Your understanding of CA labor law is a bit off. Employees cannot have a side business that competes with their employed business. E.g. if I work for Salesforce

Your understanding of CA labor law is a bit off. Employees cannot have a side business that competes with their employed business. E.g. if I work for Salesforce, I can't make a side project that does sales client / customer tracking. But I could make a Twitter clone and market that. The IP protections are important because they mean that anyone can actually start a business, let it grow on the side, then, when ready, jump ship. All of this without fear that your employer, who is doing nothing for the side business that you're working on, will come and take it all. This key piece of legislation enables most of SVs success.