I agree with a ban on putting it into an employment contract, however I don't agree with them being banned completely.

I don't think my getting a job should hinge on if I agree not to use my knowledge for my own best interest. If a company wants to offer me something that (from my perception) is of better interest to me than competing with them, then I'd possibly sign it.

If it's that important to a company that I don't compete with them, they should be willing to pay me enough that I have an interest not to compete.