When you sign a non-compete agreement in exchange for $325,000 as part of a severance agreement, you should avoid going to work for your prior employer’s rival (at least for awhile).
Former Amazon executive, Daniel Powers, signed a severance deal that he would not go work for the competition for at least 18 months. In exchange, Powers received $325,000. Rather than avoiding the “competition” and enjoying his severance pay, four months later Powers decided to accept a new job with Google, as the director of cloud platform sales.
While non-competes are not valid in California, the lawsuit that was filed by Amazon on Friday will likely stand as it was filed in Washington’s King County Superior Court. In a similar case, a former Microsoft exec was prevented from taking a job with Salesforce.com last year in King County court.
Amazon’s primary concern is that Powers will take his knowledge of Amazon’s cloud service business to one its largest, if not the largest, cloud services competitor. Powers’ lawyer argued that Powers is not violating the terms of his non-compete because he agreed to limitations on his use of information and his customer contacts from Amazon. You can view the complaint against Powers here.
Moral of the story: if you want to avoid being sued, then don’t sign a non-compete with one of the largest cloud services companies in the world and then go work for its biggest rival within four months of leaving.