This week’s analysis on multi-cloud being a bad idea is once again pushed back by breaking news. In this case, AWS is suing a former executive, Brian Hall, under his non-compete agreement.
I’ve covered my thoughts on non-compete agreements in the past—it was the driver behind my decision to decline an AWS job offer several years ago—but I wanted to revisit them in light of this case. (We do a lot of AWS contract negotiation, but that’s usually a very different kind of contract!)
Let’s start with covering what the current situation is. Brian (I know him, so I can’t really refer to him as “schmoo” the way I referenced the defendant in my previous article on non-competes) was AWS’s VP of Product Marketing. He resigned from AWS and accepted a job as the VP of Product Marketing at Google Cloud. This is not in dispute.
This is a classic example of the distributed nature of Amazon getting in its own way. Sending the person who runs AWS Product Marketing to fill the same role at a competing company is a breathtakingly beautiful act of corporate sabotage. I mean, think about it: What’s the secret sauce he’s going to take with him? “Release a bunch of things with terrible names then market them incredibly poorly to infrastructure engineers?”
Marketing is, to be direct, not an AWS core strength. Having someone high up within that organization leaving for a competitor is a terrific way to ensure that they don’t get leapfrogged by that competitor.
Unfortunately, AWS Legal missed a memo and has filed a lawsuit—which is the exact wrong move here. The right move would have been to give him a glowing recommendation and send him a fruit basket.
Instead, AWS has now found themselves in the headlines again for an unforced error that makes anyone with other job options reconsider accepting an offer—or even interviewing at AWS at all. The damage that this blunder is doing on multiple fronts is incalculable!
Now, my commentary
First, Brian was AWS’s VP of Product Marketing. If you take a look at the scattershot marketing message around the plethora of AWS service offerings, the executive ultimately responsible for it all should, rather than being poached by a competitor, be immediately placed on a PIP.
Second, what Brian was reportedly told when accepting the job by Ariel Kelman (at the time, AWS’s VP of Global Marketing) was to the effect of “oh, don’t worry; AWS has never enforced that non-compete clause against someone at your level/in your role/in this department.”
When I encountered the same responses from AWS during my job offer situation, the attorney I spoke with laughed at that. “Of course they’re going to say that; it’s not legally binding and they want you to say yes. If they’re serious about that, they can put it in writing. If they don’t, you don’t want to sign it.”
AWS’s response was, unsurprisingly, “take it or leave it.”
I point out further that the non-compete is still scoped to all of Amazon rather than just AWS. It’s overbroad and could conceivably apply against Brian in virtually any job he were to reasonably accept for the remainder of the 18-month period.
I’ve seen some objections to my position in the past couple of days; allow me to turn them into strawmen and summarily dismiss them:
Brian is taking the exact same job at Google! This is what non-competes are for!
Yes. It’s a perfect test case for whether King County wants to see non-competes as congruent with public policy. It’s also a useful public datapoint as to why second guessing a role at AWS that isn’t in California might be in any given candidate’s best interest.
Further, it’s worth noting that, rather than scoping their non-compete agreements narrowly, AWS leaves them as broad as possible. It’s up to the judge in any given case to determine potential restrictions, ultimately leaving the taxpayers of King County responsible for the costs of arbitration.
It’s only for 18 months!
That’s a long time in cloud. GCP may well be deprecated before then!
As mentioned previously, I’d be in favor of a model wherein if AWS chose to enforce the non-compete, they’d be required to pay the former employee their full compensation for the duration of the restriction. That’s how it works in Europe, for instance.
AWS didn’t enforce the agreement against Ariel Kelman when he went to Oracle as their Chief Marketing Officer!
Ariel also lives in California, where non-compete agreements are almost universally considered unenforceable.
Google Cloud isn’t a serious competitor to AWS
Before this lawsuit, I would have agreed with you! AWS’s consideration of GCP as “a competitive cloud business” is the sort of admission that GCP should put up as a testimonial on their website.
On a similar note, I think that AWS may not have thought “filing a lawsuit against one of the best marketers they were able to hire” all the way through. I’ll be disappointed if this quietly drifts away without doing serious damage to AWS’s reputation.
At the VP level, the risk of not having to work is baked into the high salary they pay you
It’s AWS. They embrace “frugality” as a leadership principle. To that end, arguably the most surprising line in the complaint was this: “In 2019, Hall earned well in excess of one hundred thousand dollars per year, annualized.”
Contrast that with Google, whose compensation for VPs is astronomical even before you factor in the monstrous severance pay they receive before leaving under credible allegations of sexual harassment.
Without this agreement, what’s to stop Brian from taking Amazon’s confidential information to Google?
The NDA that’s enforceable in every jurisdiction, for one. A “functioning set of ethics” for another. Or is Amazon saying here that they don’t have a high ethical bar for its executive hires?
Amazon certainly hires people for strategic roles from competing companies. Nobody is suggesting that Amazon is leveraging trade secrets when they do this because it’s understood in business that this happens, and that people comport themselves ethically. When they don’t, it makes headlines.
Further note that Ariel, the person who Brian reported to, was based in California. If this were as big of an issue as is suggested, AWS would never have agreed to have such a strategic role filled by someone in a jurisdiction where the non-compete couldn’t be enforced.
It pains me to say it, as I genuinely like most of what AWS does. But the takeaway here for anyone considering a role at AWS is this: No one is safe.
Other takeaways to keep in mind:
They’re never nicer to you then when they’re trying to hire you. If they mock your concerns about the non-compete? RUN. Amazon is apparently incredibly easily scorned. They will hurl fire after departed employees and use their own reputation as kindling. Brian Hall is the greatest cloud marketer in the world. He hasn’t even started yet, and he’s already made a Google job offer more compelling than its equivalent at AWS by a landslide. He’s gotten me saying nice things about Google—and that shouldn’t be possible! Non-competes are clearly being used to provide a chilling effect for their existing employees. Very few companies will go up against Amazon in a courtroom; it’s far easier for most to simply withdraw the offer and select another candidate. I can’t abide a bully. If, after losing your job, you can’t afford to weather an 18-month period in which your ability to work for any company Amazon deems to be a competitor, you should probably look into working elsewhere. There’s absolutely nothing in the non-compete that says your departure must be voluntary. If AWS had decided to fire Brian for any reason, they could just have easily have brought this same suit against him. Both Brian and I are the very whitest of guys, steeped in the purest expression possible of techbro privilege. If this is how it plays out when someone with that overwhelming accelerator pushes back, imagine how it might impact people of color, women, and other folks who aren’t dramatically overrepresented.
Non-competes are bad news for everyone. The incredibly talented folks at AWS deserve better, massive amounts of goodwill among AWS’s candidate pool are being torched by moves like this, and I fail to see any way that this situation benefits customers.
If you think I’ve gotten it wrong, okay: make your case on Twitter!