IANAL, but I have signed non-competes before. I am sure that the contract he signed states that disputes must be litigated in WA.

IANAL, but this is what I know:

* In the US, there are three types of jurisdiction: personal, subject matter, and territorial jurisdiction. * Personal jurisdiction of one state over residents in another can be established by contact with the state, and by contract submitting to personal jurisdiction of a state. It is necessary to file a case against someone in a state; it is likely that Microsoft has a strong claim to personal jurisdiction here. * Subject matter jurisdiction relates to what types of matters a court can consider - employment contractual disputes are almost certainly within the subject matter jurisdiction of the court. * Territorial jurisdiction. This doesn't appear to be a barrier to bringing a lawsuit, but it can affect the enforceability of a courts judgement over actions in another state. Because of Article IV, part 1 of the US Constitution (the 'Full Faith and Credit Command'), States are expected to recognise each other's judgements, but there are exceptions. In Baker et al. v. General Motors Corp, 1998 (http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=CASE&...) the Supreme Court clarified that there was no general public policy exception to the full faith and credit command, but noted that "orders commanding action or inaction have been denied enforcement in a sister State when they purported to accomplish an official act within the exclusive province of that other State or interfered with litigation over which the ordering State had no authority".

Generally the contract writer (ie. employer) gets to pick where the contract is tested. In this case MSFT is in Washington.