Clause
"You must declare any actual or potential conflict of interest, including:
- Employment with competitors or customers
- Financial interests in related businesses
- Family relationships that may create conflicts
- Outside directorships or consultancies"
Managing Conflicts
"Where a conflict exists, the Company may:
- Require you to resign the conflicting position
- Restrict your involvement in related matters
- Put measures in place to manage the conflict"
Outside Business Interests
Disclosure Requirement
"You must obtain prior written approval before:
- Becoming a director of any company
- Acquiring a significant financial interest in any business
- Providing services to any business (whether paid or unpaid)"
Permitted Activities
"This clause does not prevent you from holding investments of up to [5]% in publicly listed companies, provided such holding does not create a conflict of interest."
Working Time Considerations
Multiple Employment
Employees with multiple jobs must ensure total working hours comply with working time regulations:
- 48-hour average weekly limit
- Rest period requirements
- Night work limits
Employer Responsibilities
"If you work for other employers, you must inform the Company of your total working hours across all employment to ensure compliance with working time regulations."
Breach of Exclusivity
Consequences
Breach of a valid exclusivity clause may result in:
- Disciplinary action up to dismissal
- Requirement to resign other position
- Breach of contract claim
Investigation
"If the Company believes you may have breached this clause, it may conduct an investigation and may suspend you pending the outcome."
Practical Considerations
For Employers
- Only include exclusivity where genuinely needed
- Tailor restrictions to the role
- Allow reasonable outside activities
- Have clear approval process
- Don't use in zero-hours contracts
- Apply consistently
For Employees
- Read exclusivity clauses carefully before signing
- Disclose any existing secondary employment
- Seek approval before starting new work
- Consider impact on working time
- Avoid conflicts of interest
- Keep employer informed
Sample Balanced Clause
"You may not, without prior written consent:
(a) engage in any business or employment that competes with the Company; (b) engage in any employment that may conflict with your duties; or (c) take up any other employment that would, when combined with your work for the Company, exceed an average of 48 hours per week.
You must inform the Company of any other regular employment or significant business interests. Consent to other employment will not be unreasonably withheld where there is no conflict with Company interests."
Related answers
Confidentiality Clauses in Employment Contracts
How confidentiality clauses protect business information. Learn what can be covered and how to enforce confidentiality obligations.
Employment Contract Requirements UK
What must be included in a UK employment contract? Learn the legal requirements for written statements of particulars and what happens if you get it wrong.
Zero-Hours Contracts: Employer's Guide
How to use zero-hours contracts legally. Rights of zero-hours workers, exclusivity bans, holiday pay, and when to use them appropriately.
Frequently Asked Questions
- Can my employer stop me having a second job?
- If your contract contains an exclusivity clause, your employer may be able to prevent or restrict secondary employment. However, such clauses must be reasonable, and there are special protections for zero-hours contract workers.
- Are exclusivity clauses enforceable?
- Generally yes, if they're reasonable and protect legitimate business interests. However, exclusivity clauses in zero-hours contracts are unenforceable, and any clause must not be so restrictive as to be a restraint of trade.
- Do I have to tell my employer about my second job?
- This depends on your contract. Many contracts require disclosure of other employment or business interests. Even without such a clause, you have a duty not to act against your employer's interests.