Sorry, but I am an absolutist on this.
Businesses are giving you a line of BS. There is adequate protection for their legitimate interests in trade secret and other intellectual property law, and in allowing non-poaching agreements, which are very legit. But limiting the livelihood of an employee — their ability to use the generic knowledge and skill about a field, skates perilously close to — sorry to say it — involuntary servitude — yes, that is slavery.
I just went through an intensive exercise in this with an employer, and I found that all his legitimate points were covered by intellectual property law backed up by specific agreement and non-poaching (I can’t take your customers with me) agreements. In the end, I gave in with a very limited business-non-compete, that is, I agreed not to set up an actual business, with advertising, that competed with him for one year (he wanted two). But I would not agree not to sign on as an employee with a competitor or to ply the knowledge he thought he was giving me — but actually wasn’t, it was actually more skill than knowledge — by word of mouth, without advertising.
Bottom line — employees do not compete, businesses do! Any remedies in law should express that principle. Limiting a person’s right to employment of her or his choice blatantly violates it.
So, what’s wrong with the California approach — except of course that you’ll have lots of businesses mad at at you. But frankly, the current system leads to many serious problems for employees who are not 1/100 as well organized as corporations. The case you cite is but one example.
California has a great idea here — let’s get as close as possible to that ideal!