Noncompetes are only about preventing talent from working for the competition. They aren't really about protecting secrets, because those are already protected. There are laws against stealing trade secrets, and NDAs in addition to those laws.
However, I do have to say that their argument as stated in this article does seem like a valid case for a noncompete. From the article:
>“Virtually every day, Hall worked with Amazon’s most senior cloud executives to create and execute those plans. As a result, he was entrusted with an unusually broad view into Amazon’s cloud product plans; its priorities; and its competitive strategy.”
In contract law, this is known as "consideration". California has decided that "sign this or you won't get hired", isn't a valid form of consideration because it inhibits future earning potential, it's not (normally) mutually negotiated, nor is it negotiated on equal terms.
If companies really want it, they should pay for it.
Alternatively, if Amazon wanted to protect its market strategy, it should have made sure there was no ambiguity in this term. For example, if they had a narrow non-compete that says, you can't do cloud marketing or marketing strategy for Microsoft, IBM, or Google, it would hold much more standing because it's not overly broad.
As its written, where could he have gone and known for sure that that business wasn't a competitor? You can argue nearly every business is a competitor of Amazon. That's what makes it invalid.
EDIT: rephrased to make clear I wasn't just referring to base salary.
I think there's some possibly quibbling around the edges around what exact would be included, or not. E.g. a rule that bonus / commissions don't have to be included, as long as that doesn't lead to < 75% of previous year's comp would still be ok with me.
I don't see what's not to see. Preventing someone from going to a competitor is generally not so much the goal as the means of discouraging someone from leaving at all.
17 years later, I've since been back to that office several times to visit friends without objection.
If non-competes are truly as strategically necessary as Amazon says they are, why on earth would they hire such a senior executive in a jurisdiction that wouldn't uphold them?
They're not completely unenforceable in California. And the company can make your life miserable by suing you because you have to hire and pay the lawyer to win the case.
However, you generally have to be someone at this guy's level before non-competes can even have a chance of being enforceable. And there are lots of weird restrictions--you have to have access to data that would be damaging to the business, the lockout time needs to be relatively short, probably has to be in your contract before signing, etc.
This is the part that I can not understand about United States. How is this even allowed? It is literally bullying someone to submit, even if what you do is illegal.
One of the main reasons I choose to immigrate to EU instead of US
The problem in the US is that judges don't throw around the "this was pretty obviously frivolous and you lost so you have to pay for the court costs" card anywhere nearly enough.
Another problem is that the lawyer doesn't share in the penalty even when it gets applied.
A final problem is that the lawyers and judge are all buddies and see each other for lots of cases, so they're unwilling to actually slap each other when one of them is being stupid.
But, that is not going to happen obviously.
BS. That's what NDAs are for.
I mean, I can sue you for stealing US nuclear secrets. Now if only I had some evidence...
#1 - No you can't, because only government officials can prosecute "crimes", as opposed to civil causes of action. (I think this distinction is stupid; it is not part of anyone's view of the world and it doesn't have any useful effects. But it will definitely stop you from prosecuting someone for espionage.)
#2 - No, you can't, because you don't suffer any injury if em-bee steals US nuclear secrets.
Fishing expeditions are common and sometimes...legendary cough SCO-Linux dispute
clearly (from amazon's perspective) you can't switch to google without revealing secrets and violating your NDA, therefore we sue you.
As we shall see, the non-compete is also unenforceable in this situation, it just costs more to show that it's not. Non-competes are for the "small" people.
The bigger question is, why are you carrying water for them? Enforceability of this BS is not in your interest unless you're a major shareholder, and even then non-competes are ethically dubious at best. If what's in his head is so valuable (which I'm almost certain it's not), Amazon should offer to pay him his previous comp for the duration of his non-compete, at the very least, so that he sits it out for a year. What are his options? To not ever work anywhere else again? To radically switch careers upon departure?
> On the other side...
Is there any single party interested in both of these goals?
I personally think that non-compete agreements are a strange beast. On one side, you want to avoid people "switching sides" and bring important secrets with them, possibly the reason why they've been hired by a competitor.
On the other side, you want a competitive job market, so that people would get the salary they deserve and the position they deserve.