1. if you are developing something, even tough as side project on your offtime, it is usually own by the company you work for (it will be on your employment contract most of the time)
2. On the other hand, if you think you can make money on your project, and based on what i heard in_California
http://en.wikipedia.org/wiki/Non-compete_clause#Exceptions_-...
Non-compete agreements are automatically void as a matter of law in California, except for a small set of specific situations expressly authorized by statute.
3. but the company is going to argue that you get the idea of developing the side project based on your current project
4. so at the end its a matter of getting what you want from the company vs. making the situation into a terrible one.
You can ask for promotion with more money, or options and even run the project as a stake holder.
that all depends on how you and your company react to each other.