I think this needs to be fixes in law, not just in a court case. Some law that makes it explicit that employers have no interest in what you do with yourself when "off duty", and protects your privacy and dignity from your employer when you're not at work (or otherwise on the clock).
This is all good and well, assuming you are a well behaved person in your private time. Most employment contacts (around here anyway) have a clause that the employee will not do anything that will bring the employer into disrepute. This clause straddles the line between an employee's private and work time and often creates grey areas.
Yes, one should be able to do what they want in their own time - but if "society" (or my employers) disapprove and that activity makes the courts/news/gossip mill/rounds at the competitors they do want recourse to get rid of the staff member in question.
I am aware that this is a separate issue to the main point of this article.