Non-compete agreements are common in the business world. These legally binding documents prevent scientists, researchers and experts from sharing proprietary secrets with other industry leaders if they are hired elsewhere. These non-compete agreements do not always protect employee interests, however; many high-level workers are prevented from exercising the full scope of their knowledge. The agreements may be binding for a period of months, though they can be applicable for years at a time. A recent case out of Seattle has shown that restrictive noncompetition clauses can be circumvented to protect employee rights.
The case involves a worker who was hired by Google from competitor Amazon in 2010. Amazon was attempting to limit the scope of the sales executive’s work, claiming that he would violate the non-compete agreement if he worked for Google. A federal judge ruled in favor of the executive and Google, largely because the man’s new employer had crafted an adequate contract to protect all parties.
The man had initially been restricted from soliciting Amazon customers for six months, based on the offer letter created by Google. A federal judge upheld that decision, striking Amazon’s request for an 18-month restriction on the man’s work activity. In other words, he will be able to solicit new clientele from the Amazon consumer base as soon as the six-month probationary term expires in March.
Experts say the case reveals several important attributes of non-compete agreements, particularly in jurisdictions where those documents are commonly enforced. Employees are urged to carefully consider all documents they sign because agreements can have an impact on future career opportunities. Although the executive in this case was green-lighted to solicit consumers from his old firm after just six months, many judges may not be so lenient. It is unlikely that a judge will totally void a non-compete agreement; rather, he or she will probably shorten the agreement’s terms to be more palatable to the employer and newly hired worker.
Source: GeekWire, “Legal lessons from Amazon’s ‘noncompete’ battle with Google,” William Carleton, Dec. 31, 2012.