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I work on my side project every spare minutes I have. Tools that I create on the side have benefited my employer so much. If they were to give me a hard time it will be their loss. I can always quit and work in my own, smaller pay check but you get peace of mind.

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Problem is the agreements were discussing typically have a 'non-compete' for a period of time. So you can't create anything that resembles work you were doing at your employer for typically 2 years. For this reason :)

If you really wanted to pursue it, you could probably force them to explicitly define what the mean by 'compete' (thereby narrowing what they can come after you for), or else give you compensation for the period that they want you to be excluded from working. It might take some legal maneuvering though.

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