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Can I be fired for starting a business while employed?

I started a side business while keeping my full-time job. Could my employer fire me if they find out?

Answer

Possibly. Whether an employer can terminate your employment for starting a business depends on your employment agreement, company policies, the nature of your side business, and the laws that apply where you work.

Starting a business does not automatically mean you can be fired. However, problems may arise if your side business competes with your employer, uses confidential or proprietary information, solicits your employer's customers or coworkers, misuses company resources, or interferes with your job responsibilities. Your employment could also be affected if your business violates confidentiality, non-solicitation, or non-compete agreements (where enforceable), or other legal or contractual duties you owe to your employer.

What situations can create employment risks?

A side business is more likely to raise concerns if it interferes with your responsibilities as an employee, such as:

  • Operating a business that competes with your employer.
  • Using company time, equipment, or resources for your business.
  • Using confidential or proprietary information.
  • Violating an employment agreement or workplace policy.
  • Soliciting your employer's customers or employees.
  • Allowing the business to affect your job performance.

The specific risks depend on your role, your employer's policies, and the applicable law.

How can you reduce the risk of problems?

Many employees successfully run side businesses while remaining employed by keeping their business activities separate from their jobs. Consider:

  • Reviewing your employment agreement and company policies.
  • Running your business outside of work hours.
  • Avoiding the use of your employer's equipment or confidential information.
  • Keeping business and employment activities separate.
  • Identifying and addressing potential conflicts of interest.
  • Monitoring whether your business affects your work performance.

Taking these precautions can help reduce the likelihood of disputes with your employer.

What to do next…

  1. Review your employment agreement and any workplace policies on outside business activities.
  2. Determine whether your business could compete with your employer or create a conflict of interest.
  3. Keep your business operations separate from your job responsibilities.
  4. Address any potential issues before your side business expands.

What to consider in your specific situation

  • Your employment agreement and workplace policies.
  • The type of business you started.
  • Whether your business competes with your employer.
  • Your access to confidential information or company resources.
  • Industry-specific laws, regulations, or professional obligations.
  • The impact of your business on your job performance and responsibilities.

Since every situation is different, consider getting more information through Rocket Copilot or an attorney review to move forward more confidently.

Explore more about operating a business without formal registration

Explore more about employer conflict and moonlighting

Starting a business while working for someone else can raise legal and professional questions. These questions explore conflicts of interest, whether your employer can stop you from running a side business, and if you can be fired for moonlighting or competing with your employer.

What is a conflict of interest when starting a business?
Can I start a business while working for another employer?
Can my employer stop me from running a side business?
Can I be fired for starting a business while employed?
Do I need to tell my employer if I start a business?
Can I run a business that competes with my employer?
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Browse related topics to learn more about contracts, common clauses, business filings, and other legal issues that may apply to your situation.

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Pro Reviewed
Published on 07/30/2026
Reviewed by Rustin B. Duncan, Esq.

At Rocket Lawyer, we follow a rigorous editorial policy to ensure every article is helpful, clear, and as accurate and up-to-date as possible. This page was created, edited and reviewed by trained editorial staff who specialize in translating complex legal topics into plain language, then reviewed by experienced attorneys to ensure legal accuracy.

Please note: This page offers general legal information, but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask an Attorney.

Laura Bojart
Laura Bojart
Editorial Researcher and Copywriter

Laura Bojart is an SEO copywriter and editor at Rocket Lawyer. She researches legal and business topics and translates complex ideas into clear, practical content for everyday readers. With her background in journalism and endless curiosity, she approaches each subject by asking the questions readers are likely to have first, making legal information approachable and easy to understand even to those with no legal background.

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