zoltan
Zoltan Szabadi (via LinkedIn)

Amazon is suing a former Amazon Web Services strategic partnerships manager, Zoltan Szabadi, alleging that his new job at Google Cloud Platform violates the terms of a non-compete agreement that he signed when he originally joined Amazon.

The suit will be closely watched in the tech industry as a new test of the standard employment agreements that Amazon and some other large tech companies require employees to sign when they’re hired, restricting their activities if they leave.

[Follow-up: Former Amazon employee: Disputed non-compete deal ‘excessive’ and ‘overbroad’]

The case also underscores the growing rivalry between Amazon and Google in the cloud.

“Szabadi was directly and integrally involved with the marketing of Amazon’s cloud computing business to its partners and resellers, and played a significant role in developing Amazon’s business strategy and direction in this area,” the suit says. “Szabadi was involved in developing, implementing and managing Amazon Web Services’ strategy for many of its partners, and was the first point of contact for most partners who were considering working with Amazon.”

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.

According to the suit, Google on its own required Szabadi to agree not to solicit business from customers that he worked with at Amazon for six months after joining Google. He also agreed not to recruit employees from Amazon for the same time period.

But Amazon says Google’s restrictions on Szabadi don’t live up to the terms of the non-compete, non-solicitation and trade secret restrictions in Szabadi’s employment agreement with Amazon.

Daniel Powers, the former Amazon Web Services sales chief, was caught up in a similar dispute after joining Google in 2012.
Daniel Powers, the former Amazon Web Services sales chief, was caught up in a similar dispute after joining Google in 2012.

The case against Szabadi is similar to Amazon’s 2012 suit against a former Amazon Web Services vice president, Daniel Powers, who joined Google as the search giant’s director of cloud platform sales. That case was transferred to federal court in Seattle, where a judge declined to enforce the most sweeping provisions of Amazon’s non-compete agreement.

Although large portions of the two complaints are identical, Amazon appears to have slightly adjusted its approach based on the previous ruling, testing the legal limits of non-compete agreements.

In the earlier case, for example, Amazon sought to restrict Powers from “any activity that directly or indirectly supports any aspect of Google’s cloud computing business that competes with Amazon’s cloud computing business” for 18 months after his departure. A federal judge found that overall ban on competition to be too broad, but said Amazon could keep Powers from working directly with his former Amazon customers for a shorter amount of time, nine months.

In the new case against Szabadi, Amazon is seeking a more specific injunction, preventing him “from engaging in any activities that directly or indirectly support any aspect of Google’s cloud computing business with partners or resellers.”

Here’s the full lawsuit. (Thanks to Venkat Balasubramani for spotting this one.)

Amazon v. Szabadi by Todd Bishop

Comments

  • longthebtc

    doesnt matter if this takes place in california

  • joe

    only matters if person being sued is now living in another state, if so then it goes to federal court in Washington

  • Slaggggg

    There’s another story here … why would this guy move from Amazon to Google? He’s going from the clear #1 leader to a distant also-ran. Why would anyone make that move?

    • ben d

      Some people just like to cheer for the underdog!

    • Smash

      Any number of reasons, many of which are probably personal: benefits (Amazon’s pale in comparison to Google’s), pay (Director-level pay at Amazon is great, but Google will pay extremely well for high talent), culture (Amazon’s is difficult, Google’s is corporate, but easier), and as ben d mentions, sometimes it’s fun to take a role that’s bigger than your current role at a different company and see if what you’ve learned can translate to a broader leadership position.

      Bottom line: career moves are personal things and shrewd people manage their careers shrewdly.

      (I used to work at Amazon and Google)

    • james

      Because Google is Google and has just entered the cloud space but is already making huge strides in it. The AWS camp is scared, because they know they are not against some small fry, they are against Google. Good.

    • MattW

      “A distant also-ran”, you make it sound like the race is over, when this marathon just started. Google is far from out of the race and have not even begun to hit their pace. Competition is good, especially for the consumers.

  • Mark

    Very simple, If Amazon, or any company, wants to stipulate that an employee cannot work for a rival company, as all companies are rivals. Then that said company can pay that (ex)employees salary,
    medical included, for the duration of the NDA that was signed.
    If you think about it, why should the employee be punished when they leave the
    company in this fashion.
    1)This can give a NDA weight and legitimacy.
    2)Knowing human nature, the employee is less likely to search for work in said field for most if not all the time specified unless they have a job already waiting for them.
    3)The head hunting company is more likely to hire for talent than rival product knowledge.

  • Chris

    Oft-repeated, but here it is again – non-competes are enforceable in Washington. Yet another Google-Amazon fight for talent. Subtext, IMHO, is that Google is determined to fund litigation that challenge and, case-by-case, pare down WA law in this area. Effective law-fare tactic to get WA talent? Seems so to me.

    • Dave

      The companies that care most about enforcing do include this. Just find a current Medtronic non-compete.

  • Uberhoo

    In my view, it’s a sign of fear and failure, when attorneys reach down into the ranks to try and enforce b.s. overly broad non-compete agreements; from a 33 yr. tech vet, including Apple and MSFT.

    They have a better legal chance when chasing sr. execs – regarding protection of proprietary strategy, but going after a partner-manager, that’s pathetic. Bet is this goes nowhere, at least it shouldn’t.

    I do like the comment from a previous poster that if requiring an 18 month non-compete, that should trigger a required 18 mo. severance package.

  • seth togan

    non competes will be non existent in a few years..AMZN is reknown for beating the sh#) out of its employees and then suing them when they leave…they’re a joke…and yeah, a judge in CA would laugh at them if this BS suit was filed in CA

    • Dave

      No they won’t. Non-compete issues have been around for decades. To think this is unique is silly. CA set a statute non-competes are unenforceable unless entered into by owners (not option holders) in connection with an acquistion. Non-competes will continue unless states abolish them. Very doubtful states will abolish them broadly although clearly there are states like CA, OR, etc. that make them unenforceable or difficult.

      • http://bradhubbard.net/ calciphus

        Oregon non-competes are still widely practiced and enforced. CA has made them basically worthless, but not Oregon.

        http://www.oregonlaws.org/ors/653.295

    • sv_homer

      In California the employee would be awarded damages.

  • don’t sign on the dotted line

    Something to think about when considering that senior-level Amazon job offer. If it doesn’t work out and you go somewhere else they don’t like, they’ll chase you down and sue you. Because apparently they own you. Forever.

  • lolwut

    IT niggers. Why you forgot your freedom?

    • TLDR

      That position is not technical so he’s not an “IT nigger”, it’s a fairly senior management position and it’s business oriented.
      While i do not agree with many non competes, companies need ways to protect tools of trade which cannot be trade marked or protected by copyright.
      A person who’s job was to develop strategic partnerships with 3rd parties and large clients to grow the business can give your competitors a fairly big edge in countering your existing plans.

  • Joan Yu

    So, always some companies require employees to sign when they’re hired, restricting their activities if they leave.

  • Walmazon

    Amazon is a joke. They should be ashamed for bullying an employee who is not even at a director level. I used to work for AWS and the company culture is horrible. It’s the Walmart of IT industry.

  • Jason

    I dont understand why anyone would sign a non-compete or how it is legal. It basically says you cannot work in your profession/field. Makes zero sense. The only part that makes sense is not contacting customers you already worked with or divulging corporate info from previous employer.

    • Joe

      You’re forced to sign first day on job after they’ve relocated you.

      • Jason

        I would think theyd make you sign that and all the other stuff before they incur the cost of relocating you.

  • james

    This lawsuit should be kicked to the curb. It is about time Amazon and other giants stop trying to dictate to the common man how he can earn his livelihood!

  • Joe

    Not only did I know Zoltan as we we’re colleagues at Amazon, but I got sued by Amazon with almost identical language when I left Amazon Retail for a competitor in ONE particular retail category. I, too, left WA for a bigger leadership role (which is what happens to most successful Amazonians) and went to a company in CA. Because Amazon will never chance their Non-Compete in Federal law, as it will fail, they only file suit in WA and end up settling when Zoltan’s CA lawyers file a counter-claim in CA. 99%, they’ll settle with Zoltan getting paid by Google for three months to do very little. Guaranteed.

  • disqus_FLYyuxcXaA

    these kind of employment contracts should be illegal or at least have a reasonable time limit.

  • Ex-Amazonian

    I’m also ex-Amazon, and I was also sued when I left to join a CA company. In my case, I went to a company who was not a direct competitor (software company versus Amazon’s services / retail model), but that did not prevent Amazon from trying to beat the startup I joined into submission via legal fees and depositions. Amazon is being particularly aggressive about about going after people who leave its cloud business to competitors (and Google is gearing up to be the one of only two serious competitors in the cloud space, the other being Microsoft), as they have a first mover advantage and are doing everything to build market share while the competition gears up. I agree with the post by the other ex-Amazonian: Google will counter-sue, and Amazon will eventually settle. Like the fight against state sales tax, Amazon knows that this is a rear guard action, and is going drag on the benefits at long as they can, knowing they will eventually lose. In their calculus, the legal fees are more than offset by the commercial advantage gained by slowing down competitors looking to poach Amazon talent. In terms of why we signed these agreements in the first place when we joined Amazon, we were not given a choice. You either signed the stack of agreements HR put in front of you, or you didn’t get the job. It is not reasonable to expect that any but the most senior executives would have the opportunity negotiate the standard employment documents for any large company. Amazon was particularly sloppy in this regard, in that their non-compete had been standard for over a decade, and made reference to things like CDs, barring employees from working for other commerce companies. This made things complicated when they ended up in front of a judge trying to explain why this agreement should apply to someone leaving their cloud business.

  • Derek Land

    Amazon is turning out to be such a lovely company these days.

Job Listings on GeekWork