i think it’s fair, you’re not restricted from trading other companies. this prevents unethical people from taking advantage of insider knowledge.
Obviously, restrictions on "restricted insiders" driven out of federal law exist... but I'm referring to restrictions that would prevent you from programmatically hedging your employment risks. You're not going to have an insider trading problem from such a program.
As far as fair goes-- it's fair if they compensate you for the loss of that freedom, otherwise it isn't. It's up to you to figure out what compensation is fair.
Employment is an extremely large undiversified risk. Through no fault of your own the company could go tits up with little notice, leaving you seeking new employment at the same time as many other people. Unemployment benefits are a rounding error for highly compensated employees. For good reason, you're generally prohibited from having alternative concurrent employment which would be the obvious way to reduce employment risk. It's prudent to take actions to hedge this risk. If the company takes one of the avenues off the table for that they it compensate you for or provide an alternative (like a good severance agreement).
I've not seen that before. How is the rule structured? Can you buy otm puts?
I can't really imagine that a formulaic program, established in advance and rigorously followed could possibly run afoul of insider trading rules regardless of your position at the company.
Something like: "In order to hedge my undiversified finical interest in X: While I am employed at X, on days A and B each year I will purchase 1 year puts with strike at 50% of the spot price (or the next higher price available) with Y% of my take home pay and either hold them until the expiration date, until they produce a return of Z, or the time of my choice if my pay is reduced or I stop working at X."