Through documents made public in court filings, it has been revealed that back in 2007 former Apple CEO Steve Jobs directly asked former Google Chief Executive Eric Schmidt to stop trying to recruit an Apple engineer. The 2007 email has become public in the face of civil litigation against Apple, Google, Intel, Adobe and Pixar (sold by Jobs to Disney in 2006). The proposed class action suit was brought by five software engineers who accuse the companies of conspiring to keep employee compensation low by eliminating competition for skilled labor.
Last year, the 5 companies settled a DOJ probe by agreeing to bar themselves from agreeing not to poaching each other’s employees. To say that I am surprised that something like this is happening wouldn’t be true, in fact I’m sure it’s happening between a lot more companies than this. It only makes business sense, why would you want to agitate someone you might want to partner with in the future? The problem with this is that we have a open and free market, at least that’s what they tell us right? By having such “gentlemen’s agreements”, these companies make it impossible for employees to maximize their market value. For the most brilliant programmers and developers, their peak window isn’t huge and who are these companies or any company to begrudge them making the most of it.
The companies had asked a U.S. judge in San Jose, CA to quickly dismiss the case arguing that the companies engaged in an “overarching conspiracy,” but rather bilateral anti-poaching deals to protect collaboration. To their dismay, U.S. District Judge Lucy Koh said the civil lawsuit will proceed, although it may be split up into multiple potential class actions. What’s even more damaging is a 2007 note from Palm’s chief executive to Jobs saying that an anti-poaching agreement would be “likely” illegal. This means that the companies more than likely understood that the agreements were wrong and probably illegal and did it anyway. In another note Intel’s CEO Paul Otellini speaks of the “agreement” between Intel and Google saying they have nothing signed, it’s just a handshake “no recruit”. That would seem innocent enough except Otellini then goes on to express that he would not like this broadly known, I wonder why?
While I think that the evidence is damning, I think that with 5 of the richest tech companies in the business involved, they will stretch this out for quite a while and then ultimately settle for some undisclosed amount. Before all is said and done, I wouldn’t be surprised if even more companies are implicated.
If you want to look up the details for yourself, the case in U.S. District Court, Northern District of California is In Re: High-Tech Employee Antitrust Litigation, 11-cv-2509.