Non-competition agreements provide a great way for employers to protect their customer lists, employees, technology, and more. However, if they are not properly drafted, they are difficult to enforce completely. Amazon, the online retail giant, learned this lesson the hard way recently.
Philip Moyer, a former sales executive for Amazon’s cloud computing unit, known as AWS, left and went to work for Google Cloud in financial services. At Amazon, he also worked in financial services. When he left, Amazon moved to enforce his non-compete agreement. The Court held Moyer could not contact AWS’s existing customers, former financial service customers or ones that were considering both companies.
Amazon, however, argued Moyer should be even more limited in his job duties at Google since in his former role he had access to Amazon’s business plans for the cloud computing arena generally. The Court found this argument a stretch and said his access to that information was merely tangential. Therefore, the Court rejected Amazon’s request to prevent Moyer from working for Google all together.
This case is a classic example of the struggle of non-compete agreements. Employers oftentimes want to prevent a rock star employee from competing with them all together. However, they cannot articulate a compelling reason to do so outside of the employee’s actual job function. Therefore, when an employer goes to enforce the broad agreement, a Court is not inclined to enforce all of its terms because it prevents the employee from earning a living. Therefore, if the Court enforces the agreement at all, it is on some reduced basis. This highlights the importance of careful drafting and really getting to the heart of what needs protecting on the front end and recognizing when the employer is over reaching.
Brody and Associates regularly provides counsel on employment agreements, covenants not to compete, and employment litigation in general. Over thirty years, we have learned the realistic bounds of such agreements. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
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