The fact that the employer/employee relationship is so carefully controlled (specifically to limit the power the employer wields over the employee outside employment) is what makes me suspect that at least some jurisdictions would decline to enforce an employment contract provision that gave the employer ownership over all IP the employee produces, even if the IP is produced off-hours, without use of the employer's equipment, and not having any relationship to the employer's business.
Again, I don't actually know for sure - I'm not an expert in this area of law. But I think there is enough evidence in the rest of (U.S.) employment law jurisprudence to indicate that it's not open-and-shut in favor of the employer.
At issue is he says that what he created is within the realm/market of his employer. That would be akin to an Intel engineer saying "I designed another microchip for computers but I promise I was doing this for me and not for Intel so its mine." You cant do some work on specific sector A for your employer and then do some other work in specific sector A on your own and now expect the employer to ask, justifiably, "who decided the dividing line here?"
My apologies, I was responding to the question about why a court would find an employment contract provision unenforceable - we don't know what the OP's employment contract states (or if he even has one), so I was treating this whole line of inquiry as separate from the OP's situation. Didn't mean to confuse the issues.
Again, I don't actually know for sure - I'm not an expert in this area of law. But I think there is enough evidence in the rest of (U.S.) employment law jurisprudence to indicate that it's not open-and-shut in favor of the employer.