Sure, it is the optimal arrangement for both companies. It's also illegal because it is patently unfair to the majority of the people involved. I can understan

Sure, it is the optimal arrangement for both companies. It's also illegal because it is patently unfair to the majority of the people involved. I can understand why large company CEOs would want to do this. I can even empathize with them and imagine myself wanting to this were I in their situation. I can also see how this affects employees, though, and why employers shouldn't be allowed to do so. Either way, it would surprise me if people who are otherwise happy at their company would randomly switch to a partner company unless either: a) the salary offered were significantly (>30% or so) higher than at their current company for similar work in similar conditions (meaning they are undervalued or undercompensated at their current company), b) the other company looked much more promising a place to work for or offered a much better position (in terms of autonomy or career advancement). Pretty sure the solution there is just to compensate your employees fairly and make their work conditions on par with the standard for similar workers in the industry (or better, if possible).