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Amazon Sues Former AWS VP Over Non-Compete Deal (geekwire.com)
Reader joshtops shares a report: Amazon.com is alleging that one of its former high-ranking executives violated a non-compete agreement when he accepted a job at Bellevue-based Smartsheet, GeekWire has learned. In a lawsuit filed Friday in King County Superior Court, Amazon alleges that Gene Farrell, who served as Vice President of the AWS Enterprise Applications -- EC2 Windows team, violated a non-compete agreement when he took the new job as head of product June 1 at the heavily-funded Bellevue online workplace collaboration platform. "This move is unthinkable," Amazon wrote in a motion for a temporary restraining order that would bar Farrell from working at Smartsheet. "he cannot possibly forget everything he knows about AWS's products and plans while he is working to develop products for its competitor." The suit also notes: "Farrell's role as "Head of Product" at Smartsheet will necessarily involve development of and strategy regarding competing cloud-based productivity products, including but not limited to those for project management, collaboration, and/or automation, and will therefore breach the Noncompetition Agreement and threaten the disclosure of Amazon's highly confidential information," Amazon wrote in its lawsuit.
So is this a case where we should be happy because a guy with the resources to fight the legality of a non-compete agreement is being sued?
-- Sometimes you have to turn the lights off in order to see.
Non-Compete Deal should be full pay with the same COL / pay raises that you should of gotten and full benefits for the term.
Nobody is allowed to use ideas or to make better things, if someone else can profit from it. The world should just ignore American patents and proceed to make the world better, and leave the Americans with their in-fighting and soon-to-be inferior products.
IBM couldn't prevent Mark Papermaster from joining Apple.
We're seeing Google's "GCP" start to eat into Amazon's cloud solutions, and we know Microsoft believes Azure and Office 365 are peas in a pod. Does this mean that Amazon was planning to fight back with some kind of "Amazon Docs" solution?
The Neuralyzer yet? This would save them the signature and legal shebang of non-compete agreements...
Then companies would offer up ludicrous sums to their competition's workforce to force them to pay their best employees to not work.
Are you a fucking moron?
This times a billion. Non-competes effectively prevent an ex-employee from using his skills and knowledge to work in his field. If you want to control the employment of people, you should be prepared to pay for it.
In Belgium these things are great to have.
I had one. The moment I was let go, they signed of that it was not valid anymore. Why? Because if they would not have, they would have had to pay me the amount agreed upon.
All I had to do was file a suit saying that I was unable to go after a job at the competition and they would have to pay me out, regardless if I actually wanted a job or that I was going for a job at none of the competitors.
It would not even matter if I got fired or if I left.
As always: ask a real lawyer that is specialized in this stuff in your jurisdiction, because it can make you a LOT of money or not.
The best moment to do this if you retire. Then there is no risk with future employers who won't hire you. Also look if it is legal, because below a certain pay grade in Belgium it isn't. So you can still go work for the competition and they can't do anything and if you go work elsewhere, they still have to pay you.
Again: talk to a specialized lawyer that is not related to your company. So not the people that do your salary. They work for the company, not for you. Also not your bookkeeper. Only talk to your Union if you are unable to find a lawyer, because it is very likely you talk to somebody who does not know the details and will give you the wrong info, resulting in you not getting the money you should or paying a LOT.
Don't fight for your country, if your country does not fight for you.
Ha, not a chance.
What they want is to control what you learned without paying a single dime.
If they could actually wipe out the years you spent with them from your brain, they would.
There'd be a natural cap. The talent-pool is pretty large and a lot of people are underemployed, there's no practical way to afford to buy-out all of them.
Do not look into laser with remaining eye.
Frankly, any non-compete that does not involve severance pay for the duration of the non-compete should be illegal. It doesn't have to include benefits or bonuses, but it should be the same salary.
Most of the time the people involved do not have any information vital to the development of the product. As noted in the article, Amazon uses non-competes for unskilled, SEASONAL warehouse workers. This is done more often to intimidate people into not quitting rather than to protect the company.
If it is really important to the company, pay them severance for that time period. Otherwise, it is garbage.
Well, he said "should of gotten". I know I'm supposed to be a good egalitarian and not assume that people who make third-grade grammatical mistakes are probably not very intelligent, but really...
Proud neuron in the Slashdot hivemind since 2002.
The issue is that there is a legal concept called "restraint of trade." You cant from a non-compete stop someone from working in their profession and provide for themselves. A lot of these non-competes end up violating this concept which is why the courts are frequently not supporting employers in non-compete disputes.
Non-Compete Deal should be full pay with the same COL / pay raises that you should of gotten and full benefits for the term.
I would rather non-compete clauses require arbitration to settle if the terms are enforceable. They should look at the pay of the employee and severance in determining if the clause can be enforced. In short arbitration should ensure the employee is being given a fair shake.
Companies should have a way to ensure key employees cannot take their knowledge to competitors. But they should have to pay for the privilege. For instance my specialized knowledge probably makes me around $50k-$75k (in salary) more valuable than if I took a software developer job in other industry and technology stack. And it would likely take me about 5 years, or maybe a little more, to reach my current level of pay in another domain. So getting me to sign a non-compete would probably cost the company around $400k in extra pay (paid out over a few years) and/or severance. If keeping my knowledge secret from competitors is actually important then this would be a very fair arrangement in my opinion.
For a VP or executive of a large company, that turns into millions of dollars. If this Gene Farrell guy was making $1M/year I would probably side with Amazon on this one. If he was just another middle manager making $300k/year I cannot see how Amazon could expect him to never work in his chosen field again.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Considering I could do this fucking job better than this guy, they should just drop this damn lawsuit and hire me
Seriously, why do people agree to these things if they really have no intention of abiding by them? He probably felt jilted like every other Amazon employee who see's the grass greener elsewhere. Companies have you sign these not for fun, but because they will challenge you if you ever leave.
Wow, that was quick deflection to corporate bottom line. Not even a glimmer of subject relevance.
On topic: No, it is a message to anyone who wants to leave Amazon.
I don't know how non-compete clauses are legal, you are effectively being forced to give up what is likely your one/major marketable skill. It's like hiring someone whose entire skill-set/resume is based around electrical engineering and telling them that if they ever are fired/quit they can never design electrical circuits/components again. I can see why businesses think they need them, but unless there is a verifiable and fair compensation (likely hundreds of thousands to millions of dollars on top of salary) for the loss of marketable skills they should be invalidated.
> "he cannot possibly forget everything he knows about AWS's products and plans while he is working to develop products for its competitor."
Yes, we learn things at our jobs and take that knowledge to our next job.
I looked at their website. How does Smartsheet compete with Amazon's AWS enterprise applications?
I don't get how the two companies are similar.
Having seen what Google and Facebook are paying incoming executives/creative talent, I can tell you that the cap for the right person is much higher than most reasonable people would expect.
"Who are you?" "No one of consequence." "I must know." "Get used to disappointment."
I think that it shouldnt matter how much money you make. The idea that your past employer can dictate your future is abhorrent. Luckily i live in a state where they are un-enforcable. There is no place for non-competes in modern society, period. You dont get to own people or their minds. Hire people, get the work you need out of them and move on.
Good-bye
Depends on the state you live in. In some states non-competes have basically been rendered unenforceable for the vary reason you state. Other state courts have not arrived at the same conclusion and have varying rules for what make a non-compete enforceable or not.
As in ALL legal matters about which you have questions, I strongly recommend you pay a lawyer for advice before you sign anything.
In my personal experience, I've been sued over a non-compete issue that I considered frivolous. I can tell you that the experience is incredibly frustrating and expensive, even if you don't lose. I recommend you don't go though the mess if you can help it. You may be 100% right, but having to pay the legal expenses necessary to prove that is not fun, especially like me, when you are unemployed. (Yea, let that sink in, I was not employed when I got sued for violating a non-compete. How's that even possible?)
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
We can look at the top end of this, and maybe we forget about the fact that non-competes have been exploding in all industries, including a (paywall) sub sandwich maker. So we erode worker rights by hammering on unions, and now we take even more rights by preventing people from staying in the same career.
Excellent point, the state employment laws dramatically differ. And agree, specifically want an employment lawyer (a normal lawyer wont usually know the intricacies of these things).
In the UK, non-compete clauses are not enforceable as it would be deemed "restraint of trade" for the individual. You may be asked to work your notice period while on leave, but they need to pay you.
Also, an organisation can't prevent you from using "know-how" to implement the thing you did at a previous company.
I don't understand how people in the US let this happen. I thought the US was all about competition?
Non-compete agreements are not worth toilet paper - if you have a good attorney.. You have the right (in the US) of "Life, Liberty and pursuit of happiness", which legally includes your chosen profession. Therefore, nobody can deny you the opportunity to work in your chosen, educated and expert profession - to do so is quite literally unconstitutional.
There may be a period of time before you can bring some "break through" product to market, but you can't be denied work.
This is NOT to be confused with the Uber case of stealing company work and starting your own company or bringing it to another party. That's a whole different level.
The idea that your past employer can dictate your future is abhorrent.
Your past employer is not dictating your future. You are when you sign the non-compete agreement. You are accepting a job under a set of conditions. Would you consider it abhorrent if an employer dictates when you come to work, where you work, or what projects you work on? If it is some form of slavery or coercion then it certainly is abhorrent, but as long as both parties agree I see no problem with any of these scenarios.
Hire people, get the work you need out of them and move on.
Some people are hired to manage long term strategy and curate long term competitive advantage. Part of what you may need out of them is also long term discretion.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
And their competitors would do the same to them. The, all the big companies would go bankrupt, and smaller, independently owned companies would flourish.
So it's win/win/win/win/win, all the way around.
The idea that your past employer can dictate your future is abhorrent.
You are when you sign the non-compete agreement. You are accepting a job under a set of conditions.
You are accepting a job in exchange for wages, when wages stop so should conditions.
How would you feel if you were downsized, but still forced to show up at the office at 9am or risk wage claw-backs or lawsuits?
Amazon is shooting itself in the foot. Smartsheet runs on AWS, I don't see how Smartsheet can be competing with AWS , when it requires AWS.
Hire a lawyer, great advise!
We hired a truck driver who had a teamsters pension but before working for us didn't check his contract which clearly spells out transportation jobs would be subject to time restrictions, for him like 14 hours/week allowed after which point his pension is reduced. He didn't read his contract, but instead just asked a couple of his buddies. He lucked out, and didn't lose the $15k they were going to dock him. But he did have to quit.
damaged by dogma
I already tired of the winning.
This seems like a very clean example that can be used to determine if these types of non-competes are valid.
How would you feel if you were downsized, but still forced to show up at the office at 9am or risk wage claw-backs or lawsuits?
A similar situation exists for contractors where they need to do work they are not billing for. I will grant you the common employee relationship doesn't work this way, but not everything fits into the standard. Some cases are fundamentally different than others, and for those the employee contracts will also be different.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
As part of the sale of my company, I agreed to not work in the industry again. I am given to understand that this is something I could argue in front of a judge or jury, who would likely go with a 'reasonable time period.' More specifically, I can't work for a different company - I was asked to go back and do some contract work, twice.
At the time of the sale, I was 49. That's a lot of productive years that I sold. Don't get me wrong, I am pretty happy with the renumeration. I have no financial complaints, and never will. I do, however, kind of miss the industry. If I could do it over again, I might have kept that clause out of the contract, or established a way to buy that back should I decide to enter the field again.
Ah well... I am pretty happily retired. Bored doesn't really describe it. I am not bored, I have lots to do. I just miss the field, I guess.
"So long and thanks for all the fish."
*should've is what was meant - it's a phonetic typo of a contraction and a sign of English drifting further away from its definition.
Thete's a difference between being laid off while a retention contract/non-compete clause is in effect, and leaving voluntarily in direct violation of the contract.
If course they need to cancel the non-compete clause if you are laid off, they can't argue that you are critical to thier business while not being able/willing to employ you.
"Non-Compete Deal should be full pay with the same COL / pay raises that you should of gotten and full benefits for the term."
Typically in the case of both retention contracts and non-compete clauses, the remuneration provided in the position is much higher than you would get in circumstances nob-cimpete clauses are not required.
If you sign a non-compete clause without considering these aspects, you will need to find some other type of work if you leave while it in effect. If you didn't negotiate sufficient remuneration to make the restrictions worthwhile, you're doing it wrong.
Not all of us are assholes looking to take advantage of the system. That is what you are.