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

Legal Issues

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.

Filed Under: anti-poaching agreements, collusion, hiring, innovation, silicon valley, steve jobs, technology
Companies: adobe, apple, google, intel