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.

Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Ninja (profile), Mar 31st, 2014 @ 3:54am

    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.

     

    reply to this | link to this | view in thread ]

  2.  
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    Anonymous Coward, Mar 31st, 2014 @ 6:21am

    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.

     

    reply to this | link to this | view in thread ]

  3.  
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    Anonymous Coward, Mar 31st, 2014 @ 6:22am

    Re:

    They want to force us to pay high prices but they don't want to provide us with the jobs necessary to pay those prices. Not only do they not want to provide us with those jobs but they don't want us to create them on our own without some law preventing it.

     

    reply to this | link to this | view in thread ]

  4.  
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    Anonymous Coward, Mar 31st, 2014 @ 6:29am

    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.

     

    reply to this | link to this | view in thread ]

  5.  
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    Anonymous Coward, Mar 31st, 2014 @ 6:31am

    Re:

    It's amazing how all these corporations preach 'free market capitalism' but then they expect anti free market laws to protect their 'trade secrets'.

     

    reply to this | link to this | view in thread ]

  6.  
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    limbodog (profile), Mar 31st, 2014 @ 6:34am

    "Don't be evil," Google.

     

    reply to this | link to this | view in thread ]

  7.  
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    Geed, Mar 31st, 2014 @ 7:02am

    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.

     

    reply to this | link to this | view in thread ]

  8.  
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    ysth (profile), Mar 31st, 2014 @ 7:38am

    cross-fertilization of ideas

    I'm afraid some would consider that more as theft.

    Wonder to what degree that played a role in motivating the collusion.

     

    reply to this | link to this | view in thread ]

  9.  
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    Anonymous Coward, Mar 31st, 2014 @ 7:51am

    Re:

    Plus making the entire company/industry/country worse off for personal is the basic mode of operation for sociopaths.

     

    reply to this | link to this | view in thread ]

  10.  
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    Anonymous Coward, Mar 31st, 2014 @ 8:17am

    ...And suddenly, the Apple/Samsung lawsuit makes sense.

     

    reply to this | link to this | view in thread ]

  11.  
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    jupiterkansas (profile), Mar 31st, 2014 @ 8:21am

    Re:

    But wouldn't it have been more interesting for Atari to have created a competing computer?

     

    reply to this | link to this | view in thread ]

  12.  
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    Anonymous Coward, Mar 31st, 2014 @ 9:13am

    That headline plus from the good dept part probably made the "techdirt is a google shill" crowds heads explode

     

    reply to this | link to this | view in thread ]

  13.  
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    Jay (profile), Mar 31st, 2014 @ 9:22am

    Re: Re:

    ... That's how capitalism works. The ones at the top want all the benefits and those at the bottom get the least amount of wages for the pursuit of profits over people.

     

    reply to this | link to this | view in thread ]

  14.  
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    John Fenderson (profile), Mar 31st, 2014 @ 9:24am

    Re: Re:

    I always considered the Atari 400 (and later, 800) as being Apple competitors. Which is a bit of an insult to Atari, as those machines were far superior to Apple's offering.

     

    reply to this | link to this | view in thread ]

  15.  
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    John Fenderson (profile), Mar 31st, 2014 @ 9:26am

    Re:

    Nah, it won't even register. If all the article published here before that called Google on their bad behavior didn't register then this won't either.

     

    reply to this | link to this | view in thread ]

  16.  
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    Geno0wl (profile), Mar 31st, 2014 @ 11:22am

    Google - "Do no Evil*"



    *To the public

     

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  17.  
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    Ninja (profile), Mar 31st, 2014 @ 11:45am

    Re:

    Somewhat this will be twisted into "Mike is a Google shill" at some point. Do not underestimate the power of the real shills.

     

    reply to this | link to this | view in thread ]

  18.  
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    beckola (profile), Mar 31st, 2014 @ 12:08pm

    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.

     

    reply to this | link to this | view in thread ]

  19.  
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    Mike Masnick (profile), Mar 31st, 2014 @ 4:12pm

    Re:

    That headline plus from the good dept part probably made the "techdirt is a google shill" crowds heads explode


    Notice that all of the usual suspects on that particular topic are astoundingly missing from this article's comments, even as they're busy on other stories today.

     

    reply to this | link to this | view in thread ]

  20.  
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    Pragmatic, Apr 2nd, 2014 @ 5:30am

    Re: Re:

    I don't know why they bother, Mike. If it's about constantly repeating crap till people believe it, Goebbels-style, it fails because we call them on it every time they do it. Really, they might as well give up.

     

    reply to this | link to this | view in thread ]


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