The headline kind of has the valence of government activity backwards, though I agree with its policy proposal. Other states don't restrict job-hopping, they just stand by and don't interfere as the free market ends up having the effect of restricting job-hopping. Employees end up signing restrictive employment contracts, and states don't prohibit them from doing so. California has made a conscious decision that the…
By the same reasoning, if I sue you for defamation for calling me a lamebrained chucklehead, courts refuse to entertain the suit because the government won't restrict free speech. You're entitled to express your opinion, and the government won't assist me in suppressing your speech.
In many states, the government is happy to assist employers in restricting job-hopping.
I take your point that this government activity has its immediate catalyst in private actions in the free market, and that's different in important ways from other government activity. But still.