In the States...
You have to sign a contract.
In the contract there are a couple of key phrases...
1) If any paragraph of this contract is invalidated then only that paragraph is invalidated and the rest of the contract as a whole is still enforceable. (Or something to that effect.)
2) If the company like IBM says that you can't work for any of IBM's customers, the paragraph is too vague and is in conflict with your right to work. So while that statement is in the contract, its unenforceable. Because the enforceability of this paragraph varies from state to state, its left in.
3) Companies then add a second separate paragraph which states that you can't go to work for a specific company X, and or Y, this clause generally is enforceable.
Again it depends on the state, court and judge to determine enforceability.
With respect to this lawsuit, it looks like Google has taken a page out of Microsoft's playbook.
(Hey! Its not evil, its *big* *business*. We would never do anything evil, right? Trust us...)
[That was sarcasm.]
You are right that you can't just create a payment system out of thin air overnight. And while it takes many months, you can always reduce the time it takes by hiring people who've already done it once before. Which is why a company will hire someone with the specific skills. The issue is that the person who left PayPal left with specific intellectual property developed at Pay pal for Pay pal. On the surface, the lawsuit has merit.