[wmu]

The sentence in question is misinterpreted. I read it like this: our contract applies all the time, not only when you're directly working for the company. We don't know what the contract exactly says. Likely there's an agreement not to work on IBM-related products in spare time.

[saagarjha]

California law overrides illegal contracts. However, in this case such provisions would be legal as the sibling comments point out.

[gher-shyu3i]

Why only CA? Shouldn't it be that "the law" overrides illegal contracts - basically a tautology? Otherwise, what's stopping anyone from writing illegal contracts and forcing the other party to abide by them?

[__jem]

Because the basis of every state's contract laws are different. Something are illegal in CA but not in NY.