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I suspect that it is in the handbook because some lawyer told him that it was necessary to prevent a possible lawsuit in the future.

Maybe you can come to some sort of gentlemen's understanding with him, but if you do, make sure that you have something in writing to protect you froma possilbe lawsuit in the future or dismissal from the company due to carrying.

For an extra $10k a year, it's certainly worth lookng into. You're in a great position right now as you can say no and you don't need the job or the money.

Let us know how it turns out.