--- title: "Moonlighting in India: Intellectual Property Ownership, Confidentiality and Employment Restrictions " date: 2026-11-12 author: "Rohitaashv Sinha" url: https://ksandk.com/labour-employment/moonlighting-india-ip-ownership-confidentiality/ --- # Moonlighting in India: Intellectual Property Ownership, Confidentiality and Employment Restrictions  Posted On - 12 November, 2026 • By - Rohitaashv Sinha ![Moonlighting in India illustrating employee IP ownership, confidentiality obligations and restrictions on secondary employment.](https://ksandk.com/wp-content/uploads/Moonlighting_-Confidentiality-at-Work-1.png) ## **Introduction** The rise of remote and hybrid working has made moonlighting i.e. the practice of undertaking additional employment, freelance assignments, consulting engagements or other professional activities while continuing in a primary job, a significant concern for Indian employers. The issue is particularly relevant in the information technology, consulting, financial services, media and professional services sectors, where employees may have access to commercially sensitive information, proprietary technology and client relationships.  Moonlighting is not governed by a single, comprehensive statute in India. Its permissibility depends on the applicable employment contract, the nature of the secondary engagement, relevant labour legislation and the employee’s continuing obligations towards the primary employer. The legal position also involves questions that extend beyond dual employment: who owns intellectual property created during a side project, whether the project uses or discloses confidential information, and whether the employee’s activities create a conflict of interest.  The implementation of the four Labour Codes from 21 November 2025 has also made it necessary to reassess the statutory position. Although the Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”) retains a restriction on certain forms of double employment, it does not establish a general prohibition applicable to every employee undertaking outside work.  For employers, the challenge is therefore to distinguish legitimate outside activities from engagements that compromise contractual obligations, business interests, intellectual property rights or confidentiality. A carefully drafted moonlighting policy, supported by appropriate employment and intellectual property provisions, can help address these risks without imposing unnecessarily broad restrictions on employees.  ## **Moonlighting and the legal position under Indian labour laws** Indian law does not provide a general statutory definition of moonlighting or impose a universal prohibition on employees undertaking secondary employment. However, certain provisions regulate double employment in specific circumstances.  ### ***The OSH Code and restriction on double employment*** Section 30 of the OSH Code provides that a worker cannot be required or allowed to work in a factory or mine if the worker has already been working in another such similar establishment within the preceding 12 hours, except in circumstances that may be prescribed by the appropriate Government. This provision is relevant when assessing double employment in the factory and mining sectors. However, it should not be interpreted as a general prohibition on every form of secondary employment, freelance work or independent professional activity.  The scope of the provision must also be read with the definition of “worker” under the OSH Code. The definition covers persons engaged in manual, unskilled, skilled, technical, operational, clerical or supervisory work, subject to specified exclusions. Persons employed mainly in managerial or administrative capacities and certain supervisory employees drawing wages above the prescribed threshold are excluded.  Consequently, the application of Section 30 depends on the nature of the establishment, the employee’s role and the circumstances of the second engagement. An IT professional undertaking freelance software development, for example, cannot automatically be treated as falling within the prohibition merely because the individual has two professional engagements.  ### ***State Shops and Establishments legislation*** Employees working in commercial establishments are also subject to the applicable state Shops and Establishments legislation. These laws are not uniform across India, and their provisions must be examined separately. For example, Section 9 of the Delhi Shops and Establishments Act, 1954 restricts a person from working in the business of one or more establishments, or an establishment and a factory, in excess of the period during which the person may lawfully be employed under the Act. The provision is therefore linked to the statutory limits on working hours and should not be described as an unconditional prohibition on every form of secondary employment.  Other state enactments may regulate working hours, rest intervals, weekly holidays and conditions of employment without necessarily containing an equivalent provision on double employment. Employers should therefore assess the legislation applicable to the establishment and the employee’s actual place of work rather than assume that a restriction under one state’s law applies uniformly throughout India.  ### ***Employment contracts and standing orders*** In practice, employment contracts remain an important source of restrictions on moonlighting. Employers commonly include provisions requiring employees to devote their working time and professional attention to their employment, disclose potential conflicts of interest, obtain prior approval for outside engagements and refrain from undertaking activities that compete with or prejudice the employer’s business.  The Industrial Relations Code, 2020 and the applicable standing orders framework may also be relevant for covered industrial establishments. Employers should examine the applicable certified or model standing orders, including provisions dealing with misconduct and additional employment, rather than assume that a general statutory prohibition applies to every employee.  Accordingly, the legal position cannot be determined merely by asking whether moonlighting is prohibited under Indian law. It requires an assessment of the applicable statutory provisions, the employee’s contractual obligations, the nature of the outside engagement and any resulting conflict of interest.  ## **Can an employer restrict an employee from undertaking secondary employment?** A key consideration is the distinction between restrictions imposed during the employment relationship and restrictions that continue after employment ends. Section 27 of the Indian Contract Act, 1872 provides that agreements restraining a person from exercising a lawful profession, trade or business are void to the extent of the restraint, subject to the statutory exception relating to the sale of goodwill. However, Indian courts have distinguished between a restriction operating during the subsistence of an employment contract and a post-employment non-compete restriction.  In *Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd.*, the Supreme Court recognised that a negative covenant requiring an employee to serve an employer exclusively during the contractual period would not ordinarily constitute a restraint of trade under Section 27. The Court also recognised that the terms of such a restriction must be considered in the context of the employment arrangement and the interests sought to be protected.  By contrast, in *Percept D’Mark (India) Pvt. Ltd. v. Zaheer Khan*, the Supreme Court reaffirmed the restrictive approach to post-contractual restraints under Section 27. A restriction that prevents a person from pursuing a lawful occupation after the contractual relationship has ended may be unenforceable.  These decisions do not establish that every restriction on outside work is automatically enforceable. An employer seeking to restrict secondary employment during the employment relationship should ensure that the relevant contractual provision is appropriately drafted and connected to legitimate employment interests, such as exclusivity, conflicts of interest, confidentiality, protection of trade secrets and avoidance of competing engagements.  A blanket restriction that does not distinguish between competing work, independent projects, academic activities, personal interests and passive investments may be unnecessarily broad. A more carefully structured policy can address the actual risks associated with outside engagements.  ## **Ownership of intellectual property created during a side project** One of the most important issues arising from moonlighting is whether intellectual property created by an employee during a secondary engagement belongs to the employee, the primary employer or the entity commissioning the work. The answer depends on the nature of the intellectual property, the circumstances in which it was created and the contractual arrangements governing ownership.  ### ***Copyright ownership under Section 17 of the Copyright Act, 1957*** Section 17 of the Copyright Act, 1957 establishes the general rule that the author of a work is its first owner, subject to the exceptions provided under the Act. Under Section 17(c), where a work is created in the course of the author’s employment under a contract of service or apprenticeship, the employer is the first owner of copyright in the absence of an agreement to the contrary. This provision may be relevant to software code, technical documentation, written material, designs and other copyright-protected works created by employees.  The expression “in the course of employment” is important. The fact that a work was created outside regular working hours does not, by itself, conclusively determine ownership. Equally, the existence of an employment relationship does not automatically make the employer the owner of every creative or technical work produced by the employee during the period of employment.  Relevant considerations may include:  - Whether the work relates to the employee’s assigned responsibilities or the employer’s business;  - Whether the work was created as part of an employment assignment or at the employer’s direction;  - Whether company equipment, software, data, infrastructure or other resources were used;  - Whether the work incorporates or is derived from the employer’s existing intellectual property or confidential material; and  - Whether the employment contract contains an intellectual property assignment covering the relevant category of work.  A personal application, independent design project or technical product developed entirely outside the employee’s professional responsibilities may raise a different ownership question from software developed using the employer’s proprietary codebase or as an extension of an assigned project.  ### **The effect of contractual intellectual property assignment clauses** [Employment contracts](https://ksandk.com/labour-employment/fixed-term-employment-labour-codes-compliance-checklist/), particularly in the IT, technology, research and creative sectors, frequently contain broad intellectual property assignment provisions. These clauses may cover inventions, software, designs, processes, documentation and other work created during the employment period. An employee who assumes that a side project automatically belongs to them because it was developed using personal equipment and outside working hours may therefore overlook the wording of the employment agreement.  The scope of an assignment clause must be examined in its entirety. In particular, employers and employees should consider whether it covers only work created in the course of employment or extends to specified categories of work developed during the term of employment, including work unrelated to the employee’s assigned responsibilities.  The Copyright Act also recognises assignments of existing and future copyright under Sections 18 and 19. An assignment must satisfy the applicable statutory formalities, including being in writing and signed by the assignor or authorised agent, and specifying the rights assigned, duration and territorial extent, among other requirements.  For employers, relying on a generic intellectual property clause without defining its intended scope can create uncertainty. For employees, undertaking an independent project without reviewing the assignment provisions in their employment contract can create avoidable ownership disputes.  ### ***Patentable inventions and other intellectual property*** The position concerning inventions and patents requires separate consideration. Unlike the copyright ownership rule under Section 17(c), the Patents Act, 1970 does not establish an equivalent general rule that every invention made by an employee automatically belongs to the employer merely because of the employment relationship.  Section 6 of the Patents Act identifies the persons entitled to apply for a patent, including the true and first inventor and a person claiming through an assignment. Section 68 further requires an assignment of a patent or an interest in a patent to be in writing and duly executed.  Accordingly, contractual provisions dealing with employee inventions, patentable developments and assignment of rights are particularly important. Employers undertaking research and development, product engineering or technology development should ensure that their employment and project agreements clearly address ownership and assignment of relevant inventions.  ## **Confidentiality risks arising from moonlighting** Intellectual property ownership is only one part of the legal risk associated with moonlighting. Confidentiality obligations may be breached even where the side project does not belong to the primary employer.  Employees routinely obtain access to information that is not publicly available, including:  - Customer and client information;  - Business plans and commercial strategies;  - Source code, software architecture and technical documentation;  - Pricing models, financial information and internal reports;  - Product roadmaps and research and development material;  - Proprietary processes, methods and operational information; and  - Information received from third parties under confidentiality obligations.  [Employment agreements](https://ksandk.com/labour-employment/employment-agreements-startup-india/) generally impose obligations restricting the use and disclosure of confidential information during employment and, in appropriate circumstances, after the employment relationship ends. A side project may create a confidentiality concern where an employee uses information acquired through their primary employment to develop a competing product, provide services to another organisation or assist a third party. The risk may arise even where the employee does not directly copy a document, source-code file or database.  For example, an employee working on a software product for their primary employer may independently undertake a similar development project for another client. Even if the employee uses personal equipment, the engagement may create a risk of using or disclosing non-public technical specifications, architecture, product plans or client information obtained through the primary employment.  However, confidentiality obligations should not be drafted or interpreted so broadly that they prevent employees from using their general professional skills, experience and knowledge. The distinction between genuinely confidential information and an employee’s general skill, experience or publicly available knowledge is important.  India does not have a single, comprehensive trade secrets statute governing all forms of confidential business information. Protection is therefore commonly pursued through contractual confidentiality obligations and applicable principles governing breach of confidence, alongside other relevant intellectual property and legal protections.  Employers should identify the categories of information that require protection and ensure that confidentiality provisions are sufficiently clear to distinguish proprietary information from general professional experience.  ## **Conflict of interest and cross-contamination of confidential information** The risks become more significant where the employee’s secondary engagement involves a competitor, client, supplier or business operating in an adjacent industry. In such circumstances, the employee may be exposed to confidential information belonging to two organisations simultaneously. This creates the possibility of inadvertent disclosure, misuse of information or decisions being influenced by knowledge obtained through the other engagement.  For example, an employee providing consulting services to a competitor may have access to the competitor’s commercial strategy while continuing to work on similar projects for the primary employer. Even without deliberate disclosure, the employee may face difficulty maintaining a clear separation between the information obtained through each engagement.  This risk is not limited to direct competitors. A secondary engagement may also create a conflict where the employee:  - Advises a client or supplier of the primary employer;  - Participates in a project involving a business opportunity being pursued by the primary employer;  - Uses internal business relationships to secure work for a personal venture;  - Recruits colleagues or solicits clients for an outside business; or  - Uses company infrastructure, software licences, accounts or other resources for personal commercial activities.  A conflict-of-interest assessment should therefore consider the nature of the work, the identity of the parties involved, access to confidential information and the employee’s responsibilities in the primary organisation.  ## **Drafting a workable moonlighting and intellectual property policy** An outright prohibition on all outside professional activities may appear administratively straightforward, but it does not necessarily address the specific risks that employers seek to prevent. A disclosure-and-approval framework can provide a more structured approach by allowing employers to assess outside engagements on their individual merits.  A well-designed moonlighting policy should address the following matters.  ### ***Define the activities covered by the policy*** The policy should clarify what constitutes secondary employment or an outside engagement. This may include:  - Full-time or part-time employment with another organisation;  - Freelance or consulting assignments;  - Independent commercial ventures;  - Paid advisory or professional engagements;  - Directorships or other management positions; and  - Work undertaken for a competitor, client or supplier.  Employers may choose to distinguish these activities from personal hobbies, voluntary work, academic activities and passive investments that do not create a conflict of interest.  ### ***Establish a disclosure and approval mechanism*** Employees should be required to disclose relevant outside engagements before commencing them, where prior approval is required under the policy. The disclosure process should capture sufficient information to assess the nature of the work, the proposed time commitment, the identity of the other organisation and any potential overlap with the employer’s business.  Approval should be based on identifiable considerations, including conflicts of interest, competition, confidentiality, working hours, performance and use of company resources. The policy should also specify the circumstances in which approval may be refused, modified or withdrawn.  ### ***Protect intellectual property ownership*** The moonlighting policy should operate consistently with the intellectual property provisions of the employment agreement.  Where the employer permits an independent side project, the parties may expressly document the treatment of intellectual property created through that engagement. A suitable carve-out may be considered for work that:  - Has been disclosed and approved in accordance with the policy;  - Is unrelated to the employee’s assigned responsibilities and the employer’s business;  - Is developed without using the employer’s equipment, software, infrastructure or confidential information; and  - Does not incorporate the employer’s existing intellectual property.  The carve-out should be appropriately documented and should not inadvertently transfer rights in employer-owned material or third-party intellectual property.  ### ***Strengthen confidentiality safeguards*** Employees undertaking approved outside work should be required to confirm that they will not use or disclose the primary employer’s confidential information. Where the secondary engagement involves a competitor or a business operating in an adjacent sector, the employer may require additional safeguards or decline approval where the risk cannot be adequately managed.  The policy should also address the use of company devices, email accounts, cloud storage, software licences, source-code repositories and other business resources. Employees should not use these resources for unauthorised outside commercial activities.  ### ***Address working hours and employee performance*** A secondary engagement should not interfere with the employee’s contractual working hours, availability, performance or other employment responsibilities. Employers should establish clear expectations regarding attendance, deliverables, working-hour commitments and the consequences of a sustained decline in performance attributable to an undisclosed outside engagement.  ### ***Provide for review and disciplinary action*** The policy should establish a process for reviewing disclosures, documenting approvals and reassessing an engagement if its nature or scope changes. It should also specify the consequences of non-disclosure, misuse of confidential information, unauthorised use of company resources or other policy violations.  Any disciplinary action should be consistent with the employment contract, applicable standing orders and relevant labour law requirements. Employers should also ensure that allegations are investigated fairly and that the employee has an appropriate opportunity to respond.  ## **Conclusion** Moonlighting in India cannot be assessed through a single statutory prohibition. The applicable legal position depends on the employee’s contractual obligations, relevant labour legislation, the nature of the secondary engagement and the risks it creates for the primary employer.  For businesses, the most significant concerns often extend beyond the fact of dual employment. A side project may raise questions concerning copyright ownership, patentable inventions, contractual intellectual property assignments, confidentiality, conflicts of interest and misuse of business resources.  The [OSH Code](https://ksandk.com/labour-employment/legal-reforms-for-bocw/) and applicable state Shops and Establishments legislation must be considered where relevant, while employment contracts and standing orders may provide additional restrictions. At the same time, intellectual property and confidentiality provisions should be drafted with sufficient precision to protect legitimate business interests without unnecessarily claiming ownership over independent work or restricting employees’ general professional skills.  A structured moonlighting policy, supported by clear disclosure procedures, appropriately defined intellectual property carve-outs and enforceable confidentiality obligations, can provide employers with a practical framework for managing these risks. Businesses must also consider the guidance of a [Labour and Employment Law Firm in India](https://ksandk.com/employment-law/) when assessing how employment contracts, workplace policies and applicable labour laws address secondary employment. For employees, reviewing their employment contracts before undertaking a secondary engagement is equally important to avoid disputes over ownership, disclosure and contractual compliance. *Last Updated on 12 November, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)