Replying to my own post but whatever:
I see this as discriminating against folks for what they do in their own home on their own time. It's an invasion of privacy, walking hand-in-hand with unlawful search and seizure, i.e. drug testing for employment purposes. California wants the tax revenue, so for purposes of commerce, federal law sets in the background. Like laws against spitting on the sidewalk that don't get enforced unless someone's looking for a reason to nail somebody. And it looks good like "Hey, we respect states rights!"
But companies get to use federal law to invade employee privacy, and use it to deny employment at their own discretion even. You know, like giving a guy a spitting-on-the-sidewalk ticket just cuz you don't like his politics, religion, or what he does in his/her free time. You still get stuck paying that citation, citizen.