Apple, Google chiefs face grilling on 'no-poaching'

Jan 19, 2013
Apple employees walk towards the Apple Headquarters in Cupertino, California, on October 19, 2011. Apple chief Tim Cook and Google chairman Eric Schmidt are expected to face questioning in a lawsuit accusing Silicon Valley giants of secretly agreeing not to "poach" one another's workers, according to officials and court documents.

Apple chief Tim Cook and Google chairman Eric Schmidt are expected to face questioning in a lawsuit accusing Silicon Valley giants of secretly agreeing not to "poach" one another's workers, according to officials and court documents.

Plaintiffs' attorneys said US Lucy Koh endorsed questioning Cook, Schmidt, as well as Intel head Paul Otellini, after reasoning that high-level executives would know about restrictions on hiring talent.

During a hearing Thursday in her courtroom in the California city of San Jose, Koh referred repeatedly to email evidence that included a request in 2007 by then Apple chief Steve Jobs that stop recruiting Apple workers.

While Cook was not mentioned in the email messages, it was reasonable to expect that his position as chief operating officer included being kept apprised of issues involving employee expenses, the judge said.

Cook took over as Apple chief in 2011 after Jobs stepped down due to a battle with cancer, which claimed his life.

Schmidt was scheduled for deposition on February 21, while Intuit chief and Apple board member Bill Campbell was slated to be deposed the fifth of that month, according to court documents. The date of Cook's deposition has not been set.

The lawsuit filed in 2011 accuses a set of technology companies of stifling careers and earnings prospects of employees by agreeing not to "poach" one another's workers.

Lawyers representing the plaintiffs have asked Koh to grant them class-action status to represent all workers who may have been affected. A jury trial is set to begin in November.

"We're pressing forward to comply with the court schedule and get the case ready for trial in November," said plaintiffs' attorney Brendan Glackin of the Lieff Cabraser law firm in San Francisco.

The civil suit followed the settling of restraint of trade litigation by the due to the "no-poaching" agreement.

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dogbert
2.2 / 5 (17) Jan 19, 2013
How is there cause for legal action?

It is reasonable for companies in similar business in a particular area to agree not to raid each other's work force.

Note that such an agreement:

* Is not binding.
* Does not prevent employees from switching employers.

The only effect of such an agreement would be that neither company would seek to entice workers from the other company. Workers could continue to freely seek employment anywhere including the rival company.

Since employees are not constrained in obtaining other employment, there is no harm to any employee and no cause for legal action.
dav_daddy
2.8 / 5 (13) Jan 19, 2013
What you just described is a perfect example of antitrust. Antitrust is defined as Federal laws forbidding businesses from monopolizing a market or restraining free trade.

In this case they manipulate the market for programmers by not actively seeking out qualified candidates working for their competitors when they needed talent to fill a given position said individual is qualified for.

The harm as you put it, legally referred to as damages in fact were inflicted upon everyone working in that field whether or not they worked at one of the companies in question or not. Everyone in field suffered a monetary loss due artificially depressed wages, unreceived benefits, and other perm's that should have been received as compensation to keep that individual at his present employer or conversely to entice the individual away from his employer to the new post.

There is no need of an overt act in fact many times an inaction is much more damaging.
dogbert
2.3 / 5 (16) Jan 19, 2013
It is not anti-trust.

How are there damages to an employee who is free to seek and accept employment with anyone? If the companies in question were to restrict the opportunities of their staff, then perhaps there would be a cause of action. They did not, however, restrict the workforce in any way.

If in fact they agreed not to raid each other's work force, they constrained only themselves. The workforce was not constrained in any way and was free to seek, gain and accept employment anywhere -- including the rival company.
Jaeherys
3.2 / 5 (6) Jan 19, 2013
I would have to agree with dogbert here. I don't see anything wrong with saying "I'm not going to steal your employees". It's just more aggravation for each company than is required when they can just play nice and not bother each other, as much.

As dogbert said, you can't stop employees from willing leaving and going to another company, whether that be an opposing or unrelated company. Moreover, it doesn't stop them from seeking the best in their field as you assumed that each company already has the best. Also, incentives given to just a few "poached" employees would be in no way universal for all employees of a given position, most notably due to the fact that you would have poached a specialist and not a "generic" programmer or worker.

I just don't see how you can assume such damages from simply not hiring each others employees, especially since there are other companies out there that both can steal employees from.
No one
3.5 / 5 (8) Jan 19, 2013
What you guys aren't understanding is the deflation of price wages payed. It's like you didn't read anything the guy above me said. I'm not a business major, but this is really common sense.

Let me explain it like you're five.

I have 1 employee. I pay him $9.00 per hour.
Joe has 2 employees and is actively seeking a 3rd. He pays $9.00 per hour.
Joe and me and buddies from back in school and agree to not "pouch" each others talents.

Fast forward 15 years of business. My company now has about a million employees, making $10 per hour.
Joe has 2 million at $10 per hour.
How did we both get away with paying such low wages? Simple. We didn't offer anything better than the other guy.
When employee Tom came into Joe's store 15 years ago and said "No thanks $9.00 is too low, I will look elsewhere." Joe laughed and said "Good luck buddy, the other company doesn't offer anything better and you're replaceable in this market for sure!" Tom cried because he couldnt say "[My Co.] pays more"
gopher65
4.4 / 5 (7) Jan 19, 2013
dogbert: by working together they're reducing competition for skilled labour, which effectively reduces wages, which in turn decreases each company's payroll costs.

To rephrase Jobs' email into non-corporate, internet friendly speech, he wrote an email saying "hey Google, let's collaborate to decrease our employee's wage potential, thereby saving us money at the expense of our employees!"
No one
2.3 / 5 (3) Jan 19, 2013
Think of it in terms of "Price Matching" All these companies love to steal business from each other by "price matching" when you print a receipt, because realistically they know it's 1 more sale to them, and the "lost profit" from lowering the price is vastly overshadowed by the loss they inflict on their rival.

In this context, these companies have basically said "Well, let's just not price match each other, never offer any incentives you aren't and just replace workers like cogs in a machine if they don't like it tough." That way, you can't come in and say "Well, GOOGLE CO offered me $80,000, what can you offer me?" Apple would simply say "Piss off. We don't even need you. Try $80,000 flat. Go away."

That way neither has to add benefits like dental because those perks don't come with the other side of the fence either. It's anti-trust because it effects every market price for every wage of anyone in the industry. It takes the competitive nature of market wages out of the equation
dogbert
2.4 / 5 (14) Jan 19, 2013
No one & gopher65,

The companies did not agree to suppress wages, and they could not have succeeded even if they had wanted to do that.

Employees and prospective employees are free to seek employment anywhere and are free to negotiate salary and benefits.

If in your fiction, Apple and Google were the only employers around and if in your fiction they had agreed to suppress wages, they your argument would be meaningful.

But, they did not agree to suppress wages and they were never the only employers around.

If they had suppressed wages, they would have sent all the talent to Yahoo, Microsoft, etc. and would have harmed themselves.

But of course, your arguments are based on fiction.
No one
3 / 5 (6) Jan 19, 2013
Okay, you're right. I admit it. We both made it all up just to fight with people like you on the internet. Subsequently, the journalist made it up just to sell ad revenue, and the courts made up the out of thin air just for fun because "Hey nothing illegal is going on, it's fictional, it'll be fun."

All of it is just a ruse and we're both compulsive delusional lairs.
Seems legit.
CapitalismPrevails
2.4 / 5 (13) Jan 19, 2013
No-one and gopher65, all a mutual poaching agreement between Google and Apple would do is draw talent to smaller and more ambitious companies. What this lawsuit implies is if the companies are actually convicted illegal acts, they will be sued and money taken out of their coffers. Do you think their employees wages are gonna have better chance rising after that happens? NOPE. Most likely they will cut costs to increase their safety margins which means they probably won't hire as many people if any at all for a period of time or lay people off. It depends on how much they have to pay if convicted. If anything is for sure, the lawyers will benefit more than anyone else as more money is being allocated to them and not towards the business of making actual goods and services.
No one
3 / 5 (2) Jan 19, 2013
@CapitalismPrevails

Totally agreed that the lawyers will benefit more than anyone else, and that this case is rather arbitrary in nature. Even if they win and implement stringent guide lines for the future, nothing will come of it. It's like trying to sue the police. This situation holistically perfectly exemplifies how far some companies will go to subvert normal market practices, and in fact bend them so heavily that they themselves set the new norms(which is the principle anti-trust was based on to start with).

However, and unfortunately, there isn't another forum to bring these issues under scrutiny besides yet another lawsuit.
-sigh-
dogbert
2.2 / 5 (13) Jan 19, 2013
No one & dav daddy,

You both have used the term anti-trust as if it somehow applies.

Anti-trust laws were enacted to protect the public from companies effectively forming a monopoly through price fixing, etc. It has nothing at all to do with employees.

If all of the tech companies had banded together to fix wages and benefits, then there would be harm to employees and prospective employees. But no such situation exists now or ever existed.

There is no cause of action in court. Employees were never harmed and never prevented from working anywhere for any wages and benefits.

The lawsuit is B.S. Lawyers are always filing B.S. lawsuits and judges, because they are lawyers too, are prone to listen to B.S. lawsuits.
omatwankr
1.4 / 5 (10) Jan 19, 2013
What some seem to have missed in their zeal is
"The civil suit followed the settling of restraint of trade litigation by the US Justice Department due to the "no-poaching" agreement."

"Google, Apple, Adobe, Intel, Intuit, and Pixar—have agreed to end agreements with each other under which they would not try to recruit each others' top employees"

http://www.digita...ing-ban/
dogbert
2.2 / 5 (10) Jan 19, 2013
omatwankr,

Basing a BS civil suit on BS arm twisting by the justice department does not transform the civil suit into something savory.

Note that the companies just agreed to stop agreeing to be nice to each other. They did not agree to raid reach other's companies for employees. That is, they agreed to change nothing.
Jotaf
3 / 5 (2) Jan 19, 2013
So: Companies can poach top executives from each other until they're valued in the millions. But if the same starts happening with top engineers, oh no we better put some measures in place. Arrogant and elitist.
Infinum
2 / 5 (4) Jan 20, 2013
A private company can come into an agreement with anyone on any terms it likes - even to its long term detriment in terms of number/quality of skillful workforce. This is a basic free market principle. Than again, US of A is getting less free market oriented every year.

The hidden consequence of an agreement to lower wages by not competing is the outflow of skilled employees to other companies/countries. Free market already has a remedy for such practices - it is called lower competitiveness and hence lower efficiency of the business in the long run.

Than again, if an economic calculation favors lower wages over decreased productivity/creativity etc. than a company has to be able to take this strategy and risk adverse consequences to its competitiveness in the future.
dogbert
2.6 / 5 (10) Jan 20, 2013
The hidden consequence of an agreement to lower wages by not competing is the outflow of skilled employees to other companies/countries.


But there was not agreement to lower wages nor any non-compete agreement. The companies simply agreed not to raid each other's work force. They continue to hire from each other's work force. They just don't seek to entice workers away from each other.

This does not suppress wages and is not anti-competitive. Each company recognizes that raiding each other is not good business practice.
gopher65
5 / 5 (2) Jan 20, 2013
The hidden consequence of an agreement to lower wages by not competing is the outflow of skilled employees to other companies/countries. Free market already has a remedy for such practices - it is called lower competitiveness and hence lower efficiency of the business in the long run.

I agree, all else being equal. However, all else is not equal. Until a future time comes when we have a moderate level of income equality, basic currency equivalence (China currency doesn't float), and universal trade, human rights, and fraud laws across all the nations of humanity, each country (or trading block) has to be looked at as its own island.

Within each island events can transpire as you say. But in between islands "fair trade" of workers, IP, and physical goods doesn't really exist, as such. There is currently always an imbalance. Because of this any actions by individual corporations that weaken the trading block as a whole need to be treated as suspect, like they were in this case.
Jaeherys
3 / 5 (2) Jan 20, 2013
@no_one

Thank you for showing me the error of my ways. Explaining this "agreement" like I was five helped :P. I am in biology for a reason!
jmlvu
3 / 5 (4) Jan 21, 2013
Let's recap this. The ten biggest high tech companies in the country got together to surpress competition and in doing so surpress wages. (They did this for decades in the case of Intel and Microsoft) Costing American workers billions of dollars and people are ok with that. Forget thier baseless arguments, let's face it some people just don't care about others.
dogbert
2.5 / 5 (11) Jan 21, 2013
Lets recap this again.

Several tech companies agreed not to raid each other's work force. They continued to hire each others employees and did not in any way prevent their employees or prospective employees from going to work anywhere and from negotiating pay and benefits.

The federal government took issue with this and the companies agreed that they would not agree to be nice to each other, since agreeing was easier than fighting.

No on was harmed or would ever have been harmed, but some people hate businesses so much that they continue to claim that the companies suppressed wages and benefits by somehow magically suppressing competition.

These companies continue to have very good wages and benefits and jobs with them are highly sought.
TheGhostofOtto1923
1.4 / 5 (11) Jan 29, 2013
Let me explain it like you're five.
Perhaps you should ask a 5 year old what the word collusion means.
In this context, these companies have basically said "Well, let's just not price match each other, never offer any incentives you aren't and just replace workers like cogs in a machine if they don't like it tough.
Perhaps you should also ask this 5 year old what price fixing is, and why there are laws against these activities.
VendicarE
2.6 / 5 (5) Jan 29, 2013
Isn't it interesting how Corporatists like DogberTard demand a free market when it comes to Corporate regulation when it comes to health and safety standards, products standards, etc, all things that lower corporate costs, but magically change their position 180' when it comes to a free market in the workforce, which in this instance increases corporate costs.

DogberTard is simply a Neo-Fascist. He will do or say anything that increases Corporate Profits, even if it means the destruction of his own society, or his own nation.

The rise or Neo-Fascism I.E. Randism/Libertarianism in America is why America is a failure.
VendicarE
2.6 / 5 (5) Jan 29, 2013
What are you jabbering about, Fool.

Of course you can.

"you can't stop employees from willing leaving and going to another company" - Jaeh

It's done all the time through non-competition agreements signed at the time of employment.

It is standard practice in the tech industry.

How old are you? 8?
full_disclosure
2 / 5 (8) Jan 29, 2013
The 'Coward Herr Vendicar' has childishly changed his personal login profile, slightly, to avoid people following his name back through past comments..... Anyone interested in cowardly death threats towards posters in the past comments section, follow them through the link below. http://phys.org/p...ndicarD/

Read more at: http://phys.org/n...html#jCp
VendicarE
2.3 / 5 (6) Jan 29, 2013
Full_Diaper needs a shave. If he won't do it for himself, the national razor will do it for him.

"The 'Coward Herr Vendicar'" - Full_Diaper

full_disclosure
1.6 / 5 (7) Jan 29, 2013
Link fixed....just check out the 'Green Murder Porn' this guy wanks to....

http://phys.org/p...ndicarD/
VendicarE
2 / 5 (4) Jan 29, 2013
Mmmmmmmmm Green Murder Pornnnnn.....

Full_Diaper needs to get off the drugs and get on the right side of history.

Failure to do so will bring the Red Queen to doors of many TeaBaggers and other traitors to nature and mankind.

Have your Freedom lists ready people. She is on her way....