Big Tech Companies Agree To Pay Up Over Hiring Collusion

from the as-they-should dept

Last month, we pointed out that Google, Apple, Adobe and Intel would almost certainly settle, rather than face an ongoing lawsuit concerning their collusive hiring practices, in which they promised not to poach employees from one another in an effort to keep employees longer and (more importantly for them) to keep salaries down. That has now come to pass, with the four companies agreeing to pay out $324 million to settle the charges. This is good. As we noted in our original story, the hiring collusion was shameful and, worse, antithetical to the kind of job shifting and idea sharing that helped make Silicon Valley into Silicon Valley.

For many years, I've given a series of talks (often to foreign executives and government officials) about why Silicon Valley turned into Silicon Valley. Everyone assumes it's the obvious stuff about lots of venture capital or access to good colleges. And so they try to mimic that, back where they came from. But as you dig down into the Silicon Valley story, you quickly realize that, while those things helped, the true secret sauce is the easy job mobility here, with people constantly shifting jobs -- and sharing ideas across many different companies. What comes out of that is more innovation and the important big breakthroughs that have made this entire industry possible. A few top execs, led by Steve Jobs, tried to throw sand in those wheels, stupidly believing that it was more important to protect poaching of their own employees, ignoring how that also limited their own ability to cross-fertilize ideas and bring in top performers from other companies.

The history of Silicon Valley is littered with stories of job hopping, employment diasporas and the like. Look at how many successful companies that were formed in the past decade have some connection to PayPal, for example. Easy job mobility is a key factor in Silicon Valley to allow innovation to happen, and hopefully this ugly incident puts the issue behind the tech industry, and they can go back to actually innovating.

Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    That One Guy (profile), Apr 24th, 2014 @ 6:11pm

    Nice, but a little light

    That amount might seem pretty hefty for a smaller company, but it's split up between the lot of them, and with companies that big, $81 million might seem like a decent chunk of change initially, but at the same time it's an amount that'll barely scratch the surface of their yearly earnings.

    Not exactly likely to leave a lasting impression other than 'Don't get caught next time'.

     

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

  2.  
    identicon
    Anonymous Coward, Apr 24th, 2014 @ 8:39pm

    I agree, the fine is way, way too low. $81 million is like a mosquito bite, and doesn't deter anything like this from happening again. I'm sure this won't be the last time we hear about these types of employer schemes happening.

     

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

  3.  
    icon
    Andrew Norton (profile), Apr 24th, 2014 @ 8:57pm

    Exactly, sure it sounds a lot but do the maths, it works out to $5,000 an employee, and that's BEFORE the lawyers cut. In the first round, the lawyers took 25%. now the payout's $3,750.
    Two weeks wages, at most. Maybe a week's. Perhaps less.

    Wow.

    What a great deal...

     

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

  4.  
    icon
    trollificus (profile), Apr 24th, 2014 @ 9:04pm

    The named companies are no longer the agile, aggressive innovators of Silicone Valley past. They are the RCA, GE, Kodak and JC Penney of the 21st century. (if not already the tech equivalents of Exxon, ADM, the **AAs and Goldman Sachs)

    And with today's political/regulatory climate being so amenable to protecting "Big Anything", it's more likely they'll 'innovate' new and improved lobbying methods to protect their status and profitability than do anything to continue the vibrant and stimulating climate in which they themselves were formed.

    Sad, and sadly predictable.

     

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

  5.  
    identicon
    Andy, Apr 25th, 2014 @ 2:24am

    jobs

    It seems like every time there is a new revelation about Steve Jobs he comes out looking like a real jerk who abused his power, I hope that now he is not in the picture any more that the lack of innovation while he had any hand in goings on in the Valley will not come out and be lambasted as this one has been.

     

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

  6.  
    icon
    Ninja (profile), Apr 25th, 2014 @ 2:38am

    Re:

    That. Nowadays to actually become huge a company will need to have very favorable conditions: insanely innovative product that people want desperately, being lucky in the beginning by not catching the attention of all the patent trolls out there, not falling into the MAFIAA's radar.......

    Though times to be a starter.

     

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

  7.  
    icon
    Ninja (profile), Apr 25th, 2014 @ 2:42am

    Re: jobs

    The fact that Jobs was a genius and introduced awesome innovation into the market doesn't nullify the fact he was a jerk in quite many aspects. The contrary is also true.

    The Godwin path: Hitler was a genius if you think rationally. Doesn't invalidate the fact he committed horrendous crimes. And vice-versa.

     

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

  8.  
    icon
    PT (profile), Apr 25th, 2014 @ 3:13am

    I'm an engineer, getting on a bit now, and this sort of collusion has been a fact of life my entire career. Whenever there's a group of similar tech companies in the same area, you have to go outside the area even to get a job interview. Once you get out of the area for a while, though, any of those companies will hire you back.

    It can't be stopped, at least not so long as nobody goes to jail for doing it.

     

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

  9.  
    icon
    known (profile), Apr 25th, 2014 @ 3:16am

    Every MNC is a Pyramid/Ponzi scandal in globalization

     

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

  10.  
    identicon
    Anonymous Coward, Apr 25th, 2014 @ 5:48am

    The moral of the story!

    It is cheaper to screw over people and just pay the government fine, or settlement, or whatever if you get caught!

    It's like playing at the Casino... except the odds are in YOUR favor. Play a little get a little, play a lot and get A LOT!

     

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

  11.  
    identicon
    Anonymous Coward, Apr 25th, 2014 @ 5:53am

    Re: Re:

    Nowadays to actually become huge a company will need to have very favorable conditions:

    Yea a government backed monopoly guaranteed or at least assisted by regulation. Pick toys, telecom, manufacturing, oil, or Taxes.

    Think about just how hard it is to start your business because of all of government shit you have to wade and jump through! Same reason why Taxes businesses like to lobby government to make them more complicated forcing people to buy their services.

     

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

  12.  
    identicon
    Anonymous Coward, Apr 25th, 2014 @ 8:58am

    Re: Re:

    Yes, the "MAFIAA's radar", that's the real problem. Uh huh.
    /s
    Hahaha, what a moron.

     

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

  13.  
    icon
    known (profile), Apr 26th, 2014 @ 12:14am

    Market capitalization of MS and GOOG should be restricted to 5 times their book value

     

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

  14.  
    icon
    nasch (profile), Apr 27th, 2014 @ 7:47am

    Re: Re:

    Nowadays to actually become huge a company will need to have very favorable conditions:

    Mostly they'll get bought by one of the companies in this story before getting that big.

     

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

  15.  
    identicon
    Technolink, Sep 5th, 2014 @ 9:57am

    About

     

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

  16.  
    icon
    known (profile), Nov 4th, 2014 @ 5:48am

    Impose tax on company revenues, not profits.
    Income tax is imposed on your salary, not savings.
    http://news.yahoo.com/warren-buffett-secretary-talk-taxes-221442297--abc-news.html

     

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

  17.  
    identicon
    SoftChamp, Dec 3rd, 2014 @ 11:49pm

    IT giants

    Recently, Google and Apple have been caught that bypassing UK tax law as well

     

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

  18.  
    identicon
    Amy Croy, Feb 26th, 2015 @ 6:51pm

    Hi, my name is Amy Croy. Thank you for this post about Big Tech Companies Agree To Pay Up Over Hiring Collusion. This is something good and nice. I like the information there.. keep posting! very helpful. http://www.k2ronline.com//a>

     

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


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
Advertisement
Essential Reading
Techdirt Deals
Techdirt Insider Chat
Techdirt Reading List
Advertisement
Recent Stories
Advertisement
Support Techdirt - Get Great Stuff!

Close

Email This

This feature is only available to registered users. Register or sign in to use it.