October 29, 2012
Amazon Takes Former VP To Court For Joining Google
Michael Harper for redOrbit.com — Your Universe Online
In June 2012, the relationship between Amazon and Powers turned a little sour. Amazon has said they originally planned to simply fire Powers, but later decided to give him a chance to resign with a $325,000 severance package instead. The $325,000 didn´t come without some strings attached, of course. In order to receive his severance, Powers had to promise he wouldn´t take a job with one of Amazon´s competitors for 18 months.
Powers agreed, took the money, and the two parted ways.
Then, less than 4 months later, Powers took a job at Google, a direct competitor in not only the mobile electronics space but, more importantly to the story, the increasingly competitive cloud industry.
Now, according to Geek Wire, who first reported the story, Amazon is suing Powers and seeking an injunction which would prevent him “from engaging in any activities that directly or indirectly support any aspect of Google´s cloud computing business.”
Amazon is clearly worried that Powers will be able to take what Amazon has learned about cloud services over the past 2 years and apply it to Google´s services. In addition, Amazon is concerned that Powers will begin helping Google take over existing Amazon customers and even go after future potential customers.
In the suit, Amazon says Powers learned the cloud computing market “top to bottom” when he came to Amazon after spending nearly a decade at IBM. This makes him a very dangerous liability, especially during a time when companies in the cloud services industry are fighting for every inch of ground (or cloud) they can find. In fact, Amazon clearly thought paying Powers $325,000 was money well spent if it meant keeping him out of the game for 18 months.
Now, Powers´ lawyer is fighting back against the suit, saying Powers isn´t “violating his obligations under the Non-competition Agreement because he and Google had agreed on certain minimal limitations on his use of information and on his customer contacts.”
As Geek Wire tells it, Powers may be able to get away with allegedly breaking his promise to Amazon. Noncompete clauses have in the past been upheld in Washington State, home to Amazon, if the terms of such an agreement are found to be reasonable it may do so again. Unfortunately for Amazon, this suit is filed in Google´s home turf of California, where the courts do not always look on these non-compete clauses so favorably.
As listed in the court documents, Amazon´s non-compete clause seems to cover all the bases:
“While employed by Amazon for a period of 18 months after the date Powers ceases to be employed by Amazon, Powers will not directly or indirectly, and whether or not for compensation, either on his own behalf or as an employee“¦or any other capacity knowingly accept or solicit employment with“¦any individual or entity that was a customer or client of Amazon.”
The clause even goes so far to prohibit Powers from soliciting compensation or employment from any entity which was in serious conversations with Amazon about being a customer or any entity which could have been a customer during his employment.