Court Partially Enforces Amazon’s Non-Compete Against Employee Who Joined Google–Amazon v. Moyer
Moyer was employed at Amazon as its Director of Sales for AWS’ “global financial services” and signed a non-compete. He left Amazon and joined Google as its VP of “Healthcare, Google Cloud”. Amazon sought to enforce the non-compete lawsuit in state court. Moyer removed to federal court. Chief Judge Martinez grants Amazon’s request in part.
The non-compete Moyer signed before joining Amazon contained the following provision:
During employment and for 18 months after the Separation Date, Employee will not, directly or indirectly, whether on Employee’s own behalf or on behalf of any other entity (for example, as an employee, agent, partner, or consultant), engage in or support the development, manufacture, marketing, or sale of any product or service that competes or is intended to compete with any product or service sold, offered, or otherwise provided by Amazon (or intended to be sold, offered, or otherwise provided by Amazon in the future) that Employee worked on or supported, or about which Employee obtained or received Confidential Information.
The court initially says that a restriction of some sort is necessary to protect Amazon’s goodwill. However, the court notes that the information Amazon is seeking to protect is the “know how” Moyer has accumulated. Moyer is not accused of taking any confidential documents with him to Google. Nor does Amazon allege Moyer would imminently disclose to Google any confidential information. As Amazon alleges, the problem is that Moyer has gleaned information about Amazon’s “roadmap” for its AWS products, and Moyer may use this to his advantage while at Google.
Turning to the scope of the agreement itself, the court says it’s clearly unreasonable:
Amazon maintains that Moyer received confidential information about almost all AWS’s product roadmaps and sales strategies. Resultantly, Moyer would be precluded from working for any competitor providing cloud services anywhere around the globe. But such a scope would be a general restriction on competition, not a reasonable restriction on unfair competition.
The court struggles as to whether it should reform the agreement. It notes that Amazon could have tailored the provision to suit Moyer’s facts more carefully. On the other hand, Moyer is not some retail-store worker who had a non-compete shoved down his throat.
The court imposes the following prohibitions on Moyer:
- he is prohibited from contacting any existing AWS customers
- he is prohibited from contacting potential or former AWS customers for the financial services sector
- he cannot participate in internal cloud strategy as it relates to financial services
Amazon, Microsoft, and Google have been locked in several high profile non-compete disputes. Often these disputes involve a restriction that is enforceable in one jurisdiction but not another. As Eric points out, the restriction here would not pass muster under California law.
It’s unclear whether to read this as a win for Amazon or for Moyer (and Google). As I read through the case again and took a quick look at Amazon’s filings, I come down on the side of Moyer.* The fact that he was allowed to continue to work at Google is itself a win, but the court does not limit his activities outside the particular industry he focused on while at Amazon. Perhaps he may be somewhat affected in that he’s unable to leverage his contacts in the financial service industry, but you don’t get the sense that moves the needle.
Note: Washington recently passed non-compete legislation that made it more difficult to enforce non-competes in certain circumstances. See GeekWire’s coverage here: “Washington state legislators pass law restricting non-compete agreements”. Most importantly, it included a salary floor under which non-competes are not enforceable. At a quick glance, it does not appear that this legislation would have altered the result in this case.
[Disclosure: I worked on a non-compete case against Amazon a few years ago.]
Eric’s Comment: Amazon’s non-compete would be flatly void in California. Furthermore, a California court would not enforce it even if it purported to be governed by Washington law. If Moyer were moving to Google’s HQ in Mountain View, Amazon should not have been able to invoke it. Amazon could still sue in California over trade secret misappropriation and possibly even the inevitable disclosure doctrine (which is dubious in CA and dicey in the DTSA), but the court implies that the trade secret claim is super-weak without the non-compete. Fortunately for Moyer/Google, it looks like the injunction probably won’t materially limit his ability to do his job despite the non-compete. Still, I’d favor a nationwide categorical ban on non-compete clauses and let trade secret law do the work here–if there are actually any trade secrets at issue.
Case citation: Amazon v. Moyer, 2019 US Dist LEXIS 184512 (W.D. Wash. Oct. 24, 2019)
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