This has been the default policy (inventions / work on your free time == the companies) at just about every job I've ever had in my career. They slip it into employment agreements as a method to ensure they can claim ownership over any "Intellectual Property and Inventions" you might make.

I've known several people (and OSS developers) who have been on the blunt end of this pretty nasty clause. They've been sued, or startups they started on the side sued by their now-ex company.

I've done the startup thing to the big company thing and somehow these clauses have always been there.

Disclosure: I work with Van @Rackspace - this updated policy is one step on a grand master open source plan :)

When I used to work for Motorola (pre-breakup), they had a clause in their standard contract (that you only saw on your first day orientation) that stated something along the lines of "Any idea, invention, or innovation conceived solely by employee or jointly with others, at any time during your duration of employment, that pertains to any current, future, or planned activities of the company, are owned by the company."

I'm sure I got a couple of words wrong in there, but I recall that at around the same time there was a large chunk of some open source project that had to be removed due to contributions by an employee of another company with similar wording. And when I asked about it with higher-ups, they basically said that even if you are working at home at midnight, on your own equipment, what you do may have been influenced by something like a hallway conversation with a co-worker.

My career has mostly been at banks and finance companies. It is indeed typical corporate american policy, at least for a certain size and type of corporation (and my personal sample).

Interestingly, as a development manager I have had candidates (hey Yousef!) balk at this condition and I just strike it out, initial, and submit to HR. No one ever checks this shit.