Gary D. Blachman is a partner in thompson Hine LLP`s corporate benefits and executive compensation group. Mr. Blachman represents pension plan sponsors in the event of controversy before the Internal Revenue Service and the U.S. Department of Labor, advises agents on their obligations and commitments under the Employee Retirement Security Act, and advises employers globally on issues relating to workers` benefits in employment contracts and corporate transactions. Amazon`s liberal use and enforcement of non-compete rules is the subject of controversy and debate in the tech sector. Angel investor Chris DeVore criticized the lawsuit and the Washington state law because they “did nothing to stop this abusive practice of working by the state`s most influential employers.” While it may be difficult for employers to impose competition bans on Washington, Amazon was able to bring the case because of the structure of the new law. Companies can attempt to impose a non-compete clause in the state if the deal meets the following criteria: AWS is by far the largest company in the cloud computing space, a market also challenged by Microsoft Corp. and Google.
Hall`s complaint shows the extent to which Amazon, which has rarely publicly debated competition, sees Google as a threat to the lucrative and competitive market for rented computing services and software. Labor rights advocates say that despite a steady flow of employees between Amazon and Microsoft, which is headquartered outside Seattle, the companies have generally not sought to impose non-compete rules against each other. 1. The most common argument in favor of broad competition bans like this is roughly this: employees are introduced to strictly confidential information and new employers should not be able to commit corporate spying to backdoors by hiring their employees. This argument, of course, ignores the fact that confidentiality agreements in employment contracts are “fully enforceable” in any U.S. state (whether or not the information in question is considered a trade secret has the coke formula) and do not have the additional negative effect of preventing people from earning a living. If a company opts for a non-compete clause, it`s not about protecting its top-secret strategy – in this case, “build a lot of things that customers like and sell as services!” – it`s a matter of control. Courts are often reluctant to impose non-compete rules covering the entire United States, let alone the entire world, according to Garden, who finds that the “relevance” standard is the main legal test of agreements.
But different states have very different conceptions of what is considered reasonable. (In an obvious hint, Amazon`s agreement states that the signatory agrees that “any agreement and restraint in this agreement be appropriate.”) California law prohibits the application of non-compete rules. Oregon, North Dakota and Colorado have also imposed strict non-compete restrictions. “Then there are states like Texas and Florida, and a number of others that are at the other end of the spectrum,” Lobel says, “that consider it a simple contractual issue, and if you sign the treaty and break it, then you`ve violated the treaty, and they`re going to enforce it, and they`re going to easily issue injunctions.” Non-compete clauses have traditionally been associated with highly skilled jobs for which employees can receive specific training in exchange for signing a restrictive contract and learn trade secrets that allow for professional promotion. . . .