To put this on another tack, could Walmart just say “If you have a second job you are in violation of company rules and will be fired”? Can they really dictate what I do on my off hours like that?
No, they cannot dictate what an employee does on his off hours. An employee should feel free to violate the handbook’s restrictions on outside employment without any fear that the Walton family is going to throw them in the Gulag.
However, Walmart might choose not to continue a mutually consensual employment relationship with that person.