> "leaving your employer with their code"
From how I understood it, he didn't necessarily copy the code to his personal hard drive, only the emails.
> "he rewrote the technology ... from scratch"
It's a lot tougher to argue that there is a misappropriation of IP if it's a clean room implementation. Code IS the intellectual property here (often, this is even explicitly stated in the standard PIIA agreement).
Now, Zenimax's only recourse is possible trade secret misappropriation, which is much harder to establish in court, given the lack of tangible evidence in the form of copied code.
That said, the State of California is particularly protective of workers' rights in this latter scenario, non-compete agreements are actually banned here.