IANAL.

It's in pretty much every employment contract in the software industry. Washington has code 49.44.140 which makes such terms unenforceable unless:

>(a) the invention relates

> (i) directly to the business of the employer, or

> (ii) to the employer's actual or demonstrably anticipated research or development,

>or (b) the invention results from any work performed by the employee for the employer

California has section 2870, which is almost identical.

The problem is that those terms are vague enough that they can be construed to apply to pretty much any software. The big companies have varied enough business that (a) is hard to get away from, especially if it's Web based and you work for Amazon/Google/Facebook, and software techniques are generalizable that they could probably claim (b) as well. As a result, all of those companies have various internal processes to request that the company either release IP for side projects or allow it to be open sourced with the company as the copyright holder but the employee listed as the author.

This clause was the sticking point of the last employment contract I signed. I tried to insist that they separate the compensation they were offering me into the portion for my general employment and the portion for these outside ideas so that I could decide which to accept. They never would do that, but I ended up getting a 30% higher offer through this negotiation.

"The problem is that those terms are vague enough that they can be construed to apply to pretty much any software."

Bingo. Amazon has it's fingers in everything. Games, machine learning, language development, OS development, distributed computing, general algorithm development, video... It's pretty much impossible to find anything that doesn't "compete" with the company.