Your Side Hustle Could Cost You Your Job — The Silent Legal War Brewing in Kenya’s Workplaces

Kenya’s courts have now made it clear — loyalty in employment is not negotiable. Even if your contract doesn’t have a “non-compete” clause, the law expects you to act in good faith and protect your employer’s interests while still under their payroll. This means that those “side hustles” mirroring your employer’s core business could land you in serious legal and financial trouble.

The court’s recent interpretation of employment law stems from a case where an employee used their position to benefit a competing firm. Judges ruled that an employee’s duty of loyalty exists inherently, not only through a written clause. This shifts the balance in corporate Kenya, where over 60% of urban employees reportedly run side ventures — many in the same line as their employers — from logistics and design to digital consulting and supply chains.

A non-compete clause, in simple terms, is a contractual provision that prevents employees from working for a rival or launching a competing enterprise for a certain period after leaving their employer. But this judgment goes beyond that — it implies that even without such a clause, you could still face penalties or dismissal if your activities conflict with your employer’s business interests.

Take, for example, the case of a marketing executive who secretly runs a parallel agency offering similar services to their employer’s clients. Even if they never signed a non-compete clause, the law can now interpret their side hustle as a breach of loyalty and fiduciary duty. That breach doesn’t just justify dismissal — it can invite lawsuits for damages or loss of revenue.

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Kenya’s economy has seen a sharp rise in “dual-income” workers, especially after the pandemic. According to a Geopoll survey (2023), 58% of employed Kenyans have at least one side hustle, often to supplement low wages. However, as inflation bites and corporate margins tighten, employers are beginning to view competing side ventures not as survival tactics — but as conflicts of interest.

In the corporate world, loyalty is currency. You are entrusted with proprietary data, client lists, business strategies, and trade secrets. Using any of that information, even indirectly, to build or support a competitor is equivalent to corporate espionage — and under Section 17 of the Employment Act, it can be deemed gross misconduct.

What makes this ruling controversial is that it exposes the blurry line between innovation and betrayal. Many Kenyans have built thriving startups while still formally employed — and in several cases, those ventures were born out of their daily corporate frustrations. But this new interpretation effectively tells workers: innovate all you want, but not while you’re still cashing someone else’s cheque.

For employers, this ruling is a lifeline. It offers legal ground to demand accountability and guard against divided attention that drains productivity. For employees, it’s a wake-up call to separate ambition from conflict. The ruling doesn’t ban side hustles altogether — it simply forces a moral and legal question: is your hustle competing or complementing your employer?

Globally, this isn’t new. In the United States, for instance, around 30 million employees are bound by non-compete clauses, according to the Federal Trade Commission. However, there’s a growing movement to limit their use, arguing that they suppress innovation. Kenya’s case takes a different path — it doesn’t need a clause; it appeals directly to character and ethics.

The danger, however, lies in enforcement abuse. Unscrupulous employers might weaponize “loyalty” to silence employees from pursuing harmless ventures. If unchecked, it could stifle creativity and push more professionals into the grey economy, where ideas live outside formal employment structures.

Still, the ruling sets a profound precedent: you cannot serve two masters in the same marketplace. If your employer sells shoes, you can sell socks — not shoes. If they offer digital marketing, start a bakery — not a rival agency.

As Kenya’s gig and entrepreneurial culture deepens, the future of work will demand clearer boundaries. The Kenya Private Sector Alliance (KEPSA) and the Federation of Kenya Employers (FKE) may soon need to draft frameworks guiding ethical side hustling — because right now, the law stands firmly on the employer’s side.

In the end, this judgment is not just about contracts. It’s about integrity. It’s about the unseen handshake between employer and employee that says: while you work here, your loyalty stays here. Those who ignore this principle may soon find that their “hustle” doesn’t just cost them clients — it costs them their career.

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