According to the article, Lee was able to launch and his own startup for a year, while still working full time as a product manager at Tesla. Would most startup or startup-like (trying to reach stable profit) companies be OK with that?
I encourage everyone to push back against wording that is more restrictive than that. In fact CA (and I believe WA as well), it is unlawful for employers to be more restrictive than that[0]. Employment shouldn't make an employer the owner.
Tesla had no legal leverage whatsoever to ask for a cut.
[0]: https://californiaemploymentlaw.foxrothschild.com/2015/03/ar...
It's the equivalent of saying we should all get kudos for not stealing from each other. You've made the act of stealing the baseline for moral judgment rather than the reprehensible exception.
https://blog.usejournal.com/how-we-made-1m-in-3-months-the-s...
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If he doesn't fulfill his duties they can fire him. Otherwise it's not their business what someone does in his free time.