Seattle’s thriving tech hub has earned it the reputation as a sort of Silicon Valley of the Pacific Northwest in recent years, owing in large part to the growth of cloud computing. Startups and tech giants alike have flocked to the Seattle area to scoop up talent churning out of the creator and most dominant player in the cloud industry: Amazon Web Services (AWS).
The resulting recruitment wars have spawned a flurry of high profile lawsuits filed by Amazon against employees trying to move to Alphabet Inc.’s Google cloud unit show the limits of the Washington non-compete act.
The latest Amazon suit seeks to prevent employee Brian Hall from taking a VP role at Google cloud’s marketing group. Citing the non-compete clause Hall signed when he joined AWS two years ago, Amazon alleges that his move to Google could do “immediate and irreparable harm” to AWS, given that Hall “helped develop and knows the entire confidential Amazon cloud product roadmap for 2020-21,” Amazon said in its complaint filed in King County Superior Court in May.
At least five senior Amazon employees including Hall have been sued by the Seattle-based company after departing for Google since 2012, according to court filings and news reports cited by Bloomberg. In 2019, Amazon convinced a federal judge to limit the role of former AWS sales executive Philip Moyer who took a similar job at Google cloud.
Amazon is unique among peers in its attempts to enforce non-compete clauses, Bloomberg writes, in part because many of those Silicon Valley-based companies are restricted by California law.
“Washington state, home to Amazon’s Seattle headquarters, has no such prohibition, giving companies wide latitude to enforce non-compete clauses even in cases in which there is no evidence that former employees sought to steal trade secrets or make use of confidential information,” Bloomberg said.
Employment lawyers told Bloomberg that Amazon’s relationship with Redmond-based Microsoft, another key cloud competitor, isn’t quite as litigious when it comes to non-competes, suggesting to some that Google may be regarded as a more immediate threat to AWS.
Gov. Jay Inslee sought to rein in the abuse of non-compete agreements with the “Non-Compete Act,” that went into effect in January. But there are limits to the non-compete act. The law applies only to employees who make less than $100,000 per year, exempting most Amazon tech workers from its protections. Law makers said Amazon lobbyists played a role in reducing the law’s salary threshold from $180,000 to $100,000.
Similarly, Washington Attorney General Bob Ferguson has succeeded in nearly eliminating the use of no-poach clauses in the state, but only for relatively lower-wage employees working for corporate franchises like Jimmy John’s.