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DOJ Investigates Google, Apple, and Others For 'No Poaching' Agreement
CSHARP123 writes "The Department of Justice launched an investigation into the 'No Poaching' agreement between Apple and Google in 2010, but details of the case were only made public for the first time yesterday. TechCrunch was the first to sift through the documents, and has uncovered some ostensibly incriminating evidence against not only Google and Apple, but Pixar, Lucasfilm, Adobe, Intel, and Intuit, as well. According to the filings from the U.S. District Court for the Northern District of California in San Jose, these companies did indeed enter 'no poach' agreements with each other, and agreed to refrain from soliciting employees. The documents also indicate they collectively sought to limit their employees' power to negotiate for higher salaries."
As my wise Republican candidates have pointed out, this kind of thing is proof that the free market--left to itself and without any government oversight, regulation, or interference--will make things better for all of us. The DoJ needs to get off the backs of these job-creating companies and let them give their employees the freedom that Jesus and Capitalism can only provide when we have a free market with no regulation or oversight. Anything less is socialism.
SJW: Someone who has run out of real oppression, and has to fake it.
we need that money to fuel the lawyers for all our patent violation lawsuits against each other.
I'm sure "SlashdotMedia" will improve on all the wonders that Dice Holdings blessed us all with
Union actions are public knowledge. Whatever benefits the union gains are slightly counterbalanced by businesses' responses and negative reactions from the public and politicians. Corporate agreements are not public. Someone looking to be hired by one of these companies cannot use it to their advantage in the decision-making process, and they avoid any public reaction.
If they want to make these "corporate unions" public they're welcome to have them, but the clandestine nature of the agreements makes it obvious that they already know that there'd be hell to pay.
No kidding!!! What do you say at this point?
You're implying that it's better to have the potential to gain $50,000 million with high risk than $5,000 million with low risk.
The greatest fallacy of capitalist philosophers is to forget that the system is run by people, and people only live for a small amount of time and with relatively modest material needs.
The greatest success of capitalist practitioners is to take advantage of this and tell the average man that competition is healthy while succeeding at the top through cooperation.
Like Abbott said, white men like to play the game of divide and rule. It has been the crowning principle of the British empire and all its ideological descendants.
Personally, I'm inclined to agree.
The no-poach agreements reduce the stress on a company that has talent but, in the short term, isn't as desirable as somewhere else. In my opinion, the agreements shouldn't prevent Apple from hiring a Google employee (or even offering a great deal), but rather just from advertising jobs specifically to them because they're at Google. In the long term, employees who are dissatisfied enough will leave eventually. They know the jobs are out there.
You do not have a moral or legal right to do absolutely anything you want.
It's because nobody in their right mind would go after someone from Microsoft, and everyone who does have talent knows that going to work for Microsoft is a career-ender. It kind of makes them irrelevant to the issue.
Get a load of that coincidence. it 'coincides' just 2 days after sopa protests, and involves almost all major technology companies that have major stakes on internet. Just like how the megaupload bust 'coincided' a day after sopa protests, yesterday.
Read radical news here
In general, employers, especially ones where unions are present, are a relatively small number of groups that wield a lot of organized power.
Conversely, unions, ostensibly*, represent the employees and potential employees, a group which usually has more total power than the employers, but lacks the organization to wield it effectively, often wielding it only to the extant that the weakest and most desperate individuals in the group are willing to wield it. Why? because the employers will take those first, as they are cheaper, and this makes those that were trying to get fair compensation, instead of just any compensation become the weaker and desperate*. Unions can balance the ability to wield power so that the employers are move likely to provide fair compensation. Large employers typically don't need this assistance.
* There are quite a few unions I've seen that seem to only absorb chunks their member's paychecks without actually providing any benefit in bargaining with the employer, effectively acting as a lamprey on capitalism. These days I'm not sure if this is the exception or the rule... At one time, it was the exception.
** there are exceptions to this rule, however, as this is the most profitable way to run a business (get the cheapest labor that will give you the desired quality), this tends to be the trend, and companies not following it will be less profitable, and therefore grow less than companies that do.
Self proclaimed typo king, and inventor of the bear destroying coffee table (patent not pending).
More likely no one trusts them to be a member of a cartel and not stab them in the back.
a handful of selfish greedy people are no match for millions of selfish, greedy people -u4ya
Google went from "Do No Evil" to "Amoral Megacorp" in record time. It's the age we live in (everything happens faster).
The NSA: The only part of the US government that actually listens.
Union actions are public knowledge.
Absolutely. They're completely transparent and above-board. Not just to their membership, but the general public.
So what? Cartels will naturally fall apart given no government interference. It is in their best interests to cheat on this agreement. Its just like the prisoner's dilemma, while it might be best for all of them to cooperate, they won't because they want an advantage over their competitors. Cartels never last so long as there is a lack of government involvement.
[Citation Needed]
Ludwig Von Mises and his ilk (which while they had good ideas they don't really apply to real world human behaviors).
I'm sure "SlashdotMedia" will improve on all the wonders that Dice Holdings blessed us all with
Yeah, and while the people are waiting for this eventual collapse, what then? Oh, right, they're just screwed. What a great solution. Saying to let the market decide ignores the fact that these things take time and people get screwed during that time. Yeah, maybe it will EVENTUALLY sort itself out, but in the mean time, we have to put up with something like this and that is bullshit. Laissez-faire was proven pretty early on to be a completely useless government policy and yet people still trot that out like it's some new insight; it is not unlike like trickle down economics. It doesn't work, we know it doesn't work, and yet people still bring it up as a valid argument.
"Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
It's funny that this drops the same day as the Fortune list of best companies to work for. I see many name here at the top of that list. Not quite sure what to think... I dislike secret corporate agreements, especially to keep salaries down, but I had a fellowship at Intel and found it to be a really good environment, and my colleagues thought so too. At the same time one couldn't help but to notice the incredible number of green badges (contractors) used while Intel posts record quarters. I suppose when you are as big as Intel, it's nearly impossible to be all good, or all evil.
how long has the western banking cartel endured? (at least four centuries). How about the deBeers diamond cartel? what on earth makes you make such a bullshit assertion?
Most B2B contracts I've seen, particularly ones involving services, have a "non-solicit" agreement where each party agrees not to hire the other's employees away for a set period of time. It's not uncommon and I'd be willing to wager that all of these companies have done business with one another in some way, shape or form. Entering into this kind of an agreement without legitimate business that might expose the parties to one another's valuable human resources might be a problem. The part about collectively limiting their employees rights to bargain for raises...well...I don't see how that's possible. My philosophy (and practice) has always been to ask for what you want...if you don't get it, move on...if you DO get what you ask for...then turn right around and decide you want something else...I'd rather have you be the competition's problem. :-)
I used to fear clowns...but I'm discovering that chimps are far, far, worse.
news for you, that's what cartels do, they put government in their pocket! it's called corruption. all cartels involve government
There was a funny case involving Dow Chemicals and a German Chemical Cartel.
From http://en.wikipedia.org/wiki/Predatory_pricing
Critics of laws against predatory pricing may support their case empirically by arguing that there has been no instance where such a practice has actually led to a monopoly. Conversely, they argue that there is much evidence that predatory pricing has failed miserably. For example, Herbert Dow not only found a cheaper way to produce bromine but also defeated a predatory pricing attempt by the government-supported German cartel Bromkonvention, who objected to his selling in Germany at a lower price. Bromkonvention retaliated by flooding the US market with below-cost bromine, at an even lower price than Dow's. But Dow simply instructed his agents to buy up at the very low price, then sell it back in Germany at a profit but still lower than Bromkonvention's price. In the end, the cartel could not keep up selling below cost, and had to give in. This is used as evidence that the free market is a better way to stop predatory pricing than regulations such as anti-trust laws.
I love Jesus, except for his foreign policy.
No soliciting is one thing. And I don't really have a problem with that either.
But try working in an area where employers have a 'do not hire' policy. You quit one job and everyone else tells you they won't hire ex-employees of certain companies for a period of time. You might as well step out of the bushes and surrender when you hear the slave hunters' dogs approach.
Have gnu, will travel.
Hang on. Isn't this essentially trying to operate a tech-labour market cartel?
in fact, let me put that in stronger terms, we in the United States are ruled by cartels. In 2012 we will go to the polls and decide who will continue the cartels' agenda
...years ago. So if poaching is illegal whats wrong with agreeing not to poach>?
Or maybe because they don't have a large employee base in Silicon Valley?
Certainly MS will pay to relocate desirable employees, but moving to Seattle means that the poaching back and forth of ordinary employees is less likely.
http://en.wikipedia.org/wiki/Prisoner's_dilemma
A cartel is simply a prisoner's dilemma, something that has been studied for years. While it benefits all companies in the cartel to stay with the cartel, if one person breaks the cartel, the rest of the companies are in worse off shape (investors will go for the company that broke the cartel and has higher profits). So the diagram goes something like this
Lets say this is between Google and Apple.
Case 1, Google and Apple both agree to the cartel, both are better off.
Case 2, Google breaks the cartel Apple stays, Google is better off, Apple is much worse off.
Case 3, Apple breaks the cartel, Google stays, Apple is better off, Google is much worse off
Case 4. Both break the cartel. Both are better off than if only 1 broke the cartel, but both are worse off than if they would have stayed with the cartel.
Because neither company knows what the other is going to do, the natural tendency is for the cartel to be broken up.
Taxation is legalized theft, no more, no less.
So Google offered me less in salary than they might have without this agreement. I wonder if I could sue them for lost income.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
It's not a prisoner's dilemma as the parties are in regular contact and in the prisoner's dilemma a large part of it is that there is no communication between the parties. A cartel is always going to be better for the individuals than going alone, that's why they form cartels and why antitrust regulations seek to prevent it. OPEC itself has had no problems existing for decades.
Only acceptable when done by employers, not employees. Got it.
Odd that you should phrase it that way. One of my G+ friends just posted this little gem. http://thecnnfreedomproject.blogs.cnn.com/2012/01/19/child-slavery-and-chocolate-all-too-easy-to-find/
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Don't call his religion bullshit. That's so insensitive.
Google went from "Do No Evil" to "Amoral Megacorp" in record time. It's the age we live in (everything happens faster).
If Google is a "do-no-evil" company and other are not, logically, to allow Google people to go to work for "do-evil" companies instead would be evil in itself. Therefore, they must not allow it.
Ezekiel 23:20
That's a bald assertion there. By the very nature of a union, it must be public in order to gain members and perform actions like strikes. It's impossible to do that privately. Moreover it's against the (U.S) law to make a secret union. Now, from what reasoning could you possibly conclude they aren't public?
Bald assertions like this make you look bad, and harm your argument.
From what I hear, this whole cozy arrangement has been disrupted by Facebook, which started poaching techies from all of the above with higher pay...
Yes, that is also a perfectly reasonable solution. It's really easy to just real quick quit and start a new company. You make this sound like you can set it up in a fucking weekend. Are you serious? It turns out that taking your ball and going home is not always a particularly great solution. Not everyone has the time, ambition, or knowledge to start their own company. The fact that you can't start your own company does not mean that the people you are working for should be able to screw you over. That's absurd.
"Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
There are two unusual reasons that worked out in Dow's favor: 1) He was in a different country where he could start his company without interference from the German cartel; and 2) The German government neglected the important step of adding tariffs to his imported bromine.
The reason anti-trust laws are so important is because these circumstances are rare. If Dow had lived in Germany at the time, they would have taken an immediate interest in his start-up and likely either stolen his process or squashed his company before he became a threat. This is precisely what is happening in the U.S. with the entertainment industry: government-supported cartels are forcing all the (media distribution) innovation overseas, and now they want SOPA to quash even that.
The reason why diamonds are so expensive isn't the result of De Beers, but rather the governments of the western world refusing to sell diamonds unless they are certified as "conflict free"
You're joking, right? The cost of compliance with the Kimberley Process is insignificant compared to the cost of the diamonds involved. Here is what the regulation requires: each shipment of diamonds must be sealed and accompanied by a Kimberley Process Certificate. That's it. The charge for package sealing and certificate is low - e.g. UAE charges about $90 US. That is $90 for a single certificate that accompanies a package of diamonds worth hundreds of thousands (or even millions) of US dollars. It's insignificant.
Just like with unions, problems aren't a reason to reject the notion entirely. Regulate them, instead.
I'd like to see enforced regulation of no-poach agreements. Sure, you can prevent others from hiring people who quit your workplace - but you'll need to keep paying them after they leave, regardless of why they left. If your company's talent and secrets are worth enough that you'll screw up someone's career, they should be worth throwing a bit of money after.
Yes, it'll annoy the free-market crowd here, but I'm generally in favor of more regulation everywhere - as long as it's determined by competent regulators who understand the field they're working with.
You do not have a moral or legal right to do absolutely anything you want.
By the very nature of a union, it must be public in order to gain members and perform actions like strikes
Wow. You are either incredibly naive and ignorant of history (which includes time periods like earlier this morning), or you are a very, very bad union shill that should explore other work before they start the decade-long process of trying to fire you, if they can, or simply wack you, because that involves fewer hearings.
Unions are famous for being run be people who conduct back-room political deals. Negotiations over things like pay and contract terms are held behind closed doors. Turf agreements between two overlapping unions involve lots of hidden negotiations and payoffs (consider, for example, how the Long Shoremen and the Teamsters decide at which mark on the concrete at the dock each of their guys must stop what they're doing and hand the task over to someone else). Entities like that wheel and deal out of view of their members and the public all the time. Agreements between unions (just like the agreements alluded to between Apple and Google) are made to benefit the two parties who agree on mutual behavior. Big Labor is every bit as careful to maximize their power, revenue, influence, and the pay made by their managers as any other large entity with a profit motive.
Ever worked a trade show in a place like Chicago or Las Vegas? No? You have absolutely no idea what the hell you're talking about.
Don't disappoint your bird dog. Go to the range.
I can't resist submitting these Adam Smith (the idol of free market advocates) lines copied from Wikipedia:
"We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate [...] Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people". In contrast, when workers combine, "the masters [...] never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen."
Smith, of source, said it much better than the clowns who opine here.
"If they want to make these "corporate unions" public they're welcome to have them. "
No they aren't. It's called collusion. Unions do not form an effective monopoly but corporate competitors colluding DO form such a monopoly and the law must prevent this. Not only for the anti-competitive aspects but because it tosses the HUMANS right to pursue happiness out the window.
This is used as evidence that the free market is a better way to stop predatory pricing than regulations such as anti-trust laws.
These examples only hold up perfectly in the case where there are zero barriers to entry. That situation only exists in laboratory economics. In real-world economics, there are barriers to entry that vary from limited (as in the case of unregulated commodities, like bromine, where the only barrier is setting up the warehousing and distribution) to extreme (as in, for example, pharmaceutical distribution). The notion that an unregulated market exists, let alone that it might resemble a free market, is not remotely reflected in observed reality.
Stop-Prism.org: Opt Out of Surveillance
How do you define poaching. After all, regardless of who initiates the conversation it is always the corporation that extends the offer so you could say any hiring is poaching.
This kind of thing could make you unhirable to the best market for your skills. If you work for a vendor supporting their product that vendor will typically require a non-compete from you and a non-poaching agreement from all their partners... basically everyone who wants the skills you have. There will be a time limit on this, maybe 5 yrs but this is tech. 5yr old expertise is the same as not having any.
Please mod parent up for this perfectly fitting Adam Smith quote... Perhaps one should post some juicy exercepts about his thoughts on why corporations are a perversion of the free market... Conservatives always seem to skip that chapter :)
I agree with you, but let me play devils advocate... Are they really colluding as competitors though? They may or may not be actual competitors in SELLING their products and are not colluding on that front, however labor is something they are in BUYING competition on.
In other words, does collusion between corporations who are in BUYING competition with apply to current anti-trust laws?
If they want to make these "corporate unions" public they're welcome to have them,
Sure about that? I doubt corporations are allowed to collude like this, even if they make it public. Unions on the other hand are encouraged to do so.
Kind of like price fixing; corporations can't get together and decide how much to charge for their products, but workers are allowed to form unions and decide how much to charge for their product (labor).
I'll define it by example, based on what I've seen firsthand: Initech was doing fairly well. Initrode wasn't doing so well, but had some new projects they were starting. Initrode sent letters to everybody they could contact as Initech, trying to recruit Initech's talent as their own. To me, that's the bad part of poaching, because it's clearly intended to specifically hurt competitors, and it cuts the public out of the chance to apply.
I personally haven't had much experience under non-compete contracts, but the ones I have used have been fairly limited in their scope. The widest one I've had prevented me from working in an equal role at any competitor in the same market. As that was explained to me, I could work tech support, database support, QA, or the like at a competitor, but not as a plain old "software developer". That agreement was also for only 6 months, so it didn't bother me much. Personally, I'm okay with contracts like that. I'm sure there are far worse out there, but I don't know how common they are.
You do not have a moral or legal right to do absolutely anything you want.
is not remotely reflected in observed reality.
I've never notice that real world observations had much influence on either economists or libertarians. Just look at the IMF/World Bank's prescriptions for economic recovery to every single client state. They've been using the very same recipe for half a century in spite of the fact that it has never worked even once, and in the vast majority of cases has worsened the client's situation. Of course you could be cynical and say that was the actual desired outcome, but the IMF/WB economists actually seem to believe their voodoo will work as advertised.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Free markets do work, they have worked, and they will work.
[citation needed]
Seriously, when have free markets ever resulted in anything other than a monopoly within a very few years of the foundation of a very wealthy competitor in the market? I can't think of a single instance where a free market ever led to an improvement for either customers or competitors over the long term. Short term, sure, but as soon as someone with enough money to manipulate that particular market sector notices the opportunity you may as well sell your shop and invest the proceeds in the up-and-coming monopolist.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Wrong, as this violates my Right to Work.
Yes, it should. Having limits in the buyers can have just as adverse affects on the markets as limits in the providers.
No. Just no. Essentially, you're saying that corporations should not have to work as hard to actually keep their employees. That just seems flat out wrong.
These agreements infringe upon the employee's Right to Work.
In my opinion, the agreements shouldn't prevent Apple from hiring a Google employee (or even offering a great deal)
Except... that's what they do.
"The largest and most powerful unions existed before 1935, when the government started getting intimately involved. "
There were also several massacres at corporate request during those times too.
"Personally, I'm okay with contracts like that."
How much worse does it have to get? Your agreement said that you couldn't perform the same job for six months after leaving. Working the same job when you switch from company to company is called a career. Fortunately that non-compete effectively prevents you from working in your chosen profession (software developer) and any non-compete that does so is null and void legally AFAIK.
BTW having now read TFA it clearly states that the anti-poaching agreements prevented the companies from hiring each others workers even if they voluntarily applied for the position.
"Initrode sent letters to everybody they could contact as Initech, trying to recruit Initech's talent as their own. To me, that's the bad part of poaching, because it's clearly intended to specifically hurt competitors, and it cuts the public out of the chance to apply."
I disagree. Competition is a good thing. When they are trying to recruit the talent from the other company they are also offering them a higher salary. This results in increasing average salaries in that profession. That is good for pretty much everyone. If Initech is paying their employees a generous wage and benefit package then Initrode won't have much luck.
The only reason for not wanting this is because companies don't want to have to offer and maintain generous wage and benefits packages. Companies want to cheat by hiring employees with less skill but raw potential at a low salary, encourage and sometimes even force those employees to develop their skills but keep them at a salary in the ballpark of their entry level skill set even though they now possess a skill set worth far more. Training in house is a valid strategy for having staff with a known skill set and competency and for minimizing the cost of those who don't work out. It isn't a valid strategy for avoiding paying competitive wages for their talent after it is developed.
Yep, I had to save up for a 6 month "vacation" when I last switched jobs in the SF Bay area. I had been working for one of the data center providers that serviced most of the companies in the region. Tied to their hosting contract, was a do not hire clause with a six month window, and I was told by HR that the only reason it wasn't "illegal" was because the agreement wasn't between the employee and company directly. It has been an open secret for some time that most of the major players also have these agreements in place. It is particularly frustrating, and effectively the same as a black list (which is illegal in CA), so I'm glad the practice is finally being investigated.
To be perfectly honest, if I had to sit around for 10 years (properly funded, mind you, so I won't starve and can still function in the economy) I would have my own killer product and/or software at the end of that time in a totally unrelated field.
I certainly wouldn't mind someone paying me to stay at home for a year - right now I have a few feasible products that I could develop if I could just get the time...
I'm a minority race. Save your vitriol for white people.
You are mistaken my friend.
Ron Paul believes the only role the federal government should play, is to preserve the rights of the individual. Every action he takes and word he speaks supports this viewpoint. The idea is that policy decisions ("regulations") should focus more on an individual's right to choose, rather than make that choice for them. This means improving contract law, preventing monopolies, encouraging market diversity/competition, and equipping individuals with the knowledge and skills they need to make rational ("self serving") free-market decisions.
What a lot of people don't realize, is that Ron Paul is the only candidate that presents a real threat to big business. This is why so much money is spent on keeping him out of the public eye, and discrediting his viewpoints.
Fanboy Status: Apache Flex, C#, Eclipse, KDE, Pirate Party, Ron Paul, Slackware, Windows 7
Because apparently banding together to leverage more power than you could individually is seen as "being weak" and "SOCIALIZM!!!"
Only if you're a provider of labor. If you're a provider of capital then it's called a "corporation" and it's considered the best thing since sliced bread ;-)
I wish I were as sure of anything as some people are of everything
Moreover it's against the (U.S) law to make a secret union.
They're called affairs, and they're not illegal, they're simply immoral, which means most people have them but say they don't, and those who don't wish they did.
I'm a free market guy, and this doesn't sound entirely crazy. If you are preventing someone from getting work, you are on the hook for paying them.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Yes.
Collusion among horizontal competitors (i.e. not up-and-down the supply chain, but across it with other companies on the same level of industry) is problematic (read: potentially illegal and contact a good antitrust lawyer) under the Sherman Anti-Trust Act.
The Act technically limits "restraint of trade," but that would, if read literally, prevent all commerce. Basically, Congress left it completely up to the courts to determine what anti-trust policy would be, by legislating very generically, in part because every case is quite different.
The courts don't like horizontal collusion.
The major players implicated here control enough of the market that the anti-trust people in government (the DOJ and the FTC are the big players, though I think the SEC and a few others sometimes nibble) will not be happy.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!