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Today Apple, Google, 5 Others Battle “No Poach” Conspiracy Case
- tedsuo 15y agoDid these agreements actually involve turning down employees who applied for jobs, or just an agreement not to cold-call each other?
- smokinn 15y agoNot only did they turn the employees down, they called up their current employer to notify them: http://techcrunch.com/2012/01/19/damning-evidence-emerges-in-google-apple-no-poach-antitrust-lawsuit/ http://techcrunch.com/2012/01/19/damning-evidence-emerges-in...
- swang 15y agoIs that in the casedoc? Nothing in that article mentions what your parent message asked.
- lurker17 15y agoPages 3 and 4 in the PDF. The redactions leave some questions, but the avaialble text directly confirms what smokinn and the Techcrunch article wrote.
- aptwebapps 15y agoNot trying to make light of the seriousness of the allegations, but where's the bit about notifying the current employer? I scanned those pages (and bracketing pages) and didn't see it.
- mattmanser 15y agoPage 5, line 9: The documents also demonstrate that Defendants did not extend an offer to an employee of another Defendant without prior approval from the candidate's current employer, regardless of whether the candidate applied without being solicited first.
- aptwebapps 15y agoThanks, missed that.
- Volpe 15y ago"In addition, Defendants often implemented their express agreements so that they operated as de facto "no-hire" or "no-poach" agreements, whereby Defendants did not recruit an employee of another company, even if that employee affirmatively applied for a position." Seems pretty clear they were turning down applicants who applied.
- bishnu 15y agoFacebook and Google are already in a hiring war and (if reports are to be believed) it's had a dizzying effect on employee compensation [1]. I can't even imagine the war for talent that will occur in Silicon Valley if these agreements drop. Eyes Apple's cash horde http://techcrunch.com/2010/11/11/google-offers-staff-engineer-3-5-million-to-turn-down-facebook-offer/ http://techcrunch.com/2010/11/11/google-offers-staff-enginee...
- mahyarm 15y agoYay? I can't tell if this is a good thing or bad thing in the long run.
- Steko 15y agoHaving a hard time processing how it could be anything but a good thing in the short or long run. Memo to Tim Cook: not sure you'll want to have $100+ billion dollars just chilling in the bank when ex-employees start winning class action suits against you.
- yummyfajitas 15y agoHaving a hard time processing how it could be anything but a good thing in the short or long run. Suppose developers/software companies create a large consumer surplus which they fail to capture. If prices go up, then either quantity supplied will go down (reducing consumer surplus) or companies will focus on efforts where they can capture a larger portion of the gains due to trade. In practical terms, low cost developers might make a free music service economical. If the cost of producing software goes up, the free music service might be uneconomical, and the developers may refocus their efforts on creating DRM (allowing producers to capture a greater portion of the gains due to trade). I'm not asserting that this will happen, merely pointing out that it's not hard to imagine scenarios under which rising developer costs might be bad.
- lawnchair_larry 15y agoAlthough this sounds plausible, the fact that it happened at companies who made boatloads of profits suggests that won't really happen in practice. Greed is irrational like that.
- cluda01 15y agoWhy haven't these matters been pursued criminally? It seems like there are plenty of incriminating e-mails.
- r00fus 15y agoIf you are one of the employees who were affected, wouldn't you rather just settle the civil case - after all it's mostly about money, right? Often the threat of criminal litigation grants more leverage (and is more lucrative) to the aggrieved party than actually bringing suit.
- nknight 15y agoJust because you can recover damages against someone in civil litigation doesn't mean they've committed a crime. What actual crime do you believe has been committed?
- celoyd 15y agoI know little about law, so this might not be what you’re asking, but I can easily find, e.g.: Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice. Here: http://www.justice.gov/atr/public/guidelines/211578.htm http://www.justice.gov/atr/public/guidelines/211578.htm
- nknight 15y agoWhat that "primer" doesn't mention is the vague wording of the antitrust statutes, consequent extensive, confusing, and outright contradictory case law surrounding antitrust, the added complexities when it's mixed with employment law, the difference between the actions of a monopoly and the actions of one or more companies in a highly competitive market, the differences between criminal and civil litigation (such as burden of proof and discovery rules), and the fact that criminal prosecutions for antitrust are quite rare. Also left unexplored are the questions raised by imprisoning individuals for engaging in what would, in the truly free market many Americans claim to want, be perfectly legal conduct. Finally, you still haven't identified what acts you feel are crimes, nor any particular criminal law those acts violate. This is a necessary precondition for criminal prosecution. Prosecuting someone without being able to tell them exactly what crime they're being charged with is not how we do things in a free society.
- EvanMiller 15y agoThe alleged behavior of these companies is appalling to me. Halting an employee's application to another company is an abuse of power and amounts to theft. In my opinion the perpetrators here should do time in prison, just the same as executives who collude to fix commodity prices.
- gcb 15y agoInstead everyone will continue to call the initiator of all that a "genius".
- lawnchair_larry 15y agoThere is a well known story about how "genius" tried to screw the early employees out of stock money, so Woz gave away his shares to them. I guess people never change. Stay classy, Steve.
- gcb 15y agoSo he DID screw them and woz shared his own money?
- publicus 15y ago1 year in jail for everyone who was turned down because of this. 10 Year in jail for every employer notification.
- marshray 15y agoAs a practical matter it means that I, as a Software Engineer, will now have to think long and hard before I submit a resume to one of these HR departments with a history of informing current employers. We can bet that a good many job applicants asked "I don't want to make waves at my current job, but I saw your opening and it looked like such a great fit... So would you please keep my application confidential?" What were they told in response by the hiring HR departments?
- nailer 15y agoTBH I don't see employer unions as different from employee unions. Individual employees/employers will band together for mutual benefit. Then one, for significant personal benefit, will break ranks. The market decides what point that is. I say this as an employee.
- cynoclast 15y agoBut unions exist to counter the grossly disproportionate amount of power that an employer has especially in a depression like this one, where unemployment drives down the cost of labor.
- _delirium 15y agoA large company in effect already is an employer union; whereas you typically negotiate as just one individual (unless you're part of a union), the hiring manager isn't negotiating with you by himself as a human free to use his judgment, but as part of a large organization that's agreed on common terms coordinated across all its hiring managers and departments. Hence the difficulty in negotiating changes to employment agreements: rather than a situation where, e.g. a representative of the company and a representative of the employees get together to negotiate things like non-compete terms, a representative of the company, which has worked out a coordinated strategy, is sitting down with an individual who isn't coordinating with anyone. The union analogue of a group of companies, representing a large sector of an industry, coordinating with each other, would be more like the old-school industry-wide unions, which would present demands to employers as a unified front, and simultaneously go on strike from all the employers in the entire sector if their demands weren't met. That's not allowed anymore; since the Taft-Hartley Act (1947), unions have to individually negotiate in good-faith with their employers, and industry-wide "labor action" is banned.
- NegativeOne 15y agoCould they just have people sign non-competes perhaps? If you want to work there, it's just part of the package. Seems like a fair trade off to me, and everything is above ground.
- michael_miller 15y agoAren't noncompetes non-enforcable in California? (I'm not a lawyer)
- podperson 15y agoI think non-competes must be enforceable in California since I've been slapped with one while working for a CA-based company. That said, I suspect that they're not easily enforceable or frequently enforced. It seems to me that the idea behind this was not fundamentally price-fixing but eliminating the kind of disruption to projects (and inevitable leakage of ideas and technology) you'd get from having people hopping around from company to company. Price fixing may well have figured into it, but I doubt it was the main reason. "Veridian does love its money." Veronica (Better Off Ted)
- gergles 15y agoCorrect, B&PC sect. 16600 http://online.ceb.com/CalCases/C4/44C4t937.htm http://online.ceb.com/CalCases/C4/44C4t937.htm
- lawnchair_larry 15y agoThere is nothing fair about that.
- salem 15y agoI'm not a lawyer, but I believe non-compete clauses in employment contracts are not legal in California. Restrictions against non-complete clauses and against forcing employees to assign all intellectual property to employers (even from personal projects) are part of what makes Silicon Valley what it is.
- michaelochurch 15y ago
- patio11 15y agoBetter than any equity grant or cafeteria, this shows how these companies think of their employees.
- michaelochurch 15y agoSure, and... 1. It means they're scared. Companies wouldn't do this if they were afraid of a 10% bump in salaries. They'd just pay it out. That's small compared to the cost incurred by constant churn, code turning into legacy as people leave the company, etc. To pull that shit, they're worried about something larger. 2. If they were able to pull that "cartel" off (and such arrangements are inherently unstable, because it's always in the individual interest to break) it would be stupid for them and advantageous for startups. If the big companies hold each other back ("crab mentality") then startups would have less competition for talent. In fact, the second contradicts the intentional over-hiring observed at large companies: why do these huge companies pay $150-250k for people to do mind-numbing, unnecessary maintenance work on zombie projects? (I've seen legacy monsters at large companies with 4 full-time maintainers.) Because they don't want these people in startups that might threaten them, 5 to 10 years down the road. Fighting to keep down salaries just seems to increase the likelihood of this happening.
- cynoclast 15y agoExcept when the best of the best want to go from Apple to Google, specifically. And can't. It's not just about salaries, it's about prohibiting professional growth. And I would be very surprised if it didn't keep salaries down.
- ootachi 15y agoI'm so incredibly proud of Apple right now. Their mastery of the employee supply chain is nothing short of genius. Likewise, is "don't be evil" officially dead yet?
- mlok 15y agoAu contraire! The famous line has been generously extended to : "Don't be evil to Apple" ; "Don't be evil to Intel" ; "Don't be evil to Intuit" It's a question of perspective.
- johnx123-up 15y agoI can't believe Apple is the source of evil stuffs.
- jeffem 15y agoThe article doesn't mention an important fact: All of the defendants named in the suit are based in California, a state that does not enforce non-compete agreements (with some minor exceptions). Assuming that these companies agreed not to hire each other's employees, we have a make-shift non-compete agreement, in effect (though not as efficient or encompassing). The biggest issue I have with this case is that these types of antitrust laws exist in the first place. In the absence of fraud, this is a victimless crime. To pay damages implies that the offender took something away from the victim, that they need to be "made whole" again. These employees freely agreed to their compensation packages and received those. They weren't hired elsewhere because those employers freely chose not to after balancing the benefits of recruiting them against the risk of losing current employees. If these companies are really screwing over their employees it seems like a great opportunity for other companies to tell them no thanks to their no-hire agreement and start poaching.
- patio11 15y agoEven a very strict libertarian should agree to the obvious harm here: the compensation package with Google that the employee negotiated in good faith has a covenant which was not disclosed to them and is materially against their interests, namely, that signing on the dotted line forecloses future avenues which you might want to pursue. Not only were employees unaware of that, they would have active reasons to believe it would be impossible, because the laws under which that contract was negotiated say in big bold letters that provisions like that are repugnant to the state's sense of justice and will be voided even if spelled out. There's a credible case for allowing people to sign away future opportunities in return for compensation in the present day, even if their counterparty has excessive leverage in that negotiation. I don't believe it, but I wouldn't think less of you if you do. There's no credible case for the moral righteousness of secret conspiracy against one's own employees' interests which acts to implement a term that you cannot ask for and expressly deny having sought. It's structurally similar to abuse of overtime. I happen to think you should be allowed to trade more than 40 hours a week in return of an amount of money you find motivational, if that floats your boat. In some jurisdictions, that is illegal. Even if you disagree with that policy, if you're negotiating a contract in those jurisdictions, you're going to assume as part of your offer that you're only agreeing to 40 hours a week for the same reason you assume that negotiating a contract will not secretly obligate you to give them your kidney. If they then stick you with more than 40 hours a week, that's an abuse, even if you don't agree with the law: if you had been aware of the work routinely requiring more than 40 hours, you would have priced that in, but instead you priced it on the assumption of 40 hours in the mistaken belief that that was an externally imposed maximum.
- ekianjo 15y agoI guess this practice is clearly illegal if employees are not aware of this when they are hired. This is like a secret clause to their hiring contract, and that restricts their freedom to move to other positions. Even if California does not consider the practice illegal, there is a clear "abuse of power" case here.
- bwarp 15y agoI've turned down positions at two of the aforementioned organisations in favour of much smaller companies (<50 employees). It's worth it. It's better to be a well known and respected employee in a small company than a fungible cog in a corporate machine.