How can I politely say "no way" while still getting the job?
Don't go into reasons, or get into a philosophical debate about it. The only time I've given an explanation was for a volunteer gig where I refused to sign an NDA at all, and had to explain to the coordinator "We can either be employee and employer where you pay me a lot more money then you have, or we can be two buddies working on a thing for free. We can't be two buddies where one guy has a contract against everyone else."
Agree with that. Never explain your reasoning without being asked. It makes you look weak.
I said that once to someone about a liability clause that would possibly have cost more than I'd make there.
He started accusing me of attempting to sabotage his business and was very angry.
I just left. So glad I found that particular bombshell before I signed anything.
Or tell the HR person you'd like to have some time for your lawyer to review it. Come back with a refusal or just strike out the lock-out terms, or change the duration to something you can accept (1 year -> 30 days), etc.
Say this pleasantly and most HR types will accept it. I've had to walk away from a few offers, but most (maybe 4/5) firms accept my concerns with some version of "I understand."
It's my experience that large corporations are more likely to be rigid and insist you sign it, which is your first warning that it's probably not a pleasant place to (literally) spend your life.
Just speak to your future line manager and explain that you have returned a modified version of the contract and that you hope that they will agree to it soon because you are really excited to start working.
However, I've found on the couple of occasions where (non-reasonable) NCAs were presented to me that simply claiming that the terms as stated are not acceptable and that a revised NCA must be prepared if I am to sign it results in a shrug and a 'Whatever. We'll just skip it, then.'
Now, if they'd stood their ground, I'd have had to look elsewhere. (I am not a big fish - just a lowly engineer who do some management on the side - so they didn't waive the NCA for REALLY wanting me to come aboard; more from reluctance to go through all the hassles of either doing another hiring process OR amending the NCA.)
(At a former employer, the NCA basically stated that anything I ever thought of, be it at work or after work, in my field of expertise or in whatever unrelated field, belonged to them. Oh, and this obligation extended past the termination of employment for a period of time decided at their discretion. Not enforceable in the least, but still...)
If the candidate accepts the contract as it is the company wins.
If the bargains around clauses it's still OK and having many clauses to drop makes it look like the company is being flexible.
Always push back!
The presence of the clause that requires rejection is itself a lesser warning, but not necessarily cause for immediate alarm.
The whole premise behind the outrage is alien to me: any contract that you're presented with is just the first step of negotiation. Of course it favors the author. Present them with an alternative, and then, step by step, you come to a compromise.