Actually, I was slightly mistaken originally. One time an employer tried to pull that, but when I pointed it out, they were willing to cross out the clause, because I was willing to walk away.

Perhaps I was just lucky three times in a row?

I second this. The companies I have worked in the past and current company (I think all come well within Fortune 50 list) all had exactly similar default policy. I too was surprised when I learnt that. But ALL of my past/current companies had a "discuss & establish exception" (via manager+legal coordinator if required) for my own work done (opensource or income-generating mobile app for eg:) during non work hours. The requirements were not very complex but they could be very broadly applicable since most of these big companies are in every field/domain of the software world. And the terms could be broadly summarized as "Thou shall not be given ownership of something that is going to be competetive or near-future business opportunity for the company" . Mostly your typical android/iphone app would get an easy approval. Opensource contributions (as long as non-competetive to existing company product) get easier-pass than income-generating (any thing involving money typically complicates things :) ) projects of the employee because the potential for conflict of interest is higher.

A lot of companies (like Rackspace or my current employer) are adopting opensource into the enterprise more and more and encouraging employees to contribute to opensource during work hours.