How moonlighting policies affect Intellectual Property Rights in remote work settings?

INTRODUCTION

There has been a rise in remote work culture globally with the shift in technology and our move forward to the digital era. There has been a significant rise in the same, especially after the COVID-19 pandemic. Moonlighting is the practice of holding another job after being engaged in full-time employment. This has been a common practice nowadays where people are involved in freelancing, gig works or some other form of work after their full-time employment because of various reasons like financial reasons, personal growth, and various interests. These practices have become common nowadays, especially in remote jobs, as employees have the flexibility of their schedule without direct supervision. People can manage their main tasks as long commute hours are saved by remote work, also moonlighting was the only practice that helped the employees to fulfill their financial needs, especially during the time of COVID when there was a significant salary cut. But this has somehow created a shift in the relationship of the employer and employee related to the concerns of work ethics and the substantial concern about intellectual property rights and the safety of sensitive data.

INTELLECTUAL PROPERTY RIGHTS IN EMPLOYMENT RELATIONSHIPS

Understanding Intellectual Property Right at the Workplace
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Generally, it is seen that the right of the intellectual property stays with the employer if the idea or intellectual property was created during the course of time of employment. But obvious, there could be an exception to it if there has been an agreement between the employer and employee, and it agrees otherwise.

Intellectual property rights risks created by moonlighting in remote work
Although moonlighting can create an exchange of ideas, which can enhance innovation and the enhancement of skills, it comes with its own challenges. What if the employee who has been working under two jobs creates a software, with which such intellectual rights will fall? This is a question of utmost importance, and that’s when the ownership conflict of intellectual property comes into being. This raises significant ethical and legal obligations. Generally, by the course of employment doctrine, the ownership of the intellectual works falls under the employer. But while performing moonlighting, it becomes difficult to analyse the course of employment because of the flexibility of working hours in remote work settings. There could arise concerns for legal disputes between the different jobs, safety concerns related to relevant data, and possibly using the sources of both companies where you are employed.

MOONLIGHTING POLICIES AND EMPLOYER RESPONSES

Various legal frameworks that deal with dual employment or moonlighting in India
Section 60 of the Factories Act, 1948, which prohibits an adult worker from working in another factory when he has already worked in one factory. The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code) limits dual employment. Industrial Employment Rules, 1946, and Information Technology Act, 2000, where the employee is expected not to act against the primary employer and with relevance to tech employees, seeing that dual employment does not harm or violate confidentiality or date protection, respectively. Through these statutes, we can see that it is tried to maintain the security of sensitive data.

Various case studies with reference to moonlighting
In some cases, by engaging in moonlighting, the employee somehow violates the conditions of primary employment, which can lead to losing the job, and legal actions may arise, too. The engagement of the employee in another employment may also lead to the decline of productive output that could have been achieved by him/her otherwise.

Wipro’s zero-tolerance policy—This was clearly observed when Wipro removed 300 workers, showcasing its zero tolerance towards moonlighting.
Swiggy—Looking at Swiggy, it has taken an employee-friendly approach in this scenario, where it has allowed the employee to have part-time employment somewhere but under certain conditions where the secondary employment should not hinder the primary employment or work.
Infosys- It has seen moonlighting as a danger that brings up security risks, low productivity, and safety concerns. It has seen the practice as something unethical in the professional sphere.

 EMPLOYMENT CONTRACTS AND RESTRICTIONS

Many contractual obligations have started to be made to protect the ethical and legal obligations that are otherwise affected under moonlighting.
Non-Compete Agreements: It restricts an employee from working in a rival company or starting a rival business for a reasonable period of time after leaving the job.
Non-Disclosure Agreement- It is designed to protect the confidential and sensitive information of the company.
Exclusive Employment Clauses—This prevents the employee from moonlighting or from being a part of any concurrent employment.

MAJOR IMPACTS ON IP RIGHTS IN REMOTE WORK SETTINGS

Risk of IP leakage— In remote work, while developing something, the employee can, by mistake, unintentionally or because of a lack of proper care, cause leakage of the company's intellectual property while using unauthorised networks. Such leakage, for instance, leakage of a trade secret, if to a rival company, can cause such harm that is beyond repair.
Ownership Dispute over Creation of IP: Moonlighting creates a complicating framework in which it becomes really difficult to determine the right of the actual owner of the intellectual property.

POLICY RECOMMENDATIONS

Transparent guidelines—The company should create very clear guidelines regarding the moonlighting practice of the employee. Also, if the employer permits such a practice, a clear understanding regarding the IP rights should be mentioned.
Strict Prohibition to Protect the Company's Data—The company should frame strong guidelines in order to protect the company’s sensitive data and should also inform employees regarding using the sources of the company to protect itself from any IP leakages, which could cause great harm beyond repair.
Protection for Trade Secrets—Strictly prohibiting the disclosure of the company’s sensitive data, trade secrets, or clients’ personal data.
Post Employment Checks—The company should adhere to the post-employment safeguard to ensure that the data of the company has been protected. Also, the employee maintains a reasonable time frame before joining any rival company or starting a rival business of its own.

CONCLUSION

The rising global practice of moonlighting basically shows us the shift that is happening between the classical work nature and the work environment in the digital age of 21th century. The practise comes with its own shortcomings, with special focus on protecting the intellectual property rights not only of the employee but also of the employer. The implementation of the right contractual framework and actions can safeguard the intellectual rights of both parties. The strategic laws, even in the sphere of allowing moonlighting, can easily tackle the various IP problems that arise because of moonlighting.

FOOTNOTES
1. AIPPI, ‘Understanding Intellectual Property Rights in the Workplace: Who Owns the IP Rights?’ (AIPPI, 2024) https://www.aippi.org/news/understanding-intellectual-property-rights-in-the-workplace-who-owns-the-ip-rights/ accessed 7 March 2026.

2. Narasimha, ‘Impact of Employee Moonlighting on Organisational Performance: Risks and Resolutions,' International Research Journal of Modern Engineering and Technology and Science (IRJMETS), vol. 6, no. 12 (December 2024), pp. 1–9.

3. The Factories Act, 1948, s 60 (India Code, 1948)

4. Occupational Safety, Health and Working Conditions Code, 2020 (No. 37 of 2020, India Code, 2020)

5. Industrial Employment Rules 1946.

6. IT Act 2000.