I used to do this at IBM on a regular basis. "Hey manager, I'm working on a Twitter mashup for the Super Bowl. Pretty sure you guys aren't interested. Can I get that in writing?" It was never a problem in that respect. (in California and IANAL)

I dunno. I tried to do this at another big 4 consulting firm and basically got the runaround. Nobody wants to put that in writing because if your stuff does happen to take off, nobody wants to be the patsy who let that get away. Basically I lost 6 months of time because they stalled. In the end I didn't get anything in writing. My immediate managers just told me that it's a don't ask don't tell and not bother wasting your time.

they have no incentive to give him a waiver.

That's pretty much my concern. I have thought about approaching them, but we're talking about a huge amount of bureaucracy. I'm sure my managers would be totally cool with it, but my manager's manager's manager wouldn't even have the authority to approve it.

So I'm left debating whether I have anything to worry about in the first place, or whether I should start working through all that bureaucracy.

Thanks guys! Looking forward to any more insight or if anyone else has been through this situation before.

I've heard stories of employers who have told employees shut down your side project or you're fired. I don't mean to be pessimistic, just make sure your project is non-competing and in line with their standards of ethics and values.

Getting a signed piece of paper is probably the best thing you can do, and it's probably possible depending on the company you work for. But you probably need to be careful about the way you approach doing so.

that's not totally true. If you are a good contributing employee, your employer has every reason to keep you happy for as long as you are an employee. If your management is mature enough, they would be happy to extend a waiver. (I know people like to bash their management a-la Dilbert, but there are some good managers out there)