New King County Lawsuit to Test Validity of Non Competes & Confidentiality Agreements
Non compete agreements (NCA), confidentiality agreements, and trade secrets practices are three closely related but slightly different theories that employers use to protect their business in a post termination situation, particularly in sectors that rely on relationships for client retention. Once used primarily for high level executives in rapidly developing areas, they are now included in employment contracts at all levels and in numerous fields. They are also under attack in many states, and non competes are particularly unenforceable in California. Washington has stuck by a “reasonableness” standard in viewing these agreements, but has not really addressed the very tight and encompassing type of agreement we see so frequently now.
Now Amazon has fired a salvo to seek enforcement of its NCA in light of the flight of a business development executive from its cloud computing services subsidiary to a similarly titled position at Google. Amazon filed a Complaint in King County Superior Court on Friday, June 27 asking for seven forms of injunctive relief and attorney’s fees. In sum, Amazon asks the court to prevent the employee from engaging in any activity that would directly or indirectly support any aspect of Google’s cloud computing business with any “partner” for at least 18 months. All three of the protective theories (NCA, Confidentiality, and Trade Practices) are at issue in the Complaint, as well as asserting a breach of the common law duty of loyalty.
The battle of these two industry giants will of course impact all levels of businesses who seek to protect their clientele and methods of doing business through such agreements and covenants. In the short term, we look to whether Amazon is successful in procuring a preliminary injunction to prevent the ex employee from engaging in his Google job duties during the pendency of the lawsuit as this will tell us much about how the court will view the claims.