It's a bit more complicated. A non-compete is enforceable in CA if you own any equity of value that constitutes a loosely defined partnership (http://en.wikipedia.org/wiki/Non-compete_clause#Exceptions_-...). Further you may be blocked from selling the equity for years after leaving, resulting in years of legal non-compete enforcement. It's a messy case, but I've been advised by actual lawyer that when he sees equity structured in certain way it's for no other reason but to make this case.
Amazon should be smart enough to know they can't put in a clause that's too far-reaching and preventing people from working anywhere in the world. I view it as more or less of a threat and nothing more. They wouldn't come after you if you walked across the street to Microsoft, Yahoo, or Apple. It happens all of the time.
Amazon added a 12 month non compete clause to my 3 month long internship. Since I was planning to get another internship the next summer, it worried me that they'd think this made any sense at all. The HR recruiter essentially told me not to worry about it, it's never enforced.
I know you have limited negotiating power as an intern, but the best response to "don't worry, it's never enforced" is "If you don't plan to enforce it, then there's no point in me signing it".
Just to follow up on that (and agreeing that as an intern this probably wouldn't fly), but when I started at my current job the employment agreement had some intellectual property clauses that simply wouldn't work, since I do occasional client work on the weekends and contribute to open source projects. It was most likely because I was the first full-time software developer hire (previously, software was written by contractors). I simply told them I needed to make a couple of changes to protect both of us, crossed off the offending sections, and attached an amendment to the contract using some standard boilerplate I found online that protected both of our interests fairly. Everyone was cool with it, we signed it, and everything is copacetic.
> Amazon should be smart enough to know they can't put in a clause that's too far-reaching and preventing people from working anywhere in the world.
Actually, they can put in such a clause. There's a difference between "unenforceable" and "illegal". There's nothing to prevent Amazon from including such a clause in the contract, even if it is clearly unenforceable. The worst case scenario, from Amazon's perspective, is that a court simply rules that the clause is unenforceable (as happened in the example masklinn gave https://news.ycombinator.com/item?id=8600939 ).
The best case scenario is that Amazon can frighten an ex-employee with the threat of legal action if he accepts a job with a competitor. Even if the ex-employee knows that a court will likely rule the clause is unenforceable, he has to decide whether he wants to go to the hassle and expense of fighting Amazon in court.
Amazon could also use the clause as a pretext to dissuade potential employers from hiring the ex-employee. Again, while the potential employer might realise that the clause is unenforceable, they have to decide whether they want to take the risk of hiring someone who will then be sued by Amazon (while it may not affect the potential employer directly, the new employee will inevitably be distracted by the court case).
I would never recommend that anyone sign an employment contract with a non-compete clause, even if it's clearly unenforceable. Even setting aside the potential legal hassle if it goes to court, you want to think about why they've included such a clause in the contract. Either they don't realise that it's unenforceable (in which case you have to question how competent they are), or they know it's unenforceable but don't care (which suggests that they plan to use it to frighten/bully you, as described above).
Recently, I turned down a job because the company included a clause in the employment contract under which I would have been prevented from engaging in "any activity" that competed with the company (or its related companies), anywhere in the world, for two years after I left the company. In the relevant legal jurisdiction (Switzerland), non-compete clauses are legal but "must be appropriately restricted with regard to place, time and scope such that it does not unfairly compromise the employee’s future economic activity". This one clearly wasn't. Effectively, it would have prevented me from working in banking or fintech, which is pretty much all that I've done for the last 14 years. I consulted an employment lawyer, who confirmed that it would definitely be thrown out if it ever went to court, so I pushed back.
I have zero problem with clauses that prohibit me from poaching clients or hiring other employees but if a company's hiring me for my expertise and experience that I've gained before going to work for them, I don't think it's reasonable for them to try to prevent me from using that same expertise and experience at another company if I leave them.
In the end, they refused to remove or alter the clause, so I turned down the job.
In finance non-compete clauses are enforced with an army of lawyers. It doesn't really matter to them if they lose in the end or not, you may be in court for years. The flip side is that you get paid for this time.
One of my friends left a major hedge fund with a two year non-compete and hold me he would never even think of crossing their lawyers as they would stop at nothing to ruin his life as an example to others. The law real only helps you if you have the resources to use it.
There's a difference between non-compete clauses (that prevent you from working for a competitor after you leave - and are no longer being paid by - your now-former employer) and gardening leave (where you're still employed and getting paid, but you're sent home for the duration of your notice period). The idea behind the latter is that, by the time your gardening leave is over, your knowledge of clients, etc. is out of date and/or (in situations where you've been the primary point of contact or managed the the relationship with the client) you've been replaced.
In most EU countries, non-compete clauses require compensation. In Germany of Belgium, comp' must be at least half the gross salary, for the entire extent of the clause (limited to 2 years in Germany, 1 in Belgium)
And the NCC may still be done away with for being "unreasonable" e.g. it can not cover the whole country and prevent the former employee from working in the field.
I'm sure it does, it does everywhere else. But I think things are a bit different and higher stakes with executive level folks like the the one in question here. 18 months is not an eternity if one can "afford it". Ironically, that's what probably gave him prodigious free time to pursue legal action.
I know this was Washington, and I'm unfamiliar with the laws there, but I know in California it's nearly impossible to enforce a non-compete clause. [Here's a good read on the topic.](http://www.nytimes.com/2014/06/09/business/noncompete-clause...)