I find it hard to believe that anyone would fire someone doing great work as a programmer no matter what they were doing on their own time.

The key is -- did you honestly give it a full day's work at your paid job? On your own time means literally -- on your own time, on your own computer. I'm not asking you to answer here -- answer for yourself.

Then, just give a reference from any other past job. Yes, employers that ask, check -- especially recruiters. You can't send them someone who will say anything bad (e.g. He worked on side projects during work hours). The point is that people that will vouch for you exist -- not exactly what they say.

EDIT TO ADD: I always disclose all side projects at the interview at some point. It has never been a problem. I also amend employee contracts that prohibit working on anything else to say "during work with work equipment" or some equivalent I have a lawyer draft.

I would say your general characterization of east coast employers is fairly accurate, although I am not sure if it differs from west coast employers. But on the East Coast it appears they really frown on side projects and most will even try and make you sign agreements stating anything you invent, code or otherwise work on whether on their time or yours is their intellectual property. I have seen so many of these it blows my mind. East Coast businesses seem to think they own you more than it at least appears happens on the West Coast, but again, I may be wrong. A friend had me look at some paperwork (NDA etc) a startup here on the East Coast gave him as part of his offer letter. When I read it I was alarmed it basically said they would own anything he did that involved software development, even if he had priorly invented it, including that he would have to assign prior related or new patents to them. I am not even sure that is actually enforceable but I told him I would never sign that.

As for your experience and reference questions, relating to Software positions specifically. I personally do not call any references, I judge people based on how I feel when talking with them. Plus I feel that most times reference calls are liability focused where you get standard answers to standard questions and nothing more. I have had less than a ten calls to me for reference checks in the past 4-5 years on employees that have left, which I have had far more than ten on my teams leave. So I don't think a lot of people call them either.

I also don't care if I see references on a resume, in fact, I kind of prefer not to see them. If it is important I will ask you.

When you say that you have been let go after people find out you have a side project. I honestly haven't seen that, unless the side project is interfering with your daily work, or has some conflict.

That said, I will say as an employer I was recently burned by a few employees each having their own side project that they were working. I found they were really quite distracted and I knew their output was very good previously to their side projects. I saw the degradation in their abilities, performance and they were just not delivering even though they felt and would argue they were still giving me 100%. I can't say they weren't giving me 100% but the 100% they were giving me was 60% because they were over tired and distracted. They were constantly thinking about their own project more than the one I was paying them for, and it became more and more obvious as time went on. So none of them are with me today. So maybe your impression and your previous employers differs, if you are friendly with anyone still there maybe ask for some honest opinions from co-workers.

They were happy before they knew, and unhappy after. But presumably the output didn't change.

I mention asking someone only because many times we feel and see things one way but others see it differently. He may feel his contribution didn't suffer but maybe it did and he equated the failure to his employer learning of his project rather then his performance. It may not have even been with side work, could be anything.

Also happening once is one thing. Multiple times means you really have to look at the common denominator in the situations and see if there is more to it.