Apple, Google and Others Set to Face Trial Over Anti-Poaching Agreements

[gnasher729]

Wages they think they deserve. There's always two sides to a story.

Let's then change things so that management wages are decided by the people working under them. That would create _huge_ savings for companies.

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This is most interesting, because it flies completely in the face of my experience. I work in the UK, and am head of department at a private school. There have been many times when I might wish to have bypassed the normal recruitment process, because there was someone I knew who was perfect for the job. I've always been given to understand though that in the UK at least, headhunting of this sort, poaching talent, was illegal (although I can't easily find evidence of this!). Indeed, even contacting someone and inviting them to apply through the official channels is frowned upon (as it sets up potentially false expectations).

A very quick Google would suggest that the sort of poaching we're talking about here is certainly illegal in some parts of the States (http://www.linkedin.com/groups/Job-Poaching-is-unethical-illegal-156213.S.238357511?_mSplash=1) so it's odd that it's being encouraged to this extent on a more federal level.

You are talking about hiring one person and not allowing anyone else a chance to get the job. Not good. This here is about hiring from one set of persons and not allowing anyone in another set (employees of certain other companies) a chance to get the job. Also not good. It's about fairness towards all possible employees. Whether you exclude anyone except your favorite candidate, or just anyone from school B, C and D when you work at A, that's about the same thing.

 

[RobertMartens]

That looked like an attempt at sarcasm. What your actual point is, I don't know.

If you believe only fanbois should be posting on Macrumors, that's your opinion, and you're entitled to it. Of course, everyone has opinions, just like everyone has a certain posterior-located body part.

Firstly, he means since you are so cynical about Apple, the evil corporation, that perhaps you don't enjoy yourself reading a site like this.

Secondly, playing the 'fanbois' card especially the french version shows your contempt for the members of this site, which is arguably a fan site in nature.

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Any company--including Apple--that engages in practices that assume an employee is somehow their property or assumes it has any right to influence a person's life outside of work, including working for the competition, deserves to have their a** handed to them in court.

It is a dumb, borderline evil idea. Apple was dumb to have been a party to it.

Every name brand company in Silicon Valley was party to it. Don't they have lawyers to help them follow the laws?

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Fanbois think the judge is like them,...

So is this the 'official' spelling of fanboy. It somehow make fanboys look wimpy.

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Let me start this off by saying that I'm a free-market capitalist type Republican, and a bit of an Apple fanboy.

Great if you are a fanboy can you tell me what that is. I never met a real fanboy. Only ever heard people be called them.

 

[Poisednoise]

You are talking about hiring one person and not allowing anyone else a chance to get the job. Not good. This here is about hiring from one set of persons and not allowing anyone in another set (employees of certain other companies) a chance to get the job. Also not good. It's about fairness towards all possible employees. Whether you exclude anyone except your favorite candidate, or just anyone from school B, C and D when you work at A, that's about the same thing.

Ahh I'm sorry I've misunderstood. I thought this was simply about active poaching. If the agreement was in fact that should an employee, for instance, of Google, apply for an advertised job with Apple, then they would not be considered for the position because they were already an employee of Google, then that's clearly quite wrong.

 

[kdarling]

What law prevents this?

The Sherman Anti-Trust Act, Section 1:

"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. "

According to the DOJ in their original investigation, the anti-poaching agreement limited employee ability to obtain higher compensation, improved benefits and working conditions, and the ability to readily change jobs within their chosen fields. This is what is known as a "per se" violation of Section 1, because it blatantly restrains free trade.

The agreements also lacked any pro-competitive justifications that would override the above blatancy. This is what is known as a "rule of reason" determination, and can be challenged in court.

There might also be state laws prohibiting such collusion to hold down wages.

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One extra problem for the companies involved is that some went beyond just prohibiting cold calling. Intuit asked everyone else to prohibit hiring at all from each other. Steve Jobs alledgedly threatened Palm with patent lawsuits.

Palm refused to get involved in the pact, citing its possible illegality.

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In 2010, Adobe, Apple, Google, Intel, Intuit and Pixar agreed to a settlement with the DOJ, but without admitting guilt. They did this in an attempt to avoid an anti-trust trial, which, if they were found guilty, would open the floodgates to easily won class action suits.

Now they have to face trial anyway, with Koh allowing a class action (which was not tight enough when she gave it back to the employees' lawyers in April) to go ahead.

Things could get interesting. For example, Apple claims that Tim Cook had no knowledge of the agreement since he was "only" COO at the time. Koh didn't find it believable that a COO wouldn't know about hiring practices.

And Google's Eric Schmidt was so eager to please Jobs at the time, he threatened his own recruiters with dismissal if they didn't do as Jobs asked.

 

[Lennholm]

Seeing as how the agreement doesn't prevent employees to pursue a career at one of the other companies by themselves I don't see how this is wrong or even unfair to the employees.

 

[kdarling]

Seeing as how the agreement doesn't prevent employees to pursue a career at one of the other companies by themselves I don't see how this is wrong or even unfair to the employees.

Most employees in fields like this improve their position not because they took the time and risk of looking elsewhere, but because someone at another company knows of and recommends them... or because there are so few to choose from. Examples:

• If a company is working on a really secret project (iPhone, smartwatch, etc) then they cannot advertise that project. The only way to get the particular experts they need, is to cold call them. Heck, this goes for even non-secret projects. People don't have time to find out about every opportunity on their own.
  
  
• If a company needs, say an expert in ARM CPU chip design with ten years' experience, or a SVP with massive experience in turning around retail sales, the choices are limited. They have to cold call them. For example, Jobs called on Sculley to leave Pepsi, not the other way around. When that exec from Burberry just recently joined Apple, it was no doubt because Apple contacted her first.

 

[gnasher729]

Ahh I'm sorry I've misunderstood. I thought this was simply about active poaching. If the agreement was in fact that should an employee, for instance, of Google, apply for an advertised job with Apple, then they would not be considered for the position because they were already an employee of Google, then that's clearly quite wrong.

No, this was about active poaching. However, the situation that you described is one where there are plenty of school teachers around that might want a job, and any favoritism by another employee in a relevant position is bad. If there is a job opening, and you tell your sister's son or your best friend and so on about it and hire them, then you are actually hurting both all the other potential employees _and_ your employer.

This case with Apple, Google and others is not about poaching in general - it was about poaching within that small set of companies. If their agreement was as it is alleged, Google was free to poach from any company, except from Apple (and some others). So if let's say Facebook had exactly the right employee for a job position that Google wanted to fill, they would call that employee and offer him more than he is making now. (I'm assuming Facebook was not in it, which might be wrong). But if Apple had exactly the right employee for that job, they wouldn't call him. So the Facebook employee could either take that job, or tell his employer about the good offer and might get a raise. The Apple employee wouldn't.

 

[NakedPaulToast]

.... with the companies agreeing not to form no-solicitation agreements for five years.

I don't understand this part of the 2010 settlement.

If no-solicitation agreements are illegal, won't they still be illegal in five years? The five year caveat just doesn't make sense to me.

 

[D.T.]

So the Facebook employee could either take that job, or tell his employer about the good offer and might get a raise.

Yeah, that’s probably not going to happen and if it does, that employee will have to keep looking over their shoulder

 

[Poisednoise]

No, this was about active poaching.....

Ok, thanks for clarifying, and sorry for not understanding the Bloomberg article fully - it very much seemed to assume that we already knew what it was on about, which made it tricky if you didn't!

I have to say, it still seems to me that the sort of hiring practices that are being described are unethical, and certainly should be illegal across the board, although I take the point that was made by kdarling that it's quite difficult to advertise for a secret project, and equally difficult as a candidate to sell yourself effectively if you've been working on projects about which you're not allowed to speak freely (although in that case, the prospective employer is unlikely to know what great work you're doing anyway, and so is not likely to approach you one presumes). Nevertheless, my instinct is still that it's wrong full stop/period [depending on which side of the Atlantic you're on].

That said, I agree that the most important thing is that there's equal treatment in all companies - if some are allowed to poach, or you can poach from certain companies, then clearly you must be able to from all. On that basis I suppose this agreement wasn't right.

 

[Rogifan]

I guess this is one of those times where we can't say "Steve wouldn't have..."

 

[waveboreale]

that judge kicks ass !

 

[OLDCODGER]

Let's then change things so that management wages are decided by the people working under them. That would create _huge_ savings for companies.
.

You forget, companies are formed to make money for the owners - as much money as they can muster.

Product, employees, and machinery are merely the means by which this is often achieved.

All else is mere marketing.

 

[The Monkey]

Let me start this off by saying that I'm a free-market capitalist type Republican, and a bit of an Apple fanboy. That being said, what Apple and other tech companies did is absolutely wrong. It is collusion, plain and simple. The end result is lower wages for employees, due to less competition for labor. I can understand why Steve Jobs wanted to do it, but he went about it the wrong way. Instead, he could have offered conditional compensation (like stock options every year of employment) or something of that nature.

Whenever there's a choice presented like this, the law should always favor an economic system that is more dynamic and more competitive. Agreements not to poach employees is the opposite of competitive, and keeping employees more locked in to long-term jobs is less conducive to a dynamic economy.

Let's think about the cost vs benefit here. Cost: employers have slightly more frequent employee turnover, and must pay employees more in order to retain them. Benefit: greater employee pay, more flexible career opportunities for employees, more "cross-pollination" of employees among Silicon Valley firms, and more of an incentive for people to go into tech careers. I believe the net benefits vastly outweigh the costs, and thus this is a good regulation.

This is the only reasonable analysis of the practice at issue. Those of you defending the practice, especially those of you who are corporate apologists, really need to stop and think about why it is you take that position. You are, simply put, being used.

 

[OLDCODGER]

Those of you defending the practice, especially those of you who are corporate apologists, really need to stop and think about why it is you take that position. You are, simply put, being used.

Unless one is on the other side of the fence, of course.

 

[The Monkey]

Unless one is on the other side of the fence, of course.

Yes, true. If you are a CEO of one of the affected corporations, a MAJOR shareholder, or a politician beholden to any of the above (i.e., almost no one on this board) then you probably favor the anti-competitive anti-poaching agreements because they legitimately further your interests, at least in the short term (long term is debatable even for them).

 

[OLDCODGER]

Yes, true. If you are a CEO of one of the affected corporations, a MAJOR shareholder, or a politician beholden to any of the above (i.e., almost no one on this board) then you probably favor the anti-competitive anti-poaching agreements because they legitimately further your interests, at least in the short term (long term is debatable even for them).

I'm retired now, but my work philosophy was to make as much money as I could - without being thrown into jail. It has served me well. My only regret is that I did not do more to help bring down the unions. However, all may be well for future wealth accumulators - the times, they are achanging.

 

[winston1236]

This is good, it was a blatant attempt at further wage suppression.

 

[b0fh]

Stockholm syndrome?

Thats why Microsoft has been voted the number one place to work numerous times.

http://business.time.com/2011/11/01/the-best-place-in-the-world-to-work/

http://www.bonkersworld.net/organizational-charts/
http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer

Stack Ranking has to be the most demotivational way to grade your employees. If you have a team of superstars, you still have to grade someone as "number last one" and if that person doesn't "improve", he or she will be fired.

That's just idiotic.

 

[The Monkey]

I'm retired now, but my work philosophy was to make as much money as I could - without being thrown into jail. It has served me well. My only regret is that I did not do more to help bring down the unions. However, all may be well for future wealth accumulators - the times, they are achanging.

I have a similar philosophy. Unfortunately, I didn't start out that way and chose a career path that will not let me accumulate the kind of wealth I want. I don't begrudge those who are wealthy, and I do not begrudge those who come up with policies such as those discussed in this thread if they are the beneficiaries of them. But what astounds me Joe Public's continued genuine belief that his interests are aligned with the corporation that exploits him. It's mystifying and a truly great Jedi mind trick.

 

[Dave.UK]

http://www.bonkersworld.net/organizational-charts/
http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer

Stack Ranking has to be the most demotivational way to grade your employees. If you have a team of superstars, you still have to grade someone as "number last one" and if that person doesn't "improve", he or she will be fired.

That's just idiotic.

And thats relevant to Microsoft being the number one place to work how?

 

[gnasher729]

I'm retired now, but my work philosophy was to make as much money as I could - without being thrown into jail. It has served me well. My only regret is that I did not do more to help bring down the unions. However, all may be well for future wealth accumulators - the times, they are achanging.

I feel sad for you. You are a very poor man.

 

[Poisonivy326]

I'm retired now, but my work philosophy was to make as much money as I could - without being thrown into jail. It has served me well. My only regret is that I did not do more to help bring down the unions. However, all may be well for future wealth accumulators - the times, they are achanging.

Anyone who has to follow up a list of their accomplishments with the disclaimer "without being thrown into jail" probably did a **** ton to deserve getting thrown into jail.

 

[The Monkey]

I feel sad for you. You are a very poor man.

Anyone who has to follow up a list of their accomplishments with the disclaimer "without being thrown into jail" probably did a **** ton to deserve getting thrown into jail.

So what do you two think of the anti-poaching agreements?

 

[OLDCODGER]

Anyone who has to follow up a list of their accomplishments with the disclaimer "without being thrown into jail" probably did a **** ton to deserve getting thrown into jail.

No, it actually means that I did not cross the line of the kind of law that could get me thrown in jail. There are ethical limits, and I respected them.

Worrying about other people's ability to make money, however, was not one of them.