My company is trying to pass a policy forbidding distribution of any application (even free) in any appstore for all developers.

Their reasoning is that "outside work activities create a conflict of interest". They don't want that "you use your spare time to work on your app, and once it takes off you quit your job" (quoting the Head of Development).

A few developers (myself included) have already said it was an abusive, pointless and most of all counter-productive policy (developers will actually be demotivated to work here under such control and to be denied of the freedom to distribute their project).

Personally, I think it is actually in the interest of the company to promote side projects (even commercial activities, if there is no conflict).

I'm also curious, is that common practice?