Apple, Google, Adobe And Intel Have To Face The Music Over Collusive Hiring Practices

from the good dept

It’s been nearly five years since we wrote about a DOJ investigation into collusive activity between a number of technology giants, in which the companies basically agreed not to poach employees from one another in an effort to keep salaries and employee turnover down. As the details have come out over the years, they’ve looked worse and worse, with Steve Jobs acting as sort of a ring leader — or really more of a mob boss — threatening retaliation (via patent infringement lawsuits) against companies that didn’t obey the “rules.” It’s one thing to want to be careful about hiring practices to avoid angering a partner, but it’s quite another to set up an official agreed-upon policy between a bunch of companies not to go after certain employees.

While some companies have already settled (and a few others likely involved in the agreements have so far escaped lawsuits), Apple, Google, Adobe and Intel have been trying to get a class action lawsuit built off of the DOJ’s efforts thrown out. That effort failed on Friday, meaning that it’s likely that these four remaining companies will try to work out a settlement, rather than go through a full trial.

As we’ve discussed for years, part of what actually made Silicon Valley Silicon Valley is the ease with which employees could switch jobs, often between competitors. Multiple studies have made it clear that greater job switching within an innovative industry is actually much better for that entire industry. With job shifting comes important cross-fertilization of ideas, allowing the bigger breakthroughs to happen faster, opening up new opportunities. Without that kind of job shifting, knowledge gets stuffed into silos, and overall innovation gets held back and stymied. In fact, if you look at the success of basically all four of the companies in this lawsuit, you can point to evidence of how the easy shifting of jobs was a key part of important breakthroughs that created tremendous opportunities and innovations (hell, two of the three members of Intel’s founding team were once part of the traitorous eight, who left Shockley Semiconductor to form Fairchild Semiconductor — only to go on to form Intel, AMD and a bunch of others). Job hopping, poaching employees and the like often get a bad reputation, but the research is pretty clear that it was a key factor (according to some, the key factor) in allowing Silicon Valley to become a hub of innovation.

Hopefully, the end result of the DOJ efforts and these class action lawsuits is to maintain an innovation economy where job hopping and information sharing is empowered, rather than hindered.

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Companies: adobe, apple, google, intel

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Comments on “Apple, Google, Adobe And Intel Have To Face The Music Over Collusive Hiring Practices”

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Ninja (profile) says:

This type of collusion is very, very common among players of the same field. I’m seeing it in the sanitary sector here. I wish such crackdown that is happening against these big players started happening everywhere. If you work in a sector that is limited/focused you are basically screwed if you go looking for other positions in the competition. You begin to be treated like poison.

Anonymous Coward says:

The most outrageous part of all this is that American companies want to outsource in the name of free market capitalism. They want to outsource to get cheaper labor and avoid hiring Americans. But then they want to force Americans to pay higher prices by preventing them from buying foreign products (ie: import tire tariffs/taxes among others, the pharmaceutical industry lobbies to prevent consumers from buying drugs abroad, IP related import restrictions, etc…).

American companies want to force consumers to pay higher prices by passing strict anti-competitive laws (ie: IP laws, govt established taxi cab monopolies, govt established cableco monopolies, among the many many anti-competitive laws passed here). They want to force us to buy from a select few corporations that get their labor abroad for cheaper without allowing us to create our own competing product due to an abundance of patents and other laws that prevents competition.

As someone else pointed out, they basically just want a distribution monopoly. They want free market capitalism for themselves but not for the consumer. They want it both ways, they want to have their cake and eat it too.

Anonymous Coward says:

Multiple studies have made it clear that greater job switching within an innovative industry is actually much better for that entire industry

It may be better for the industry, but it often has bad results on the incumbents; where are Shockley Semiconductor to form Fairchild Semiconductor today compared with Intel. Anti-poaching is more about protecting the ‘captains of industry’ than the workers. If a company fails, the ‘captains’ may have to subsist on their millions in the bank, while the engineers can usually get another job.

Geed says:

Steve Jobs started Apple by poaching engineers from Atari! Al Alcorn who was a top dog at Atari noticed how engineers he hired were jumping to Apple and he called Jobs on it a few times who promised it would never happen again but, of course, it happened again. So Alcorn halted production of Atari videogame system hardware and told his engineers they would create a similar computer and take over Apple’s share of the computer market (remember, Apple was quite small at this time). News leaked out and finally Jobs called Alcorn and simply said “Message received” and that’s how Al Alcorn, who does NOT get enough recognition today for his accomplishments, schooled old “Snob Jobs”. The man is my hero for smacking that pompous ass a few rungs down the ladder.

beckola (profile) says:

It should be wrong

I was actually surprised when I read that there were portions of this type of behavior that was legal. I completely understand that intellectual property can and should be protected. For instance, you can’t have a person working on a project be able to be poached and bring that information to another company. But that is easily achieved through an employment contract.

But I don’t see why anything beyond that could be considered legal. It seems to me that these companies should be more than just fined and some people should be criminally charged.

In addition, I wonder if anyone employed by one of these companies could now sue their current or former employer? All this is fictional but would there be a case for saying I was working for X company and not being paid what company Y and Z were paying for a similar position. I saw companies Y and Z were advertising for my position but was continually ignored when I tried to contact them. Due to this I ended up going joining a startup I wouldn’t have joined if I was able to market myself effectively to the SV firms in this agreement and lost $32M, got divorced and am now work for 1/2 of what I’m worth. Thus my old company caused me $50M in lost income and $10M in mental distress.

Just saying that if you look at it that way there might be some plausibility that we could see a few cases like this pop-up.

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