Former Amazon employee: Disputed non-compete deal ‘excessive’ and ‘overbroad’

zoltan

Zoltan Szabadi

A former Amazon manager is responding defiantly to the company’s lawsuit over his new job at Google — further positioning his case as a new legal test for tech-industry employment agreements.

A lawyer for Zoltan Szabadi, the former Amazon Web Services partnerships manager who was sued by the company after taking a job with Google, is asking a King County Superior Court judge to throw out the lawsuit — challenging the validity of Amazon’s standard employment agreement, including a controversial non-compete clause that restricts the activities of employees for up to 18 months after they leave.

“The restrictive covenants in Amazon’s form agreement, which it compels most if not all of its tens of thousands of employees to sign, are excessive, overbroad, and not crafted to impose reasonable post-employment limitations for the purpose of protecting interests that Amazon may legitimately protect through otherwise unenforceable restraints on trade,” writes lawyer Keith Petrak, responding on behalf of Szabadi in a court filing this week.

The filing continues, “Rather, they have the effect of unreasonably chilling employee mobility and depriving employees of opportunities to advance their careers and better their lives simply by utilizing their general skills and knowledge in their chosen fields. This lawsuit, which Amazon chose to pursue publicly rather than work with Szabadi and Google to explain any legitimate concerns Amazon might have and work to craft restrictions tailored to address such concerns, is part and parcel of such efforts.”

We’ve contacted Amazon for comment on the response. The company said in its original suit that it believed Szabadi’s new position with Google would hurt its competitive position against Google Cloud Platform.

“These narrow restrictions are intended to protect Amazon’s trade secrets and its highly confidential information, as well as Amazon’s current and prospective customer relationships, its existing and prospective business relationships, and its confidential plans and strategies,” the company said in the complaint.

Amazon’s suit, originally reported on GeekWire this week, 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.

Some startup advocates contend that such agreements limit the flow of talent required to create a healthy tech ecosystem.

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.

 

  • glorification

    It’s right to challenge the validity of these broad non-competes we are all forced to sign at one point or another in our careers. If firms value specific trade secrets then these should be specified as part of the non-compete. Otherwise how can a company, Amazon for instance, differentiate between their own IP and the IP an employee brings to the job? Aren’t tech firms paying employees for the IP they bring with them? IP developed over years of education and work experience? Amazon just can claim the whole IP package belongs to them once an employee leaves….

    • Ethics101

      No one is forced to sign a non-compete. Signing a non-compete is a choice one makes in exchange for something of value – like the job opportunity, a promotion, etc.. If a person doesn’t think the exchange is of similar value they should walk away just like any other purchase/negotiation where they don’t believe it’s worth it. Maybe I’m old-fashioned but I think people should honor the agreements they make even if no longer convenient at some point in the future. According to his LinkedIn profile Zoltan appears to be a fairly senior person and I am guessing he knew exactly what he was signing at the time and felt it was worth it (or at least had the smarts to know he should engage an attorney if the verbiage was over his head). Man up an stick to your word.

      • JCJ Bike

        Except, a non-compete shouldn’t apply to foot soldiers who gain experience. He was a manager.. not a SVP.. and nothing is stopping Amazon from firing the guy so they can sever their relationship with him at any time as this is a right to work state.

        I’ve read two non-competes and they were worded in a way that said “you aren’t going to steal trade secrets and run to the other guy.” That’s a lot different than working at Amazon for six years and then deciding it’s time for a career change.

        This is a company that has the potential to abuse a non-compete agreement and it will take a judge to slap them back into place.

      • glorification

        You have good points and I agree people need to honor their word – including Amazon. However, being a smart guy Zoltan surely isn’t suing frivolously – this isn’t a “my coffee is too hot” type of lawsuit. He must feel that Amazon is making a broad claim without specificity. Amazon should understand this position will have repercussions for their hiring efforts as well. Their response makes them look controlling and punitive pushing smart talent to choose other firms with an open, less controlling culture – leaving Amazon with no new IP in the future to protect….

  • james

    I agree to this, throw out the lawsuit, it suffocates innovation and job creation and makes these corporations a monopoly which suffocates the economy!

  • JCJ Bike

    20 years ago, drug tests were almost unheard of and now they are common. Non-competes used to be for senior level execs who had financial insulation if something went bad so they didn’t have desire to go to the competitor.

    Now, these non-competes are bleeding down and this is not good for the workforce.

  • no thank you

    I love how these tech titans are all about the free market, except when it comes to the free market for talent. Double-standard much?