And by his own description he already had that idea and wrote some code while being employed. That won't help his argument that he can license all the code.
depends on the way his employment terms were worded. some let you have the things you create on your own time, some claim ownership of everything you do during your employment (with none of the payment, responsibility, or liability that can often go with some of that stuff, of course), and some just want the stuff you write while employed that could be useful for your work efforts.
in all cases, always claim that you simply do not author software outside of work hours. even if you write a million lines of code at home, off hours, and they get the cops to take your PC as evidence, deny deny deny. if they can prove you wrote it during off hours, take a defense of "how can my employer own my free time or the work I do on time I am not paid for," or something like that.
that door should work both ways, and does if you say it should. if they want your personal time, tell them they need to pay for that time. they need to supply you with a computer they own, a network connection at home that they pay for, a good, ergonomically sound chair and desk, coffee/soda provided free and all that. filtered air, etc. all the trappings they have at the office. asking for all that is how I maintained ownership of all the code I wrote. they didn't want to do any of that, so I asked why they thought they should be able to reap benefits from work they do not support.
there is probably a first amendment argument, too, if this chap is in the US.
I am not a lawyer. don't listen to me too much.