It is called a moonlighting policy, and I suspect they do hold up. Microsoft had that policy in place for decades. They didn't outright ban moonlighting, but

It is called a moonlighting policy, and I suspect they do hold up. Microsoft had that policy in place for decades. They didn't outright ban moonlighting, but you did need to have a formal agreement with your manager. I think they softened it a bit only to encourage employees to build apps for Windows Phone. I say it probably does hold up because otherwise I am guessing they would have abandoned it. Microsoft has quite a bit of experience with labor dispute litigation. Having billions in cash is like chumming the water for labor law attorneys.