It's not a trade secrets case. Zenimax wasn't in the same business. Zenimax are claiming that they own everything he did while employed, thus, Oculus IP is zenimax IP. Typical tech company lawyer BS.
This is why you sign an exclusion clause when you start anywhere. I don't know why this is so crazy. Salaried employees are paid regardless of hours worked, which means that you are technically always employed, regardless if you're expected to be working.
If you're paid hourly, then there's a clear demarcation between working hours and not, being a salaried employee blurs that line. That's why many states have regulations as to who can be salaried and how.
"Salaried employees are paid regardless of hours worked, which means that you are technically always employed, regardless if you're expected to be working."
I don't know what third-world despot you've gotten stockholm syndrome for, but that is absolutely not true. Salaried employees can, and often do, have second jobs, run their own businesses, from restaurants to real estate ventures.
You are not the property of your employer. Salaried employment is an arrangement which cannot legally demand more than 40 hours of you. It often does, but I'd actually argue in those cases that the agreement is in breach and not binding at all.
Just because some states have stricter guidelines on how these lines can be drawn does not mean that you are ever the property of your employer.
From the DOL: "Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work. Subject to exceptions listed below, an exempt employee must receive the full salary for any week in which the employee performs any work. "
Salaried employment isn't contingent on any hour requirement whatsoever. I could work 1 hour a week and still legally qualify for my salary. My employer could give me enough work to require that I stay in the office for 80-100h, and I would have to do so to fulfill the job duties.
I in no way stated that exempt employees can't have other employment. I have always maintained a consulting practice while working - what I can't believe is that people don't get it in writing that they are doing this, and carve out the things that their employer doesn't get to touch. Exemption/Exclusion clauses work both ways. It avoids this situation altogether. For a computer professional who branches out into other semi related tasks, I would consider this essential. Plus, I think that there's a large difference between something completely out of your field (like the real estate and restaurant ventures mentioned) and another software/gaming company.
I've had employers make me sign contracts that strictly forbade moonlighting and anything I developed while employed there belonged to them. I no longer work there, and don't sign agreements like that anymore, but they exist and aren't terribly uncommon.
That's one interpretation, and one that the lawyers would like us to buy into.
Another is that this is simply morally wrong, and we shouldn't accept that simply being salaried implies that all intellectual work you do is owned by the employer.
This is a matter of convention, expectation, and interpretation, not rules. Powerful corporations are fighting for the interpretation that most benefits them at the cost of those who are weaker. That's not crazy; it's wrong.
Most exclusion clauses are narrow -- limited to work you do in line with your companies current or imminent business interests or done with their equipment. When they are not they are unenforceable in most states, especially Texas which does not look fondly on companies keeping their employees from the market, surprisingly enough.
Not to mention that Carmack was an employee of a company he owned, id, that was later acquired. I doubt he even has an exclusionary provision that he'd signed that was anything but very friendly to how he likes to operate if at all.