AI agents for business finance: what they can and can't do
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The short answer
Your employer can restrict a side hustle through your contract, but Nigerian courts treat restraints of trade as unenforceable unless they protect a real interest and are reasonable, following the Supreme Court in Koumoulis v Leventis Motors (1973). Exclusivity clauses that bar outside work during employment are more readily upheld than non-competes after you leave, and the FCCPA 2018 exempts post-employment restrictions only up to two years.
Most employment contracts in Nigeria say something about outside work, even if it is a single line in a staff handbook. Whether your employer can stop your weekend business depends on what that clause says, whether it is reasonable, and whether the side work competes with or harms the employer. This guide explains the main clause types and the legal tests, using a September 2026 summary of Nigerian case law. It is information, not legal advice.
Three clauses that affect side work
| Clause | When it applies | What it usually says |
|---|---|---|
| Exclusivity or full-time service | While you are employed | You will devote your working time to the employer and not take other employment or business without consent |
| Confidentiality | During and after employment | You will not use or disclose the employer's confidential information |
| Non-compete or non-solicitation | After you leave, for a set period | You will not work for a competitor or approach the employer's clients or staff |
The three are often confused. A side hustle selling shoes online rarely touches confidentiality or non-compete clauses if you work in a bank, but it can still breach an exclusivity clause that bans any outside business without written consent.
What Nigerian courts look for
Afriwise's republication of an OAL note, dated 24 September 2026, sets out the position. The leading authority is the Supreme Court's decision in Koumoulis v Leventis Motors Ltd (1973): covenants in restraint of trade are prima facie unenforceable and are upheld only if they are reasonable. The note lists the tests courts apply:
- A legitimate interest. Trade secrets, confidential information or client relationships qualify; a general wish to prevent competition does not.
- Reasonable between the parties. No wider than needed to protect that interest.
- Reasonable duration. Indefinite restraints are treated as void.
- Reasonable scope. Limited to the market and activities where the employer actually competes.
- Public policy. It must not effectively deprive you of a livelihood.
- Severability. A court may strike out an invalid part if the rest can stand.
The note reports that the National Industrial Court, in iROKOtv.com Ltd v Michael Ugwu, declined to enforce a two-year restraint because the employer had not shown a protectable interest, and that the employer bore the burden of proving the restraint reasonable.
The FCCPA two-year ceiling
Section 59 of the Federal Competition and Consumer Protection Act 2018 prohibits anti-competitive agreements, and section 68(1)(e) exempts individual employment contracts where the restriction lasts no longer than two years. The note's authors read this as "a ceiling, not a safe harbour": a restraint under two years must still pass the reasonableness test.
Exclusivity during employment is different
The case law above deals mainly with what happens after you leave. While you are still employed, an employer has a stronger claim to your working time and loyalty, and a clause requiring consent for outside work is easier to justify. The OAL note does not analyse exclusivity clauses separately, so treat these as practical points rather than settled law:
- Work done in the employer's hours, with its laptop or with its clients is the riskiest kind of side hustle.
- A side business in an unrelated field, done in your own time, is the hardest for an employer to object to on grounds of competition, but a clear contractual ban still exposes you to disciplinary action.
- Asking for consent in writing and keeping the reply removes most of the risk.
What the Labour Act covers, and what it does not
The Labour Act does not regulate side hustles or non-competes. It is relevant in two ways. Section 11 sets minimum notice periods to end a contract, from one day where the contract has run three months or less up to one month after five years or more, with notice of a week or more given in writing. And section 91 defines "worker" to exclude people exercising administrative, executive, technical or professional functions, so many office staff rely on their contract and general law rather than the Act. Public servants face separate rules; see can civil servants run a side business.
What to check before you start
- Find your signed contract and the current staff handbook; clauses on outside work often sit in the handbook.
- Look for the words exclusive, full time, outside employment, conflict of interest, confidential and restraint.
- Ask whether your side work competes with your employer, uses its information or serves its clients.
- If a clause requires consent, ask in writing, describe the work plainly and keep the reply.
- Keep the side business on your own devices, accounts and time.
- If you are unsure, pay for a short consultation with an employment lawyer before you sign a new contract, when terms are easier to negotiate.
For the practical side of starting, see how to start a side income alongside your job.
Where Pryme fits
Separating your side business money from salary helps show the business runs on its own time and resources. A Pryme Business Account keeps sales and costs apart, with invoices you can send from the app; see invoicing and open an account.
Questions people ask
Can my employer sack me for having a side hustle in Nigeria?
If your contract or handbook bans outside work without consent, a breach can lead to disciplinary action. Getting written consent is the safest course.
Are non-compete clauses enforceable in Nigeria?
Only if reasonable and protecting a legitimate interest, following Koumoulis v Leventis Motors (1973). The FCCPA 2018 exempts employment restrictions only up to two years.
Does the Labour Act allow side jobs?
The Labour Act does not address side jobs. Your contract and general contract law decide what you may do outside work.
Can my company stop me working for a competitor after I resign?
A court will look at duration, scope and whether the employer has a real interest such as trade secrets or client relationships. In iROKOtv v Ugwu the NICN refused to enforce a two-year restraint.
Sources
- Afriwise/OAL: Non-compete and restraint of trade clauses under Nigerian law (24 Sep 2026) · accessed Oct 2026
- Labour Act, Cap L1 LFN 2004 (PLAC Laws of Nigeria) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.