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To me (not living in the US and some other countries), it is weird if it's legal even if it's in the employment contract.

The idea of companies having the power to decide what it's employees can or can't do OUTSIDE of the company seems absurd.

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I have seen these kind of prohibitions at for example Nasdaq OMX. I assume it is legal if it is agreed in a contract. There is a balance here what might be a "human right" and what could be in conflict with the best of the company -- and it would seem reasonable for a company to try this. If they will find people willing to sign that contract is another matter altogether.

Edit: typo

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