Can My Employer Threaten to Fire Me if I Do Work for Others?

Full question:

I am a graphic designer. I work for a sign company. My boss said he would fire me if I do any design for profit outside of work. We use different software and hardware. I would not advertise or take clients. I offered to refer my design clients to the sign shop for print needs. Can he legally fire me and deny me unemployment for this if I have signed nothing and was never informed of any such company policy upon being hired?

• Category: Employment
• Date: 04/07/2025
• State: Colorado

Answer:

It is possible for an employer to require an employee to perform work exclusively for that employer. The U.S. has laws regarding being fired for discriminatory reasons, on the basis of protected classes such as age, race, gender, nationality, handicap, or religion. Wrongful discharge claims are often made on the basis of discrimination against a protected classification. If an employee isn’t protected by an employment or union contract, they are typically at-will employees who may be fired for any or no reason without notice. If a contract, such as a collective bargaining agreement applies, employees may be required to be given a fair warning as to their performance and conduct which might lead to their dismissal, as well as a step-by-step procedure leading up to dismissal.

A non-compete agreement is often used to avoid an employee working for a competitor after the employment relationship is terminated. Courts will enforce non-competition agreements if:

-the employer proves that it has a legitimate business interest to protect by restricting its employees' right to compete against it;
-the restriction on the employee's right to compete is no greater than that necessary to protect the employer's business interest; and
-the covenant not to compete is supported by consideration, meaning that the employee received something in exchange for it.