Amazon filed suit against its former international Chief Financial Officer Christopher Zyda in U.S. District Court on Sept. 17, maintaining that Zyda violated his employment contract when he jumped to eBay earlier in the month.
U.S. District Judge Barbara Rothstein ruled only that the federal courts had no jurisdiction in the matter, according to Amazon and the former employee's attorney. Amazon may pursue the case in another court.
Amazon watchers say the case is a signal of the intensifying turf war between e-commerce nemeses Amazon and eBay, which increasingly tread on each other's businesses as they expand.
"We're disappointed in the judge's ruling regarding jurisdiction in this case," Amazon spokeswoman Patty Smith told CNET News.com Monday evening. "But it in no way alters our position that Mr. Zyda's non-competition and confidentiality agreement with Amazon should prevent him from accepting the position with eBay."
She added that Amazon will probably pursue the case but declined to say in which court. Zyda's attorney, Warren Rheaume, said he expected the case would continue in California since eBay has filed suit there to prevent Amazon from blocking Zyda's employment with the auctioneer.
"California has a strong public policy on people's ability to change jobs," Rheaume said.
An eBay spokesman declined to comment.
Amazon said in its Sept. 17 filing that it was concerned that Zyda might share confidential information about Amazon's business strategies with eBay, which Amazon termed its "fiercest competitor."
Zyda resigned to become a vice president in eBay's finance and investor-relations department.
In court documents filed in California, lawyers for eBay called Amazon's non-competition agreement and legal actions "unlawful, unfair and fraudulent."
Before Monday's decision, Amazon had won a temporary restraining order that prevented Zyda from joining eBay.