Question
Can I run a business that competes with my employer?
I'm starting a side business in the same industry as my employer. Can I legally compete while keeping my full-time job?
Answer
It is possible. Simply operating a business in the same industry as your employer is not automatically prohibited. Whether you can legally run a competing business depends on your employment agreement, company policies, your conduct, and the laws that apply where you work.
Issues may arise if your side business competes directly with your employer, interferes with your job responsibilities, uses confidential information, or violates non-compete, non-solicitation, or other contractual obligations (where enforceable). In some situations, duties of loyalty or fiduciary obligations may also apply. Whether your business creates an attorneyblem depends on the specific facts and the rules that apply to your situation.
What employment issues should you review?
Before operating a competing business, review any obligations that could affect your ability to do so. These may include:
- Non-compete agreements.
- Non-solicitation provisions.
- Confidentiality or nondisclosure obligations.
- Conflict of interest policies.
- Restrictions on outside business activities.
- Industry-specific laws or professional rules.
Understanding these requirements can help you identify potential risks before launching your business.
How can you reduce the risk of disputes?
If you decide to operate a business while employed, keeping the two activities separate can help reduce potential conflicts. Consider:
- Running your business outside of work hours.
- Avoiding the use of your employer's equipment or resources.
- Protecting confidential or proprietary information.
- Not soliciting your employer's customers or employees if restrictions apply.
- Keeping separate business records and communications.
- Monitoring whether your business affects your job performance.
Taking these steps can help reduce the likelihood of disputes with your employer.
What to do next…
- Review your employment agreement and workplace policies.
- Determine whether your business could compete with your employer.
- Identify any contractual or legal restrictions that may apply.
- Keep your employment responsibilities and business activities separate.
What to consider in your specific situation
- Your employment agreement and company policies.
- The type of business you plan to operate.
- Whether your business targets the same customers or markets.
- Your access to confidential information or company resources.
- Industry-specific laws, regulations, or professional obligations.
- The impact of your business on your job duties and performance.
Since every situation is different, consider getting more information through Rocket Copilot or an attorney review to move forward more confidently.
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.
Need to make sure your business is properly registered?
Operating a business without proper registration can expose you to personal liability, tax complications, and legal action. Whether you need to fix past non-registration, understand how a side business impacts your current employment, or navigate tax obligations, Rocket Lawyer provides the tools and support you need:
- Rocket Copilot Q&A for instant legal information
- Ask an Attorney for human responses within a business day
- Business registration and other smart legal tools
Address your registration issues and protect your business with trusted legal support.
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?
- See even more questions about operating without proper registration
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Disclosures
- This page offers general legal information, 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.