Amazon's non-compete is overly broad and sweeping, and arguably stops anyone from going to a company that even uses cloud technologies. It's written in a way that allows the court to decide just how far it can actually be applied.
As you'll notice from the article, Amazon seems to try to enforce the non-compete every few years, I'm guessing mostly as a message to existing Amazon employees. All I've every seen it do is piss off their employees.
That said, it's totally possible to leave Amazon and move on to an actual competitor. You just have to get lawyers involved. Oracle's Bare Metal Cloud org, that I work for, is made up of roughly 75% ex-aws staff (Amazon has been hemorrhaging staff to Oracle because better pay, and way better working conditions)
Lawyers on both sides end up negotiating back and forth and you just end up not working on anything related to what you were working on for AWS.
> I may not be totally tuned into Oracle's reputation, but this seems incredibly damning to Amazon.
I can't speak to the rest of Oracle, my only experience is from here in the bare metal cloud org, but it's:
1) Better pay.
2) Better hours (you don't keep having to work ridiculous hours to keep afloat.) In over a year I've done barely a dozen late nights, and at least half of those were totally unavoidable. In every case management has strenuously forced me to recoup my time. One thing I really hated was watching staff just constantly burn out in various teams across AWS (I was lucky, my team in AWS was actually one of the good ones.)
3) An obsession with the operational burden (easier to operate == more resilient platform, happier staff and happier customers).
4) Middle management who actively push back, and a senior management tier who both listen, and juggle staff around as appropriate to ensure things get done on time. AWS is a constant feature mill, and it comes across in the marketing language etc. This is only fuelled because middle managers right across the org are either unwilling to say no, or have no authority to do so. From the differences I've seen with managers there, it really seems like the former. Some managers really do make a huge difference (and indeed, the only reason I entertained the possibility of joining Oracle was because I knew several good managers who'd moved across)
I must be pretty out of the loop on things but I had no idea (though probably should have suspected) that Oracle had a competing product. Is it successful? Who uses it?
https://cloud.oracle.com/en_US/bare-metal, launched last year. Full IaaS Compute platform with both bare metal and VM offerings, LBs, VPN, DBaaS (complete with full RAC and Exadata offerings), and so on.
I'm not sure what I can / cannot say regarding customers we're picking up. Don't want to mess things up for the marketing team :)
$5.40/hour to rent one of these bare-metal bad boys:
OCPU: 36
Memory: 512GB
Local Disk: 28.8TB NVMe SSD
That easily mops the floor with AWS and Google on price/performance ratio for running high end database servers. I suppose that shouldn't come as a huge surprise that Oracle's cloud offering would be good for running databases.
It's competitive if you don't actually need the 28.8TB NVMe SSD. If you actually need that much storage capacity and speed you are looking at provisioning 2 i3.16xlarge's and hoping your application can be distributed across multiple instances.
Do you have some numbers?
According to here [1] an i3.16xlarge will get you "up to to 3.3 million random IOPS at a 4 KB block size and up to 16 GB/second of disk throughput. "
What does Oracle claim? I see here they say 1 million IOPS.[2]
Oracle is attacking the cloud space (and AWS specifically) pretty brutally. They have tons of products, from bare metal iaas to j2ee containers to almost any on-premise product they sell rebuilt as saas, in a bet to switch most of their traditional userbase to subscription-based offerings. That's why prices are good and talent is well looked-after.
In terms of success rates, they vary from niche to niche. I'm in Europe and here they're struggling a bit, because 1) their reputation for arbitrary price fluctuations doesn't really entice people to move to *aas, 2) a lot of their customers are big companies operating in strict regulatory conditions, 3) they really pissed off a lot of people by basically dropping any on-premise development beyond the bare minimum.
>this is only fuelled because middle managers right across the org are either unwilling to say no, or have no authority to do so
>watching staff just constantly burn out in various teams
Those are typical examples of a toxic org that uses forced ranking / stack ranking as a weapon rather than any real measure of performance. I don't think that's unique to AWS. It's nice to hear Oracle is so much better even if it's anecdotal.
I was interviewing for that team when I left Yahoo in March 2016, and it was a great fit because I was working on Yahoo (and Openstack) baremetal cloud. My friend there said that Oracle will start you off at whatever salary makes you switch, and then give you 0 hikes.
My Oracle recruiter's tone made me believe this even more. So take OP (and my) anecdote with some salt.
>>(Amazon has been hemorrhaging staff to Oracle because better pay, and way better working conditions)
>I may not be totally tuned into Oracle's reputation, but this seems incredibly damning to Amazon.
"bare metal" is a very special high-priority org in Oracle, pretty different from the rest of the company. Potemkin ... err ... Elison's cloud village.
Absolutely - I cannot emphasize enough how damaging these policies are to the organization. Not only does the noncompete piss off existing employees and stifle creativity, it turns off the better class of potential hires. People absolutely decline to sign these, and hiring is hard enough as is.
And they don't even win when they bring it up in court; iirc, last time they tried this they wound up having to pay a full salary for the time that they wanted to prevent the ex-employee from working.
I don't like to generalize, but business lawyers are soulless asshats.
My four year old's soccer coach was leaving his organization, and I asked him if he was interested in doing private lessons in my neighborhood. He said he was, but he'd signed a non compete with the local children's soccer organization.
It demolished my opinion of the soccer group that they are making 22 year olds sign non competes.
(I did tell him the non-compete was void in California, but he still didn't want to deal with it)
He also had no power. His chance of an impact are near 0. What's his bust case, convinces one person to quit with him and costs the soccer co 32.99 A month ?
I say this based on my experience with civic activism. A surprisingly small number of people who are willing to speak up can have a large/oversized impact.
Power is not granted - power is demanded/taken.
One person who tells the other parents can make change happen.
Your answer is the answer of learned helplessness.
> it turns off the better class of potential hires
Definitely. Hearing such stories, even if Amazon came calling tomorrow to recruit me, I'd stay away. No one wants their former employer holding a veto over future employment.
I was offered a DevOps gig in Amazon's AI division several months ago, and asked their recruiter to never call me again (workplace treatment anecdotes, draconian employment contract requirements, etc).
I only get emails sometimes, but I end up ignoring them all because when I think about composing a reply that sums up to "bug off" I can't decide whether it'd be more effective to send all my complaints or cite just one of no free snacks, no personal side projects including games, no normal 40 hour weeks, presence of stack ranking, aggressive non-compete, or now being (at least internally) worse than Oracle. It's still surreal how I could enjoy a company so much from the customer side and yet have so much resistance to even entertaining the idea of working there...
I don't get this criticism of Amazon. They give cash-based bonuses in the first 2 years, and then after that the cash bonuses transition to equivalent amount of stock grants. If you really want Amazon stock you're free to buy it with the cash bonus.
Having to pay someone during the time of a non-compete is normal practice in France. The law states that if they're is a non-compete and payment details during this time are not part of the contract then that part is void and not enforceable.
A company may decide not to enforce a non-compete (when resigning) and therefore not to pay, but it has to be done right when someone quits, not afterwards.
I honestly don't think it's terrible as such. I'm sure that there are people in the company who enjoy the environment and the acceptable attitudes, I just realized I'm not one of them. My feelings are that I learned a lot there, but not quite what I thought I'd learn, and I did make a pretty penny in stock price. I make much more money in Oracle, but I wouldn't go back to AWS for a 50% more than what I make now.
how successful has Amazon been, historically, in enforcing these clauses?
I've had Amazon recruiters trying to bring me in for an interview for several years now but keep avoiding it because of their reputation for sledgehammer management style. Am I on target here or is this unfounded?
They don't have to be successful at enforcing them. The threat of a potential lawsuit scares employees, and - more importantly - scares their competitors from hiring Amazon employees.
If you were an employer, and you had two candidates - one from Amazon, bound by a mountain of non-competes, and one from Google, who isn't - which would you choose?
Maybe the Amazon person is a bit better, but they also come with the possibility of six figures in legal fees.
Not very. They typically either lose, lose so badly that they are forced to rewrite their contracts, or claim victory after being forced to pay the employee for the time they'd be prevented from working.
The problem is, if you're an individual, it's a huge pain in the ass to duke this sort of thing out. You might even get unlucky in a cut-and-dry case, simply by virtue of not having much money to spend on it.
"Last year, an attempt was made to pass legislation that would have banned non-compete agreements in Washington state, but the bill stalled after business groups, including the Washington Technology Industry Association and the Association of Washington Business, opposed the bill."
This is a perfect encapsulation of political reality in 21st century USA.
Corporations run every aspect of our government, no one else has a meaningful voice.
Similar bills have been introduced repeatedly in WA over the last several years. Rumor has it that both Microsoft and Amazon are somehow responsible for defeating these attempts. There is a 2017 bill that made progress in March this year, not sure what the latest status is. [1] [2]
By now one would think all US states would be eager to imitate California and simply reject non-competes. I think Colorado is close but not quite as radical.
Corporations have a voice, they might even have the biggest voice (except many corporations have conflicting voices, just like people) but they don't yet run every aspect of the government. Honestly if they did I would expect things to be a lot more efficient, at the expense of certain liberties.
Trump has been more corporatist than even Obama or W or Clinton...not sure how far back you'd have to go to find a President more focused on the needs of corporations over other citizens.
What if the people didn't purchase products or services from these said corporations who do these awful things? Ultimately it always comes back to us and our complacency. We would like for things to be different, but we like our conveniences more.
"What if a large, diverse group of people who are busy living their lives could act collectively in a way that's as effective as a well-funded group of professional lobbyists?"
You're right in the most technical sense, in that all of human social reality comes back to "us". But blaming complacency, rather than the exponentially more difficult problem "we" have to solve, is completely bizarre.
The "vote with your dollars" narrative is becoming a common way of dismissing peoples concerns without consideration. It reinforces the plutocracy. I voted by voting!
Purchasing from companies whose ethics you agree with makes sense but that isn't going to stop lobbying or change how laws are passed. That battle will only be won through politics and politicians. Get involved politically and/or hold your politicians accountable.
Yeah, exactly that. "Vote with your dollars" moves your political power to the capitalist consumerist realm, and strips it of so much of its power.
Using food safety as a simple example: vote for food safety regulations (vote with your vote) or don't buy from companies that poison people through negligence (vote with your dollars). Which world would you rather take your elderly grandparents out to dinner in?
Voting with your dollars is a pale shadow of your actual voice in a democratic society.
Just can't get pass all the language. It doesn't bug me too much, but when your TV is in the living room with lots of people around, it's not exactly something you can turn up loud.
You are in the industry, and thus affected by the issue: the most overly broad, worst case, one sided, law of this type is in your favor. Thus it is unfair to even ask that question at this time.
First we need to ask if the law was fair. What are the real concerns of the other side. Did the law address them fairly? Just because you are biased doesn't excuse you from understanding the other side and ensuring that you are fair to them.
Next, you need to ensure that you knowledgeable and involved with other issues. You boycotting alone is meaningless as you ultimately are small compared to people who are not in the industry. Everybody has concerns about their domain that nobody else knows about. Are you informed and helping in the local nurse/hospital depute? What about the retails workers issues (the types of people who enjoy working at wal-mart overall)...
I could drop Prime membership. It would be somewhat more difficult to stop buying products from any company who used AWS. In another case where I knew people who moved from one org to another, which then was sued for similar reasons as in the article, both companies were enterprise organizations that would not be impacted by consumer shopping patterns.
What if people stopped buying cotton that was grown and picked by slaves?
I mean, they could have, but they didn't. You can't pin the blame (Or even dilute it a bit) for American slavery on a Frenchman wearing a cotton shirt.
This is nothing new. Amazon has attempted to enforce their non-compete clauses again and again, often losing but causing financial burdens on the individuals and their new employers. Just another reason why you shouldn't work for Amazon.
It also makes former Amazon employees radioactive; if you're an employer and you know you might get sued by hiring someone from Amazon, you might pass.
Hopefully it works differently than that. As in, prospective employees don't want to be 'infected' by Amazon, so they don't start working there.
Obviously this is a long shot, but if this happened often enough to become a problem for Amazon, they might remove the non-compete clause from their employment contracts.
Yeah that's why I chuckled after reading this - “This feels more like a general bullying behavior that you usually see from legacy ‘Day Two’ companies,”.
Agree that this pisses off not just prospective hires but also existing employees.
I recently changed jobs, and feared my old employer could (but not necessarily would) come after me for non-compete. So, first my new Employer's lawyer looked over everything and said I should be good. Then I hired my own lawyer, to do the same thing (and look over the new employers docs as well) just to cover myself independently. And finally I got in writing that my new employer would cover any legal action pursued by my old employer, just in case.
I would highly recommend the same to anyone else. Absolutely worth the time and money to be safe and covered if you still live / work somewhere they are enforceable.
Plus it relies on the new employer being willing to indemnify you, which many would refuse. Did you get that assurance in writing by the way?
Many of these noncompete disputes seem to boil down less to legalise, and more to a company's weight class. If an Amazon or a Google, sues a startup for a noncompete, then the startup will lose, even if they're legally right (legal fees, injunctions, travel costs (assuming inconvenient court, etc).
Its true, it wasn't cheap, it did take about 2 hours of my lawyers time to do their thorough research. (Edit) But I would much rather spend two hours on a lawyer to be safe, than spend a week on them being in court.
And I suppose I was lucky that my employer was willing to do it, but they did do so in writing. Their lawyer already looked over everything and agreed, so was low risk to them.
And yes I could see the problem with large going after small. Which is a whole other issue. At least in Virginia non-competes are very strict on how they can be enforced. If something is deemed 'too broad' it will be thrown right out. And it has to be a similar position at a direct competitor. I think a small company does have a fair chance against big ones in these situations, at least here. Unless of course they really are breaching the non-compete.
(Edit) I suppose my point should be, cover yourself as much as you can. Not everyone may get as lucky as I did, but at least try. The last thing you want is to end up blindsided by a situation such as this story.
> And I suppose I was lucky that my employer was willing to do it, but they did do so in writing. Their lawyer already looked over everything and agreed, so was low risk to them.
I suppose there's an argument that being employee-friendly about this is a good move for companies. After all, they reviewed the contract and shelled out to hire you, so they're clearly accepting some risk over the issue.
Amazon threatens and blusters over noncompetes to retain staff, but someone who promises to fight unrealistic noncompetes might gain an advantage in hiring new staff - especially from places like Amazon.
It's similar to Newegg. They always fight patent trolls. I think the ROI between customer Goodwill, employee culture and dissuading suits is probably close to break even if it was measureable
Yep, that'd be my guess. Newegg seems to have gotten actual consumer spending out of their goodwill, along with a lot of presumed value in trolls deterred. "We'll go to the mat over noncompetes" probably offers similar benefits in ensuring you don't have to do so again in the future.
I worked for a company that wrote software for a particular industry. It was bought and the buyers gave everyone three days to sign a no-compete or quit. Worked there a while until I found a new job writing software for a different industry. New company had a subsidiary that wrote software for old company's industry. Got a letter from new company saying I would in no way do work at the subsidiary, gave it to old company's legal office and got permission to work for new company.
It was a hassle, but not nearly as bad as having to get my own lawyer and such.
The key here being you had to get permission to take on your new job from your current employer. You were at their mercy to continue your career just because you worked as their employee for a while. What if they had said no? If you weren't taking trade secrets with you, then should they really be in the conversation at all?
I'm fine with them saying no. However that means they are paying for my sabbatical for the duration of the non-compete. What I do is not up to them: I have said I do not want to work for them, and they won't let me work where I want, so the only middle ground it getting paid for not working at all. This includes cost of living raises every year.
Note, if you are ever in this situation you should not let yourself stagnate. Someday they will decide your knowledge isn't worth the price they are paying and release you. If you have nothing to show for your time nobody will hire you and that is your own fault. I recommend grad school, or get a degree in something else, or make it your full time job to work on open source projects.
Generally courts frown on non-competes: they fail to meet the standards of a contract as there is no consideration from one side and a person has the right to support themselves using their knowledge and experience. Courts are sympathetic only when you are taking specific knowledge to the new company and that is a higher bar than most non-competes can meet.
I'm saying that it is implicate in the non-compete even if not spelled out. (in some cases courts have rules a non-compete is not a valid contract even if signed because it prevents someone from earning a living)
Yes, but do you really want to test that in court? Even if you're right, you may end up destitute (Money runs out before the trial ends, your lawyer is an idiot, the judge is an idiot...)
I don't disagree that this is bad in general. I won't ever sign another no-compete. I was just pointing out that, at least anecdotally, there are examples of not needing to higher a lawyer.
Even though non-competes are illegal in California, a company can be a jerk about it and force you to court to get it thrown out--which will take a long time and be expensive.
That's a good question. I don't think so, not in the DC area at least. They are standard around here. I think its expected that you have, and will sign a new one with the new employer anyways.
During my my interview process one of the potential employers even asked to see any non-compete and NDAs that I had with my current employer, before they would move forward. Because they want to make sure they are in the clear too.
I suppose it could hurt in some situations, but I feel its best to be open and honest about the situation. If you are changing careers, you may be safe to not bring it up, but otherwise at least talk to your own lawyer.
Potentially. They'd have to weigh both the legitimacy of the non-compete and their ability to either fight it or eat the costs of losing a new hire. But it's also good full-disclosure, since they could probably dismiss you on the same grounds.
Someone caught behind a harsh-and-enforceable noncompete could certainly find getting hired very tricky. At that point they might well have to move - for instance, to California where out-of-state noncompetes are (usually) void.
It certainly can. I worked for a (very) small consulting firm. We basically wouldn't entertain hiring anyone with a non-compete that was remotely applicable. Just too much potential risk/cost. Doubly so if they worked for a client or a competitor. (Quite common.)
“When we looked at their offerings and what Smartsheet does, it is two
totally different worlds,” said Mader. Using Amazon’s logic, Mader said
that Smartsheet would be a viewed as a competitor to Amazon Prime because
both services make people more productive.
If this interpretation is correct (take with salt as it comes from the defendant's side), then it sounds like an attempt to debar this person from working on any technology at all.
That's exactly what it is; Amazon has its fingers in so many pots that it can claim anything is related to their area of business. In a sane world, this sort of consideration would be strictly confined to what the employee actually worked on for the company, not what the company broadly works on.
Shareholders for Amazon should be concerned that Amazon is letting their employees know too much about plans in other divisions.
It is fair to say a VP knows the DETAILED plans of that division enough that doing the same thing for a competitor should be a problem. However VP experience should let him go to a competitor in a different division as his knowledge of the plans should be vague enough as to not matter.
"Users can comment on files, send them to others for feedback, and upload new versions without having to resort to emailing multiple versions of their files as attachments. Users can take advantage of these capabilities wherever they are, using the device of their choice, including PCs, Macs, tablets and phones. Amazon WorkDocs offers IT administrators the option of integrating with existing corporate directories, flexible sharing policies and control of the location where data is stored."
If you look at the complaint, it suggests Amazon (and the person being sued) has been working on a similar collaboration product of some type, presumably as part of their "Business Productivity" unit; Workmail/Workdocs/Workspaces/Chime.
"AWS currently offers numerous cloud-based productivity products for businesses—i.e., products designed to streamline work processes—including products for corporate email and calendaring, document storage and collaboration, virtual meetings, video calls, and chats, and virtual desktops. AWS’s product offerings are in constant development....AWS competes with Smartsheet (Amazon will submit to the court more detailed information regarding these efforts, under seal, and attorneys eyes only, at the appropriate time)....Shortly before he left AWS, he worked on a critical component of [REDACTED] and received extensive confidential information about how [REDACTED]."
Obvious issues I can see are "don't put that in writing, pull the offer and don't say why" or "no, it's not adhesion at all, we just don't like any of these specific changes, you're welcome to try again!"
Obviously you don't use the words "contract of adhesion" or ask for that stance to be officially signed. You just send a friendly email to your point of contact expressing your concerns and asking for changes to things. If they pull the offer over bringing up your concerns over a non-compete, they're an abusive enough company that you're probably better off not taking the offer. If you tell them you're concerned about the wording and consequences of some terms, and ask what options you have, they'll likely tell you in an email whether or not you're allowed to negotiate or amend the contract.
I had to look that up, but yes, the Big Co's (AFAIK) will not negotiate on clauses of their employment contracts. Feel free to negotiate all you want on salary, stock, etc, but not the non-compete/etc.
Not sure what you mean by getting in writing. It is what it is.
There are different types of contracts. A standard form contract or "Contract of Adhesion" has certain limitations because it is where terms are created by only one party, in this case Amazon.
- While these types of contracts are not illegal per se, there exists a very real possibility for unconscionability. In addition, in the event of an ambiguity, such ambiguity will be resolved contra proferentem against the party drafting the contract language.
Non-competes are tricky: they essentially try to extend trade secret protections to information that people know (which is hard to track), instead of information that's written down (which is easy to track, see Waymo). It seems most people on HN are fine with protecting the latter, but not the former.
In my opinion, a non-compete is something that needs to be separately negotiated and compensated, rather than lumping it into "employment." If you agree to a non-compete, you are paid $X in exchange. If you violate the non-compete, you must pay $X back (and there could be a negotiated multiplier, e.g. $3X). In the absence of agreement, the legal default should be 1:1. If you are paid nothing for a non-compete, it is unenforceable. If you are paid $1, you must pay $1, and so on.
This gives each side an opportunity to value and agree upon the non-compete apart from the job itself. Eventually, most industries would settle on standards.
In many countries (e.g. Poland) non-competes are only legal if you pay X% (e.g. in Poland it is 25%) of salary for as long as you signed non-compete after your employment ends.
This is still not ideal. The best is to ban non-competes or make them even more expensive.
From economical perspective for ecosystem, non-competes are bad. They reduce the competition and may force some talented person to be underutilized below potential. Plus open whole class of abuse. "Our flipping burger strategy is so unique that you couldn't do it elsewhere"
In some states, non-competes are only enforceable if there is a payment made after the employee's separation. It would appear Washington doesn't have that provision.
Non-competes... anti-worker, anti-innovation, anti-freedom, anti-competition, anti-freemarket, anti-independence, anti-entrepreneurial, anti-business (to the ones wanting the skilled labor not the ones the employee left because it is a free employment market) and fully anti-American.
Non competes treat employees like they have no value and are mere slaves or sharecroppers.
I especially like the ones where you have a contract that is for 3-6 months and they want a non-compete for multiple years.
How about this, if a company really wants a non-compete, then make sure they are paid fully above salary, otherwise this is just ownership of skilled labor.
So, random question: if you end up interviewing for Amazon at some point, is it a faux-pas to bring up legal troubles and controversial issues like this while speaking to your interviewers? Is it a bad idea to bring up (for example) this non-compete behavior on the part of the company when negotiating, or should you keep quiet about it?
This seems like the sort of thing that should give someone pause when interviewing with Amazon for a job.
If you're not desperate, you should definitely push back on any non-compete clauses during hiring. You really shouldn't sign any agreement you aren't comfortable with and should instead make changes until you're okay with it.
> So, random question: if you end up interviewing for Amazon at some point, is it a faux-pas to bring up legal troubles and controversial issues like this while speaking to your interviewers?
All your interviewers will tell you is that they couldn't possibly comment on such a subject, and move on.
Or send it back with markup. A lot of companies will wipe off stuff at that point because the manager wants to make the hire. This is the point where you have the most leverage in making the deal.
It's also important to stay unemotional, e.g., treat it at the same level as what your office chair looks like. You just want them to agree, not start wondering if you are a good fit.
I personally dislike non-competes but the point is to get it removed, not make some big statement. (Unless your goal is to make a statement, not get the job under desirable conditions.)
Any controversial question is going to potentially cost you. The interviewers will be asked their opinion of you and they can simply say 'pass'.
I think I failed my interview at Blizzard when I brought up them firing a ton of people -- I just wanted to know how secure my job was, and wanted to know their perception of the firing being on the inside.
If you don't want a job I'm sure that's a good thing to bring up.
When I interviewed there I made some brief remarks about the downsides to consolidation to one of the 8~ people they had me talk to that day. His face turned a little sour. I wonder if it was that or my salary demands that made them not extend an offer to me. Oh well ;)
They would have extended an offer or not independently of your salary demands. The question you asked would have been a minor point in the debrief if it was discussed at all. If you didn't get an offer it is probably because you didn't "meet the bar".
I obviously didn't "meet the bar", but it's not obvious to me which bar I missed.
In my estimation I clobbered the phone tech screen. I clobbered all of their board work except the first early morning one. I did sort of muddle through that one. I got through it, but not with all that much glitter and glam.
I don't think I interviewed like a madman sociopath, but subjective things like personality are the hardest things for me to defend my performance in ;)
Unless you're interviewing for a Director position or above, there will be little value in prompting a personal answer from the interviewer. They're there to ask very specific questions, give feedback to your hiring manager and move on. They have very little power and insight into this kind of stuff.
Actually, the same constitutional grounds on which California law does not recognize non-compete agreements would be the same grounds on which the U.S. Supreme Court would uphold Washington's recognition of such clauses. That such laws are not the concern of the federal government under the constitution. Such powers are reserved by the state by the constitution.
Of course, there could be some batshit crazy application of the commerce clause (wouldn't be the first time), but that could go either way.
I'd be curious if this holds true across state lines. For example, if I'm hired by Amazon in Washington, then go to work for Google in California, is the no-compete recognized as valid? I'm sure the answer is "it depends", but I think that's why it could come up in the higher courts. And since appeals will go up to those higher federal courts, which would have to make a more broad-reaching decision (even if it is simply "the lower court's ruling stands").
(can't vouch for it... I'm not a lawyer nor did I review it much.)
Given that many contracts are with parties across state lines, yet subject to some state's law, I have to assume that there is a substantial set of precedents which have established how to properly set jurisdiction/venue. It won't be a new problem.
I think you misunderstand - California outlawed non-competes by passing a law, not by interpreting the US/California constitution. It was not the judicial branch that outlawed them, but the legislative one.
I.e., to do it the same way California did it, would mean passing a new federal law, not a new ruling along constitutional grounds.
Didn't California specifically draft legislation to prevent them? That is very different than challenging the enforceability based on currently existing laws in other states.
Sort of. The original 1872 California Civil Code contains a provision voiding contracts that restrain otherwise lawful trade [1]. But that code was intended to be just a codification of the common law, not a major change in the law (except regarding procedures, which it was intended to simplify), so its authors thought that they were simply restating the common-law rule against restraint of trade.
It turns out that either they were wrong in what the common law said, or else it has evolved differently in the years since then, because California's explicitly codified provision has turned out to have much more teeth than the common-law rule it was intended to restate. But they were of the opinion that these kinds of contracts should already have been voided at common law. Unfortunately the codification movement lost steam or else it might've ended up in the law of many other states [2].
This is exactly correct. From its terrible work culture and now this, it seems like legal action is only a way of intimidating present employees to toe the line or else face expensive legal action. They most certainly don't want to risk losing the opportunity to have a non compete at all (because right now they DO have that option and have absolutely no regulations on it).
Article I, Section 8, Clause 3. The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."
If developers and fast food workers alike feel compelled to move to California to escape the yoke of constricting and onerous non-compete agreements, there's an argument to be made that it's a meaningful impact to interstate commerce.
That clause gives Congress the power to pass a law outlawing non compete agreements. It doesn't give the court the power to outlaw the practice on its own.
Non-competes really should be illegal. I have a friend who is a doctor. He is being forced to sign a non-compete for a 12 mile radius and 2 years.
The irony is that his boss is forcing this on them because she quit her job and brought a bunch of her former coworkers with her in order to start her business, and she doesn't want anyone to do the same to her.
What it means is my friend essentially can't find another job without either:
A. Moving (which is not an easy choice if you have a family) or
B. Subjecting himself to a significantly increased commute
This means his current employer can essentially take advantage of him, as she knows he won't be going anywhere unless the situation becomes truly unbearable.
I've heard nothing but bad things about working at Amazon. They may have an amazing (technically) company and are winning in a lot of ways, but at what cost?
I'm often hit up by Amazon recruiters and I've talked to a few before and got the sense (just by their tone) its not some place I want to be working. They also were deceptive in their recruiting tactics.
That is sort of dumb. I can more understand if he went to Google Cloud or Azure, but this is a very very broad usage of a non-compete clause. They are setting themselves up to lose I think.
This whole case is odd since I have never heard of it being enforced even if you switch to a competitor.
My manager went from AWS to Azure and it was no big deal. He even finished out his 2 weeks and our director gave him a farewell at our (director level) all hands.
Non-competes enforced in this way certainly seem unfair to employees.
But let's talk this through. Assuming we all agree we don't like them, what's the alternative? There seem to exist obvious negative consequences of them not existing in any form.
Wouldn't large companies such as Google, Amazon etc be able to poach any employee of let's say a startup competitor, by simply paying way more, therefore being able to steal ideas, technology, etc?
Or even amongst (well-capitalized) companies of any size: a free-for-all for employees within industries, good or bad? Maybe not so bad actually.. what say you?
Seriously asking because I'm trying to envision the positives and negatives of them being outlawed..
You perfectly described the alternative. Rather than relying on non-competes, employers must pay their employees sufficiently well and treat them well enough to discourage poaching. Better in every way for employees, but possibly expensive for employers.
If the CA tech scene has shown us anything, it's that companies will do just fine without relying on repressive & anti-competitive employment contracts.
Very likely prohibitively expensive for a lot of employers. Suppose you're a small-business owner with a great product, albeit with a limited but growing customer base. You work where cost of living is much lower than SV. $100K for a developer is pretty good pay, and you can't afford to pay, say, $125K per year. One of the "big guys" offers some of your devs $200K per year remote to bring their knowledge and reimplement a knock-off. You're sunk, and not because you are too hard-hearted to pay better salaries.
I'm not saying the current non-compete system is optimal (I've been bitten by it), but some reasonable level of protection needs to exist or we'll descend into (near) monopoly territory even more rapidly than we currently are.
My issue with non-competes is that the vast majority of people who sign them don't understand what they are signing, nor do they negotiate the terms. They feel that they are in a weak position; it's the first day of a job and if they don't sign they'll be unemployed. What's worse is that you are generally presented with a stack of paperwork to sign and told it's just a formality.
There's also the misunderstanding that everything you sign is binding, it's not uncommon in CA for employees to sign what looks like a non-compete, and then believe that it is enforceable. Very few people have a lawyer, or can afford to pay a lawyer to review these agreements. Even fewer are brave enough not to sign them then and there.
I've seen some very egregious language before, one of my favorites was one that restricted the employee from working for any past, present, or future (defined as one year) customers of the employer--and their future employers from the same! I've got no idea how this was supposed to be enforced, but it caused the signee to be in fear of being sued.
Mostly it doesn't matter. If you gave me a compete copy of our competitors source code and there was no restriction on using it I wouldn't spend more than a few hours looking at it. We already have our working code built on our architecture. It is quicker to recreate their algorithms from scratch in our project than to read their code. We might look into their code for something specific (probably their data file format), but even then it is likely we would document what they do and reimplement it in our system from documentation.
The above isn't just speculation. In a previous job I made third party scan tools for cars. One manufacture didn't provide their legally mandated documentation. When lawyers contacted them about it they panicked and shipped us their source code and the above is what we did. (giving us source code doesn't meet the legal requirements, but at least it was enough that we could get our features working)
It's pretty simple. Keep non-competes but require the company to pay a certain percentage of your salary during the period the non-compete specifies after you've left the company.
If you are so valuable that a company is worried about you going to a competitor then they should have to put their money where there mouth is.
> Even in California, in limited circumstances they [noncompetes] are allowed.
The circumstances are extremely limited [0]. In fact, California law says it's an unfair business practice even to require an employee to sign a noncompete, which could result in civil liability for damages [1].
Federal courts need to set nation wide standards on these unfair practices. It's 2017, but we still allow companies to routinely violate free will - a basic human right!
I remember Gene. We worked together on a demo for the launch of AWS Workspaces, back when I was a Tech Evangelist. Unfortunately, at the last moment we couldn't present it at re:Invent. Can't disclose much else (unless you buy me a good espresso in SF).
I don't like non-compete agreements. They are now far away from their intended purpose. It's wrong to point fingers at a single company, though - the entire sector suffers from this.
Unfortunately for many people "free market" means the freedom of the powerful to exploit others in any way that the want, not the freedom for anyone to compete fairly.
As you'll notice from the article, Amazon seems to try to enforce the non-compete every few years, I'm guessing mostly as a message to existing Amazon employees. All I've every seen it do is piss off their employees.
That said, it's totally possible to leave Amazon and move on to an actual competitor. You just have to get lawyers involved. Oracle's Bare Metal Cloud org, that I work for, is made up of roughly 75% ex-aws staff (Amazon has been hemorrhaging staff to Oracle because better pay, and way better working conditions) Lawyers on both sides end up negotiating back and forth and you just end up not working on anything related to what you were working on for AWS.