Tech

Amazon is suing a cloud employee who left for Google, rekindling the debate over non-compete agreements

Key Points
  • Amazon is challenging former executive Brian Hall in Washington state court after he took a job at cloud rival Google.
  • IBM and Microsoft have mounted similar lawsuits.
  • Some technology workers called for companies to abolish agreements that can enable these legal attacks.
Brian Hall at an event promoting Microsoft's Surface 2 computer in 2013, when he worked for that company.
TORU YAMANAKA / AFP

People are speaking out against state rules that enable companies to block employees from switching their alliances to competitors after Amazon sued an employee who left its cloud unit for a new role at Google's cloud business.

The uproar brings back to the fore the topic of whether laws should allow companies to mount legal attacks against employees who decamp to rivals, while also showing how fiercely large companies are challenging one another in the cloud.

Amazon and Microsoft, two of the world's most valuable companies, have both filed lawsuits against employees to block them from immediately joining competitors. Last year the legislature in Washington, where Amazon and Microsoft are based, imposed restrictions on non-competition clauses, including one that limits these agreements to workers who earn more over $100,000 per year.

The flap started when former Amazon Web Services product marketing vice president Brian Hall accepted the same position at Google after being passed over for a promotion, Amazon said in its lawsuit, which was filed last month in Washington state court. After Pacific Northwest technology news website GeekWire reported on the lawsuit, Hall updated his LinkedIn and Twitter profiles to describe himself as a "VP in purgatory" at Google. 

On Monday, Hall tweeted a link to an article about the lawsuit, saying simply, "ummm some personal news?..." The tweet garnered over 14,000 likes.

On Tuesday, Amazon sought a temporary restraining order that could prevent Hall from working on cloud marketing at Google, including editing speeches for the online-only cloud conference Google will start next month, one of the tasks Google identified for Hall to work on before a preliminary injunction meeting scheduled for July 31. 

Hall, who was at Microsoft for more than 20 years before joining Amazon, signed a "confidentiality, noncompetition and invention assignment agreement" with Amazon before he joined the company in July 2018. The agreement barred him from working for a competitor for 18 months.

Amazon noted that Hall helped to assemble AWS' product roadmap in 2020 and 2021, where he had access to information like sales goals. Amazon argued that Hall couldn't market Google products without drawing on this proprietary information, giving Google an unfair advantage.

Hall's lawyers countered by saying his position at Google wouldn't require him to draw on sensitive information he was privy to at Amazon. 

Former AWS marketing vice president Ariel Kelman had led Hall to think Amazon wouldn't enforce the non-compete agreement and said he hadn't seen AWS use it against a someone in marketing, Hall's lawyers argued. Kelman himself in January left Amazon to take a job as Oracle's new marketing chief, and Amazon did not go after Kelman. 

However, Amazon has repeatedly gone to court over the agreements.

In 2014 Amazon sued Zoltan Szabadi, an AWS employee who worked on partnerships, who went to Google. Szabadi still works in Google, according to his LinkedIn profile. In 2017 Amazon went after former AWS vice president Gene Farrell when he sought to join software company Smartsheet; Amazon later dropped the case. And earlier this year Amazon dropped a suit it had brought against Philip Moyer, a managing director of financial services at AWS who became a vice president at Google Cloud.

Amazon controls the biggest share of the cloud infrastructure market, with about 48% in 2018, according to an estimate from technology industry research company Gartner. That prominence has helped AWS turn into Amazon's main generator of operating profit. Amazon declined to comment. Google, with an estimated 4% of the cloud infrastructure market in 2018, did not immediately respond to a request for comment.

The debate over non-competes

Several technology industry workers have begun sounding off anew about laws permitting non-compete rules.

In general, California courts have refused to enforce non-compete agreements for employees who live in the state, even if they signed the agreements in another state. In 2010, HP tried to stop its former CEO Mark Hurd from joining arch-rival Oracle, but dropped the suit after a few days, instead forcing Hurd to sign an agreement not to disclose proprietary information and give back some restricted stock grants.

But companies can exercise various types of non-compete agreements in Washington, Massachusetts, New York and other states, according to a guide maintained by Boston law firm Beck Reed Riden. In 2018 New York-based IBM filed suit against its former chief diversity officer, Lindsay-Rae McIntyre, for taking the same position at Microsoft in a case that was quickly settled.

Some tech workers are speaking out now against them now.

"Washington state should abolish non-competes," Christina Warren, a senior cloud advocate at Microsoft, wrote in a Monday tweet in response to Hall's "personal news" tweet.

Hal Berenson, who worked for both Microsoft and Amazon, tweeted on Tuesday that it's "definitely time to sunset" non-compete clauses.

Brad Fitzpatrick, a former Google staff software engineer, said on Twitter on Monday that he interviewed at AWS recently but things came to a half after he made it clear he wouldn't sign an agreement with non-compete language.

Here's the lawsuit:

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