It's not thuggish. It's merely a bad deal. It's a bad deal for the company too, since they will have to compensate people more for their level of skill in order to make up for it. It's also ridiculous of the company to think of creativity as zero-sum like that (e.g. what if he watched TV instead? Now no one benefits), but even if it was, creativity on personal projects is of asymmetric value -- the employee no doubt cares more about that time than the employer could plausibly benefit from it -- so it's an especially inefficient thing for the company to negotiate for. All this suggest the employer was being dumb and missing out on a hire for no good reason.

Dumb but not thuggish. In fact the view that it is thuggish is feudal, since it implies that the employers are lords handing out favors and punishments to their subjects below, and thus have a duty to be fair and compassionate about it. But the employer is really an equal at the negotiating table. Some people argue that capitalism can be coercive in the relevant way (a point I have no wish to argue for or against here), but it's demonstrably not true in this instance, since Braithwaite was able to walk away from a crummy deal. No doubt the employer was worse off for it. That's how it's supposed to work.

I wouldn't ascribe malice. Most companies usually do it because the it's the safest way to avoid a legal fight. The more detailed and convoluted the contract becomes the more expensive and time-consuming it becomes to adjudicate. How do you decide whether a 'side-project' is related or unrelated to the work? It's easy to point out obvious cases. (E.g. "I'm a coder and I design a mini golf course for my buddy") but the reason why a company institutes these rules is not to take possession of your IP in these cases.

While that in and of itself is problematic, the real objection in the post you're replying to is the "I don't know that I want to hire someone who does creative things outside of work". That's well beyond being defensive in your contract structure.

I've always seen this simply handled by disclosure:

* At hire time provide a list of "my ip" and "ip from previous employer that may be controversial here"

* At personal project start time, get a document signed from management saying "this is not related to $employer, and does not count as related work"

* At exit time (particularly when there is post employment IP or non-compete) get a document agreeing that "this IP was from the employee to the company, this was not.

It sounds like a bureaucratic mess, but it's like 10 minutes of hassle here and there, and saves a bunch of issue, even in the future if say, the company gets bought out and the new owner has different views.

How expensive and time-consuming is it to get all the way through the hiring process, just to have every developer with a clue say "fuck this, I'm not signing"?

The actions described by the GP are not the culmination of deep legal rumination on the topic.