Moonlighting While on FMLA

Q: We have an employee who went out on what appeared to be legitimate FMLA leave for her own serious health condition. However, another employee saw her working in a retail establishment at a mall one evening. What do we do? Can we terminate her?

A: It depends on whether the employee engaged in FMLA fraud or a violation of your policy. An employee who is on approved leave under the FMLA and accepts another employment opportunity or works another job (moonlights) is not automatically considered to have committed FMLA fraud. FMLA fraud occurs when an employee takes FMLA leave for purposes other than those permitted under the FMLA. For example:

  • Working for another employer, performing same or similar duties that the employee’s FMLA medical certification form says he or she is not able to perform; or
  • Engaging in off-duty activity, while on FMLA leave for one’s own serious health condition, that is inconsistent with the limitations the serious health condition imposes.

If an employer has a lawful, uniformly applied no-moonlighting policy or a clause prohibiting such conduct in its FMLA policy, then that policy may apply to an employee out on FMLA leave, so long as the employer does not treat the employee on FMLA leave differently from those who are on an equivalent leave status for a non-FMLA-qualifying reason.

Before an employer fires an employee for moonlighting, the employer should conduct a thorough, documented investigation. At the end of the investigation, the employer should have an honest and reasonable belief that the employee violated its policy and engaged in FMLA fraud. Also, while the FMLA may permit no moonlighting policies/clauses, there are some states, such as Colorado, that effectively prohibit the application of no-moonlighting policies in certain contexts by making it unlawful for an employer to prohibit an employee’s lawful off-duty conduct.

If an employer does not have a no moonlighting policy, the employer is not allowed to deny FMLA benefits unless the employer can prove that the FMLA leave was fraudulently obtained.

These materials are general in nature not to be construed as the rendering of legal or management advice. Send your questions to cgraves@msec.org. Please tell us if you would prefer your identity not be mentioned in our answer.