
Amazon sues employee for taking Google cloud job, in new test of non-competes - _pius
http://www.geekwire.com/2014/amazon-sues-employee-taking-google-cloud-job-new-test-non-compete-laws/
======
luu
I was just talking to a friend of mine at amazon, who said that a lot of
people (including some pretty high-level people) thought prosecuting the one-
click patent was a mistake because it actually made it harder to recruit.

That's nothing compared to this. Seems like a classic case of the left hand
not knowing what the right hand is doing.

~~~
smackfu
I think the "must relocate to Seattle" makes it really hard to recruit.

~~~
hatred
Not Really, considering that they have opened offices in the bay area
exclusively for AWS openings.

------
chris_mahan
Amazon, sorry, but unless you're paying his salary to sit at home, you're just
whining because Google offered a better job.

You could have kept the guy, if he was so important to your business.

I'm not a happy Amazon Prime customer today.

~~~
actsasbuffoon
Exactly right. The best way to keep your talent from working for the
competition is to keep them working for you.

------
bcantrill
This is a pattern for Amazon: I work for a competitor to Amazon, and they went
after us for violating a non-compete after we hired an AWS engineer. Our
counsel had reviewed the non-compete before we hired the engineer, and
concluded that the non-compete didn't _actually_ prevent an engineer from
working for a competitor, but rather prevented much narrower activity like
poaching customer lists or supplier relationships. We were somewhat surprised
that Amazon aggressively pursued the matter because it seemed so obvious to us
that they wouldn't prevail. After Amazon sent us (and, it must be said, the
engineer personally) a very nasty letter claiming that the non-compete was
being violated, we retained local counsel and sent them an even nastier one
back, making clear that we had no intention of backing down. Ultimately, they
backed off, but in this process, I learned that Amazon has pursued this
particular non-compete "hundreds" of times, and has never (to the best of the
knowledge of our local counsel in Seattle) prevailed once. In part this is
because Washington allows non-competes, but also doesn't like to infringe on
the free flow of labor -- temporary restraining orders preventing an
individual from working for a company are extraordinarily rare. (This is in
contrast to states like Texas and Massachusetts, where non-competes are
infamously enforceable.)

So if Amazon never prevails, why do they do it? One of the peculiar attributes
of Amazon's action against us is that it was well publicized _within_ Amazon
-- and was apparently a result of outrage by a high-ranking executive after he
learned that the former AWS engineer not only was working for a competitor,
but had the gumption to open source a technology that he developed here.
(Ironically, the executive only learned of all of this when the technology
itself became a top story here on HN.) My conclusion from this: this action
wasn't _actually_ directed at us -- Amazon is smart enough to know that
nothing would come of it with respect to our actions -- but rather at _their
own_ employees. That is, Amazon's pursuit of the non-compete against our
engineer was their way of shooting an escapee in the back -- and sending a
sharp message to any other AWS inmates with similar ambitions.

In terms of an immediate effect, Amazon's move worked to a degree: our next
few hires from AWS were slowed a little bit by fear of similar action. That
said, the fact that we had prevailed against Amazon also gave these engineers
the confidence that we could and would do so again -- and ultimately, it
didn't prevent anyone from matriculating. It did, however, have one lasting
effect: the engineer that was pursued went from thinking fondly of his years
at AWS to hating AWS and Amazon with a white-hot passion that still burns
today. In the end, enforcing a non-compete is like erecting a Berlin Wall: if
you feel you need it, you have much deeper problems...

~~~
Fuxy
I still can't believe Americans are ok with non compete clauses in their
contract if you accept that crap somebody will eventually try to enforce it.

I personally think it should be illegal unless amazon volunteers to pay the
employee his regular salary for the period he is not allowed to compete.

The same way that if you're not paying for a service you're the product if
you're not paying your employee you should have no right to demand anything
from him anymore.

~~~
psykotic
> I still can't believe Americans are ok with non compete clauses in their
> contract if you accept that crap somebody will eventually try to enforce it.

These and other anti-employee clauses (e.g. excessive IP assignment) persist
because many programmers simply don't care while others who do care are awful
at negotiating compared to their interlocutors who do this for a living. When
you try to push back, the standard response you will first hear, an outright
lie, is that this is a non-negotiable mandate from their legal counsel and
that no-one has ever complained before. If they do budge on their initial
terms, they will make it seem like an unprecedented concession that warrants
concessions on your end. It's a truly absurd game of back and forth.

~~~
danielweber
_When you try to push back, the standard response you will first hear, an
outright lie, is that this is a non-negotiable mandate from their legal
counsel and that no-one has ever complained before_

I'll agree they'll act like it's totally weird you are complaining. Standard
salesman techniques.

And companies will usually negotiate these. Usually.

I once had an otherwise nice job offer where the employee agreement contained
the following three poison things:

1\. you cannot work for any competitors or customers for a year (it was a
consultancy, so potentially every employer in the country was off-limits)

2\. you assign us your IP rights while you work for us _and for a year after
you leave us_

3\. you agree this will not limit your ability to find work.

They totally stuck to their guns. They said legal wouldn't let them change it.
I had concerns and they "took the matter seriously" which amounted to telling
me, really hard, that these clauses didn't _really_ matter and they wouldn't
enforce them, and, y'know, they probably weren't enforceable anyway.

I walked away. Apparently many other people don't because they continue to get
new employees. I heard the horror story here on HN a few weeks ago [1] about
someone who no one would hire because he signed something with clause 2. I'm
more satisfied than ever I was right in walking away.

[1]
[https://news.ycombinator.com/item?id=7921325](https://news.ycombinator.com/item?id=7921325)

~~~
psykotic
Turnabout is fair play. If they pretend a clause is non-negotiable, call their
bluff by asking for fair compensation. "Sure thing! That means I will be off
the job market for one year, so I will require an unconditional severance
payment of one year's salary. If my employment ends before an agreed-upon
period, neither the severance payment or the non-compete will be binding." I'd
only consider this kind of hard negotiation for mercenary jobs. If you're
joining a normal company as a normal employee and they stonewall you on
reasonable concerns, take it as a sign and walk away, as you seem to have
done.

~~~
pessimizer
If everyone is aware of these clauses, their implications, and their
enforceability (in the hypothetical world where computer workers have any sort
of group that represents and publicizes their interests _as workers_ ),
they'll end up priced into wages as long as employers don't collude.

------
nostromo
Governments are always trying to find a way to steal a bit of the magic of
Silicon Valley, yet little attention is paid to copying California's stance on
non-competes. It allows for a free-flow of talent that is just as important as
the free-flow of capital. Washington State should copy _that_.

Hilariously, in Washington State, you can even enforce a non-compete when you
_fire the employee_.

~~~
tluyben2
I'm not sure what the laws in CA are exactly, but here (EU) non competes don't
work generally. If you are a programmer and you go work as a programmer for
the competition then even if you signed stacks of non-competes, they cannot be
enforced. Simply because you are a programmer and not allowing you to take
that job would mean you are potentially without a job which is about the worst
thing that could happen. Most non-competes refer to you resigning and taking
clients with your but even that is hard to enforce. The basics are ; if you
are a nice company to work for and with, you have nothing to fear.

~~~
glandium
I know first hand of a few cases of non competes working (in France), and they
all involved the ex-employer paying substantial amounts of money for the time
the ex-employee was prevented from working for the competition.

~~~
amirmc
Also known as garden leave. You're basically still 'employed' but you're kept
out of the office with all access revoked. It's to put some distance between
any time sensitive info from one job before you move onto the next. In the UK,
I think the banks do this for three months.

[http://en.m.wikipedia.org/wiki/Garden_leave](http://en.m.wikipedia.org/wiki/Garden_leave)

~~~
danielweber
From discussions on HN, this is also common in the US finance sector.

------
electic
Apparently working at Amazon is damaging to your career.

~~~
hatred
Ex-AWS employee here. I tend to disagree with the above statement. Though,
their retention numbers are pathetic to say the least, but it was an awesome
place to work and learn and most of the people who do leave tend to go to the
high flying places.

~~~
potatolicious
Ex-Amazonian here also. Sadly, Amazon looks _great_ on your resume, it's still
considered in the "AAA" tier of tech employers, standing side by side with the
likes of Google, Facebook, etc.

Realistically I'd argue it's more on the high end of the "B" tier, but that's
neither here nor there.

Amazon's attrition rate is insane. Not high, _insane_. This should tell you a
lot about what it's like to work there. I too learned a lot, and it continues
to pay dividends on my resume, so I guess that's how they get away with it.

------
AceJohnny2
One key item:

"The suit, filed June 27 in King County Superior Court in Seattle, seeks to
take advantage of a more favorable climate for non-compete deals in Washington
state, where the terms of such deals have generally been allowed, if
considered reasonable. Non-compete clauses have repeatedly been found invalid
in California, where Google is based."

The article doesn't say Szabadi was or currently is geographically employed
(is his current contract with Google in California or Seattle?), which I
assume would have a bearing on the suit's strength

~~~
dctoedt
There's likely to be a certain element of race-to-the-courthouse here. If
Szabadi is about to move to California, then Google could file a lawsuit in a
state court there, seeking a declaratory judgment that under California law
his non-compete is unenforceable. A California court likely would rule in
Google's favor --- and if that were the first-filed lawsuit, then it might
take priority over any later-filed lawsuit Amazon might bring in Seattle.
Something akin to that happened in _Application Group, Inc. v. Hunter Group,
Inc._ , 61 Cal. App. 4th 881 (1998) [1] [2].

[1]
[http://scholar.google.com/scholar_case?case=1290227502038697...](http://scholar.google.com/scholar_case?case=12902275020386975222)

[2]
[http://www.whitecase.com/files/Publication/dcf3d85c-1c1b-4bf...](http://www.whitecase.com/files/Publication/dcf3d85c-1c1b-4bf5-9806-7a04e2b0e214/Presentation/PublicationAttachment/d734c538-402d-4648-b778-80e6a224b192/article_enforceability.pdf)

~~~
bsimpson
Don't agreements like this typically include language to the effect of:

"This agreement is entirely enforceable under the laws of the state of ____,
under the jurisdiction of a binding arbitrator chosen by the employer, except
for injunctions which are handled by the ____ District Court in ____ County?"

~~~
justincormack
Those clauses might not be enforceable though, if they contradict local labour
laws.

~~~
danielweber
Yes, otherwise it would be trivial to override labor laws via contract. For
all they seem like dolts to us, this isn't the administrative class's first
barbeque. Attempts to end-run around the law are regularly shot down.

------
btgeekboy
As much as I am not a fan of non-competes, having read the complaint, it
appears that this is the exact reason non-competes exist. This isn't about an
Amazon SDE that worked on the amazon.com retail site moving over to work on
Gmail; the guy was responsible for working with AWS partners, and now works in
the exact same position for a direct competitor, in a position where external
contacts and relationships are key. Google even recognized this with their own
agreement not to use that information for a period of 6 months.

~~~
neumann
I was under the impression that non-competes were legally implemented _not_ to
stop employees moving, but to stop an owner from selling a business with
goodwill, and then starting up a competitor across the road and reducing the
goodwill be retaining their old customers. I have no evidence, but had assumed
that the modern non-compete enforced on employees by employers came out of a
precedent based on this law and has slowly gained acceptance. Happy to be
educated if somebody knows more.

~~~
PeterisP
Nope, provisions for _that_ are in M&A agreements and part of the reason why
acquiring companies takes so much money and [lawyer]time. And it's in no way a
"precedent based on this law" \- what do you mean by "this law"? All of these
provisions are in private contracts, not in legislation.

The classic use of non-competes is for salespeople or high-level service
people (lawyers, consultants, etc) not taking their customers with them when
leaving.

------
rdl
I've heard a lot of negative things about Amazon as an employer (mainly from
current or ex-Amazon people), which is depressing because they're an awesome
vendor and I want them to continue to be able to get great people and thus
produce awesome stuff. (I've also heard "but X group is awesome and not like
that" too, though.)

This really doesn't help things on that front.

~~~
dsugarman
they are a great vendor by facade, they bully and collude with their suppliers
to drive up prices on consumers. they systematically bury competitors with a
trojan horse strategy on their marketplace. using dirty tactics and infringing
on anti-trust, they can always appear to be the best vendor to consumers.

~~~
rdl
I go to a relatively well designed website and get products delivered in 1-2
days for cheap. From that perspective, I really like them.

AWS, while absurdly expensive vs. metal IMO, is also something a lot of people
have built on, and it's evolving so fast that no one has caught up to it, even
when companies like Rackspace, IBM, etc. recognize it as an existential
threat.

------
logicalgator
TLDR of my comment: always ask to see employment agreements you'll have to
sign before accepting an offer and resigning from your (now current) company,
otherwise you may not know what you'll be expected to sign until your first
day.

In response to several comments stating or implying that you can simply not
sign or negotiate a non-compete, I agree, but I think it's worth pointing out
that, at least in my experience with several (East Coast) companies (I have no
experience with Amazon), none of them sends you a copy of their non-compete
with your offer letter. What I have always seen happen, instead, is that after
you've fully resigned your previous employer and show up for your first day of
work at the new company, HR hands you a stack of 100-200+ pages of employee
handbook, travel policy, IT policy, etc., and various employment agreements,
requiring you to sign all the documents before you can start working. Buried
in there may be a non-compete, potentially disguised as another type of
agreement. Yes, you're free to read them all (and you should), and you're free
to reject them. But if you reject them you're rejecting the job, and now
you're stuck with no income until you find another job. Admittedly I think
that's better than agreeing to a bad non-compete which could last a lot longer
than the time to find a new job, but it's not an easy thing to do.

I strongly recommend what I do now: after receiving and before accepting an
offer even verbally, request to see all employment agreements that I'll have
to sign upon starting with a new company. All have been fine with sending them
to me (and if not I would immediately reject), but I would not have known
about them and had time to review them if I hadn't asked in advance.

One company I interviewed with years ago, which had a terribly restrictive
non-compete that I rejected, took the attitude that: 1\. I had nothing to
worry about because they said verbally they'd never enforce it. 2\. I had to
sign it anyway because everybody has to sign it, no exceptions (but their
verbal assurance of non-enforcement should be good enough for me). 3\. They
questioned my integrity and belittled my concern because (in their words) I
was planning to leave the company before I'd even started. Glad I avoided that
company - with that attitude, probably would have been a terrible place to
work. Back then (unlike today) I'm not sure I would have had the self-
confidence to fight that fight on my first day.

~~~
danielweber
_1\. I had nothing to worry about because they said verbally they 'd never
enforce it. 2. I had to sign it anyway because everybody has to sign it, no
exceptions (but their verbal assurance of non-enforcement should be good
enough for me)_

First, I feel your pain here, word for word. I didn't have the same experience
as you did in clause 3, but clause 1 and 2 were _exactly_ as I've experienced.

I'd like to say this means we were dealing with the same company but I know we
probably weren't.

Second, IANAL, but there is a difference in case-law between making someone
sign a non-compete as part of a job offer, and having someone sign a non-
compete as part of _continuing_ employment. I'd try to argue that making you
sign an agreement on your first day counts in the latter class. But IANAL.

Also, dropping an IP agreement on someone after they quit their old job is
unconscionable.

------
fatjokes
Note to self, given the choice, work in finance rather than Amazon. They
apparently treat their employees better. At least they have the decency to
offer you salary while you wait out a non-compete.

------
sharemywin
Way to win the battle and lose the war! Never hire anyone that goes to work at
Amazon at the senior exec level from this point forward because they're
clearly clueless.

------
simula67
Maybe Google can win back some karma they lost for participating in the "No
Poaching" deal with Apple et al by defending this guy.

~~~
aragot
This! Yes, why does it even go to public press? In France 60% of programming
jobs are through consulting companies, they constantly play the game of no-
poaching, and those get solved after commission between the two employers.
Either one is also customer of the first, either they pay.

------
jfoster
eBay Inc tried this a few years ago when Osama Bedier left PayPal for Google's
Wallet team. ([http://www.wired.com/2011/05/paypal-sues-google-
wallet](http://www.wired.com/2011/05/paypal-sues-google-wallet))

I have no idea what the outcome of the case was, but Bedier spent almost 3
years at Google.

------
int19h
The details are different, but s/Amazon/Microsoft and you have a headline from
2005: [http://news.cnet.com/Microsoft-sues-over-Google-
hire/2100-10...](http://news.cnet.com/Microsoft-sues-over-Google-
hire/2100-1014_3-5795051.html)

------
sumoward
Does anyone know how such clauses apply in the EU?

~~~
ccozan
No. They will ofer a "garden leave". This means, you get paid and stay
employed as much as the grace period is over. I think the only restriction is
not entering the company's premises.

For executives, is not uncommon that they stay one year in the "garden leave",
having all the perks too.

When I left Autonomy, I had such a "garden leave" for 3 months. I stayed at
home and received normal salary. Was nice, but boring.

------
atopuzov
They should take better care of their employees so they have an incentive to
stay and not sue them when they find a better job.

------
zw123456
I hope this comment does not get me down voted into oblivion, but just to play
the devils advocate here, the guy did sign the non-compete agreement, which,
setting aside legal aspects, is kind of like giving your word. I agree, non-
compete agreements are stupid, but you don't have to sign them, you can always
take a different job that does not require one, probably for less money. What
is your word worth?

~~~
skriticos2
I'm not a fan of down-votes, but I will try to (kind of) refute your central
point according to the argument pyramid. (Not fully disagreeing with you, just
some thoughts on the matter).

The central question is: did he really knowingly sign a non-compete agreement
and is it lawful in the jurisdiction?

Yes, he signed the contract, which was likely a 20 page standard issue paper
that was mostly written by Amazon lawyers in small print.

Now most of us don't send a copy of employment contracts to our layers and
discuss it with them for hours before signing (that's kind of expensive).

That's why there are some limitations on what can go into a contract in some
places (at least in Europe, but I assume the U.S. has something similar). For
instance they can't write in there that you will be their slave, providing
unpaid work without the ability to quit, be beaten as motivation and lawfully
enforce it, even if you sign the paper.

Other things need to be explicitly clarified to be accepted at court. For
instance, if a big software corporation would add a clause to their license
agreement on page 25 that your house belongs to them if you click on "I
Agree", it would most likely not hold ground in a court. If they explicitly
explained this to you (with a few witnesses), it might be heard in court.

The question here is (and it's far from clear cut) is if this contract holds
it's ground in court.

Back to the central point: this means, that Amazon might have to prove that
they made a good effort to clarify this clause in the contract explicitly and
it's lawful in the state he worked. That's up to the court to decide.

Now if they can prove that they did make a good faith effort to clarify his
contract, he agreed and then went on and willfully broke it, then he is in a
troublesome spot.

INAL, this is not an advice for anything and I'm not liable for any of the
above.

~~~
zw123456
Good point. I did not think of that, legal agreements can be made to
obfuscate, much like those online agreements. If that is the case then I am
with you completely, it is unfair. But if he signed it knowing the
consequences then he should live them in my view.

~~~
sheepmullet
"But if he signed it knowing the consequences then he should live them in my
view."

Why? It is not immoral to break a contract. It happens all the time in good
faith. The "wronged" party is only entitled to provable damages. Which as long
as he isn't running away with trade secrets, or cold calling his old clients,
then what provable damages are there?

Contracts are a civil matter. It is immoral to write a "punishment" clause
into a contract and nobody should have to "live with them".

------
cracker_jacks
The best way to stop this is not taking jobs that require a non-compete
agreement. By signing offers with non-competes, you're literally acknowledging
this is acceptable.

~~~
zak_mc_kracken
> The best way to stop this is not taking jobs that require a non-compete
> agreement

Easy to say, and then one day you get an offer for a job you really, really
like.

> By signing offers with non-competes, you're literally acknowledging this is
> acceptable.

Not at all. Very few (if any) of these terms are legally binding. The only way
to actually find out is to have them challenged in court.

If anything, the only way to stop this is for people to keep accepting jobs
tied to non compete agreements so that we can finally see how legally viable
they are. Seems like we are about to find out.

~~~
cracker_jacks
> Easy to say, and then one day you get an offer for a job you really, really
> like. Then weigh the cost/benefit of accepting it or negotiate with the
> company to change it.

My point is not whether non-competes are legally binding. It's the fact that
when you sign a contract, you and your employer are agreeing with the terms
set forth in good faith. You shouldn't sign employment agreements that you
have no intention of fulfilling.

Starting a new job should be a good thing for both the employer and employee.
Both should be on the same page.

~~~
danielweber
As someone who has walked away from a really nice offer because of the
malicious (and I used that exact word when talking with the hiring manager)
terms in the non-compete, not everyone can afford to walk away.

Oddly, before that incident I was in the "man, just negotiate them, it's all
right" camp. Like the joke about a liberal is a conservative who hasn't been
mugged yet, it really changed my outlook, and I'm now in favor of legislation
nuking those things from orbit.

------
turnip1979
I am pretty shocked to see this. For sales jobs or executives, I can
understand. But for your average tech guy? Are they kidding?

~~~
btgeekboy
Except he's not your "average tech guy." The very first page of the complaint
lists him in a "business development role." Going on, "[i]n this position, he
was responsible for developing and growing Amazon's relationships with
partners who utilize and sell Amazon's cloud computing services."

~~~
walshemj
that is such broad statement it could apply to any one from the company's top
sales guy to a junior customer support rep

