Offering a contract with whatever stipulations to a potential counterparty that he can sign or not sign on his own accord is competing. Forbidding your counterparty from putting certain stipulations in their contract by using government intervention is not.
If they limited the vendor's (i.e., employee's) options, how is the being competitive?
And if the market colludes to handcuff vendors (to the benefit of the hiring companies) how is that being competitive?
Employment is already at will, and that is mutual to both parties. Why should one side be allowed to purposely disadvantage the other side? How is that being competitive?