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Amazon Takes Another Swing at Google in the Non-Compete Wars

By Gabriella Khorasanee, JD on July 07, 2014 | Last updated on March 21, 2019

In the tech industry, a company may only be as strong as its non-compete agreement -- at least that's what Amazon thinks. Back in 2010, Amazon sued a former Sales VP Daniel Powers, after he accepted a new role at Google. In a bit of déjà vu, Amazon is again suing another one of its former employees that went to Google.

Will this case be more successful? We'll have to wait and see.

The Powers Case

The case was originally filed in Washington state court, but removed to federal court, reports GeekWire. While the judge held that Powers "may not directly or indirectly assist in providing cloud computing services to any current, former, or prospective customer of Amazon about whom he learned confidential information while working at Amazon," he refused to enforce other sweeping provisions of Amazon's non-compete agreement.

Judge Richard A Jones stated that "Amazon has failed to articulate how a worldwide ban on cloud computing competition is necessary to protect its business." He differentiated between a "ban on working with former customers [which] serves to protect the goodwill [Amazon] has built up with specific businesses" and between "a ban on competition generally," essentially holding that Powers was free to find new cloud computing customers.

The Szabadi Case

That was then, and this is 2014. Now, Amazon is suing another former employee, Zoltan Szabadi, who went to work at Google's Cloud Platform for violating his non-compete agreement, reports GeekWire. The company chose to sue in Washington again, because of the "favorable climate for non-compete deals in Washington," according to GeekWire, which noted that these agreements don't usually make the cut in California, where Google is based.

The Szabadi complaint is largely the same as the Powers complaint, but it appears that Amazon has sought a "more specific injunction" than the one sought in the Powers case. Here, Amazon is seeking to prevent Szabadi "from engaging in any activities that directly or indirectly support any aspect of Google's cloud computing business with partners or resellers." Szabadi is fighting back and "positioning his case as a new legal test for tech-industry employment agreements," and challenging the validity of Amazon's non-compete agreement saying it's excessive and overbroad, says GeekWire.

While this case is in its initial stages, employers, employees and lawyers in the tech industry will be waiting to see if a new test or standard for non-compete agreements is accepted.

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