I'm in this exact situation right now where I worked as a developer for a small company. I did a side project, and they demanded I hand over the project so they

I'm in this exact situation right now where I worked as a developer for a small company. I did a side project, and they demanded I hand over the project so they benefit from it. I refused, and we are deep in a costly legal battle. But it is a matter of principal that I won't let those a*holes benefit from something I did at home, on my equipment, without any of their IP, and unrelated to the work I did. I can tell you I've learnt a valuable lesson and will never sign an generic software development employment contract like that again.