If any employer gave me instructions on what I can and cannot do in my spare time, I would tell them to stick their job where the sun don't shine !
Unfortunately in most cases the employer has a better bargaining position than the employee, especially during economic downturns.
I've only worked for one company myself that trying to force down a draconian set of rules like that, but was lucky enough that all employees refused to sign the forms in question so it just kind of fizzled out.