Does your code closely resemble something the company you are working for have? Are you developing something otherwise not thought about except by your employer? I mean the answers should be simple. Since you are not working on their dime and using your own time, that isn't a problem. However, if your code is looking awfully similar to what they are working on (doesn't have to be exact mind you) and they have a patent on their work, yes they can come after you.
If they are working on an Mp3 player application and you so happen to decide on building one too with similar features or a similar name or something similar to theirs, all they have to do is say that you are infringing on their patent or taking trade secrets and you can get in trouble. Now if they have no patents on their work yet and you come out with your own work similar to theirs before they do and file the patent, you win.
But you really need to stop and think a bit here because if there is even a doubt in your mind, it usually means you know you are doing something fishy. Just don't do a project similar to your employers and make sure you are working on your own time and you have nothing to worry about.
Oh and just so you know, if you are on break or on your own time and using their equipment or software, they can come after you then also. Everything regarding your project should be yours (your tools, your time, your ideas) and there will be no issue.
This post has been edited by Martyr2: 7 Sep, 2009 - 04:10 PM