April 21, 2012
Apple, Google, Etc To Answer For Anti-poaching Agreements
Michael Harper for RedOrbit.com
Apple and Google are no strangers to court. This time, they, along with 4 other tech companies, will be heading to court to face an antitrust lawsuit over claims they conspired not to “poach” one anthers employees.The companies had asked the court to dismiss the case, but District Judge Lucy Koh in San Jose, California rejected their request. According to Judge Koh, the companies “Do Not Call” agreements among the defendants “supports the plausible inference that the agreements were negotiated, reached, and policed at the highest levels” within the companies.
Judge Koh then went on to suggest the manner in which these companies reached these internal agreements suggested possible foul play.
“The fact that all six identical bilateral agreements were reached in secrecy among seven defendants in a span of two years suggests that these agreements resulted from collusion, and not from coincidence,” Koh added, according to Reuters.
“For example, it strains credulity that Apple and Adobe reached an agreement in May 2005 that was identical to the “Do Not Cold Call” agreement Pixar entered into with Lucasfilm in January 2005,” Judge Koh added.
Joining Apple and Google in the lawsuit are Adobe Systems Inc., Intuit Inc., Lucasfilm Ltd. and Pixar.
The class action suit against these companies was brought by 5 software engineers who claim the companies conspired with one another to lower employee pay. The software engineers claim their employers conspired not to hire from one another, thus stalling the skilled labor market.
Similar claims have already been brought to court, as a 2010 investigation by the Department of Justice ended with the companies saying they would not take action to restrict competition, such as setting limits on cold-calling and recruiting.
During this investigation, the companies were able to reach this conclusion without admitting any wrong doing, however.
Judge Koh believes such significant and company-wide policies must have come from the top of the organizations, and as such suggests there could have been some foul play.
The late Apple CEO Steve Jobs is being mentioned in the case as well, as one of the plaintiffs refers to an email exchange between Jobs and Schmidt, CEO of Google and, at the time of the email, a board member of Apple. This email could be damning, as it shows both CEOs cooperating to stop the transfer of an employee from one company to another.
According to Reuters reporter Jonathan Stempel, a Google recruiter had tried to poach an Apple employee. When Jobs found out about this, he sent a “polite” email to Schmidt, saying, “I would be very pleased if your recruiting department would stop doing this.”
Surprisingly, Schmidt consented, and sent an email down his chain of command in order to stop the transfer.
“Can you get this stopped and let me know why this is happening?” Schmidt wrote to undisclosed recipients as he forwarded his message from Jobs.
According to CNET, In 2009 Apple and Google were said to have had an “unofficial agreement” not to hire one another employees. Despite being unofficial, the effect was being felt by software engineers.
The case remains on case for a June 2013 trial.