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Judge Denies Dismissal of No-Poach Conspiracy Case
theodp writes "Testifying before Congress in 2007, Google's HR chief stated: 'We make great efforts to uncover the most talented employees we can find.' But according to the U.S. Dept. of Justice, Google actually went to some lengths to avoid uncovering some of tech's most talented employees, striking up agreements with Apple, Intel, and other corporations to avoid recruiting each other's employees. On Thursday, U.S. District Judge Lucy H. Koh ruled that Google, Apple, Intel, Adobe, Disney, Pixar, Intuit and Lucasfilm must face a lawsuit claiming they violated antitrust laws by entering into no-poaching agreements with each other. 'I don't want to see any obstruction on discovery,' Koh told lawyers during a hearing. According to the head attorney representing the plaintiffs, the total damages could exceed $150 million if just 10,000 entry-level engineers were affected."
It's not about the consumers, it's about turning employees into slaves.
I worked as a contractor for Google a few years ago. You would probably have to work in video game QA to find a bigger sweatshop out there.
Because all of the employees that get a lower salary due to the agreement are also consumers. It also indicates that the companies are not interested in competing with each other to produce the best products by recruiting the best talent.
It's great that they're getting hit for this, but who exactly is going to get that money?
Somehow, I doubt those effected will see a dime, and lawyers and government stooges are going to get it.
Justice for all my damn foot, why don't more people attack that part of the pledge?
What do I know, I'm just an idiot, right?
It’s not about the consumers, it’s about the employees. Companies want to keep their payroll down so they conspire not to hire the other’s employees. Dampens completion and thus pay.
On the flip side, I have seen a rival company hire away whole teams. All of a sudden a company had a great line of business and the next day it’s across the street. Sometimes it has been a key operations department (i.e. the department that keeps the companies’ door open, not one that makes any profit.) It can be quite stressful for a company.
In my line of business, if somebody wants to poach another person’s team (Such as all of the brokers in a office or a analyst team) the only answer is more money. On the other side, if one want’s to poach a operations team, you got to leave enough people so the company can run. Not quite fair that the 2 types of people are treated different - it's jus the way the cookie crumbles.
If companies do not compete for employees then they are stifling salaries and playing people less simply because they have a monopoly set up.
Troll is not a replacement for I disagree.
It's GOT to be illegal. Companies must compete (in terms of wages, working conditions, other benefits) for workers in order to have a working system. Otherwise, you sign up for Google and they can treat you however they like, they know none of the other companies will take you off their hands, so why pay you more?
this isn't about monopoly power; it's about workplace discrimination. If I apply for a job, it's illegal for the employer to deny me the job capriciously, including the fact that they have a side agreement with their competitors not to hire me.
How is this any different from a union? And if it's okay for unions to do it, why isn't it okay for companies?
I'm a psychologist (amongst other things).
You forgot, the consumer is not the customer, they are the product.
Care to share more details?
So you're saying that if you worked for Pixar you would be perfectly happy that Lucasfilm can't come and make you a better offer.
Yeah, you might end up having to work on another Star Wars prequel.
Sheesh, evil *and* a jerk. -- Jade
WOW, wow and wow. So now the little man is the greedy one!!! How....funny. What is next? The little one is paying less taxes than the BIG one? Oh, yes, i almost forgot: WHITE IS BLACK AND BLACK IS WHITE.
Dare to prove your point? Because, it is equally easy to say that they get 3-10x LESS average salary....
Yup. People sucked down this motto and believed it. The fast is that the nature of business is often contrary to the general public interest. This is why we citizens band together in the form of governments to counterbalance some of the negative side of business. No, this isn't a diatribe against capitalism. It is simple a recognition that capitalism has its weaknesses that must be addressed and reckoned with.
Put two saints in charge of a business and you will find that they begin behaving in ways that the wouldn't if they weren't in a powerful position. it doesn't make them evil. It is simply a response to the environment and the forces around them. Our gov't should place restraints in place to minimize anti-society behavior.
When Google puts in the "no poaching" agreement, it is acting in its own best interest, but not in the best interest of society as a whole. Citizens should be free to work in the best environment for them. This isn't a profit driven value. It is a freedom based value. Google is acting against that and should be slapped in the language that corporations understand -- the bottom line. The slap must be hard enough to change behavior, or else it will be deemed a cost of doing business.
And if you still think that we just need the right people in charge of companies, people with the right ethics and then everything will be perfect, you are absolutely deluded. Granted, we DO need strong ethics in those who hold power. But be damned sure that even those people will act against the interest of the rest of us.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
I guess you could say it isn't, but the threat of workers being poached (in *some* sense) is what keeps wages from falling to zero in the first place, protecting the worker.
It happens in a different form for lower-wage workers, like in fast food or janitorial services: employers have to pay enough of a wage that the workers won't flee and go to someone else who offers more.
In high-wage tech jobs, it more often takes the form of some company actively seeking out the worker and making a competitive offer.
Either way, "competition" for workers is what keeps wages reflecting relative scarcity of that kind of labor (with a ton of caveats I won't go into, obviously. And whether or not you agree with the idea, antitrust is intended to prevent anti-competitive behavior, whether regarding consumers or workers.
Information theory is life. The rest is just the KL divergence.
California Business and Professions Code Section 16600 nullifies any contract that restrains anyone from engaging in a lawful business, profession, or trade. In other words, non-competes and non-solicits are not legal in California. CA courts have also rejected the "eventual disclosure" theory that would prevent someone from taking a job because they know trade secrets.
Sec 16600 is, in part, why Silicon Valley is in CA and not NY or MA.
These "anti-compete" rules have no teeth except in a few isolated cases. My company has hired people from competitors and vice versa. Execs sometimes get all red in the face and talk about taking it to court (the same execs that poached from their competitors). The company lawyers get involved and break the bad news that there is no case. I've seen it happen enough times that it is comical.
There appear to be two exceptions: The trade secrets "rule" (have never seen this one applied) and the book of business rule (which I have seen... typically there is a waiting period before solicitation of existing clients). I made up these two "rules" based on my observations, there may be more nuance than what I am aware of.
So, to your point, these lawsuits have already been greatly shut down.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
It is short sighted to assume that this is just about well paid programmers. Employment law applies to all corporations. If it were legal for high value employers like Google etc. to conspire to drive down wages, then it would also be legal for low value employers to conspire and do likewise. It could easily be the case that, in certain geographic regions or areas of industry, there would only be a few potential employers for certain classes of worker, and collusion between these employers could drive wages down to minimum wage, or even down to an unliveable wage for places that don't have a minimum.
The market for employees is just like any other functioning market. Companies colluding to reduce competition in the marke makes the market less efficient. If you are an economist, or just a person who favors capitalism and competitive markets, then you should be against this.
Even worse, parts of the allegations verge on blackballing: it's alleged that when an employer from company A applied to a job at company B, where A & B were part of the "no-poaching" collusion agreement, company B would not only refuse to hire them to avoid poaching, but actually rat the employee out to company A, telling them that this employee tried to apply for a job.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
"It is legal for companies to put agreements not to work for a competitor in a contract. "
They can put it in the agreement. It is, however, for the most part is unenforceable. One thing that people don't seem to realize is that if a contract is deemed to be against the public interest, it is null and void. Non-competes fall in this category except for some specific exceptions.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
So what's stopping someone from applying for another job? This is all about poaching: that is, the thing Microsoft did back in the day to kill Borland by making ridiculous offers to a direct competitor's employees to effectively hobble the company. How is that not evil?
If Google was sorting through their data to determine who the top Apple/Pixar/etc developers were and making them offers they couldn't refuse in an effort to stymie competition, that would be worth bitching about. There is nothing stopping anyone from applying for a job on their own time, and none of this is about not hiring the competition... it's just about not actively seeking out competitor's employees at their workplaces.
If it comes to light that these companies were actively refusing employment and reporting applications to their competitors (for "disciplinary purposes"), then it will be evil. Not pestering employees during work hours with potentially embarrassing job offers seems more like courtesy.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
You might want to go research which mobile platform GOOG makes the most money from.
Hint, it's not Android.
There are two types of people in the world: Those who crave closure
I'm sorry, but 10x average salary. Hmm, I'm an engineer. Average salary is somewhere around 45K a year. I don't know any that make 450K a year. I would say 2x isn't uncommon, and some of the highly compensated might make 3x average, but 10x, no.
But then comes the muddying of the water. First, we do a job that very few can do. The drop out rate in school is >70% of the people who attempt to earn the degrees. Further than that, I don't have a number, but a fairly large percentage enter the work world, and discover they can't handle it. This leaves a very small number of people who can actually produce as an engineer. Toss in that EVERYTHING needs to be engineered. Whether due to nature of the product or due to regulation, this is just a fact of life. This creates high demand and low supply, which leads to our seemingly high pay.
But wait, now for such a needed profession, then it turns out, we're actually not highly paid, even relative to what we do. For some odd reason, especially in tech, the companies are always locals with high cost of living. This means, comparing the salary of an engineer to a farmer in the mid-west isn't really fair. Compare an engineers salary to the average in the bay area, that'd be more fair. And then of course, the average american works on average of 38-39 hours a week. The typical engineer looks at 40 hours longingly. We're all salaried employees, which means we don't get overtime, and 50 per week is fairly normal. My last job, I would regularly crack 65 and even had a couple months where I was averaging 80 hours a week. People who've never worked 80 hours really can't grasp it. I never thought 80 would be much until I did it. that's 12 hours a day, 7 days a week. You literally get up, get dressed, drive to work, work, drive home, eat dinner, get ready for bed, and sleep. That's it. For double, or MAYBE triple the national average salary. And then you throw in companies that try to hinder people trying to improve their lot a little.
You'll undoubtedly say "well, if you don't like it, then leave", but that mentality ignores some very important factors. Engineers are an odd assortment. First, we typically genuinely love what we do. We don't mind working 50 hours a week, because we love it, but that doesn't mean we don't get exhausted. Also, our work ethic is typically top notch, and we have a huge amount of pride in what we do. We take ownership in what we create and it hurts us to abandon it. We also put up with an amazing amount of BS. A lot of companies understand this, and use it to their advantage to basically turn us into slaves. Yes, not in the literal sense, but by taking advantage of our idiosyncrasies, they effectively do.
Of course it should be. People should not be locked into one employer just because any potential employer in their field has a No Poach agreement with their current employer. It seems ridiculous now, but as these companies get larger, and their reach and influence gets larger, it's only going to get worse.
If things like this are allowed to stand, how long will it be before you're basically locked into an employer for life? People laugh at the rhetoric that gets thrown around these days, like indentured servants, or serfs, but really, what else could you call employees in a situation like this? And what recourse would employees have? Leave their field entirely? Or the deliberately ignorant "Start your own business, then!!" that is thrown around whenever anyone complains about their employer these days?
It never ceases to amaze me how much the common man will fight against his own self-interest. In what possible way could these No Poach agreements benefit anyone that is not a C-level executive at any of these companies?
Not just unenforceable, but actually prohibited in California (where all this anti-poach activity is going on)..
However, there are devious ways to achieve the same result: Allege that the leaving employee possesses trade secret knowledge that will inevitably be disclosed. Whether or not that's true (and the courts tend to say it's not), the threat of litigation accompanying your hiring that person tends to have a chilling effect on the whole thing.
What, you think being a programmer somehow cures someone of greed?
Just as businesses face real incentives to get as much work out of employees for as little money as possible, employees face real incentives to get as much money out of employers while contributing as few hours as possible.
While there are some people who are satisfied with "enough," it is human nature to want more.
Hey, you can't always be on the winning side of at-will firing.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Why is that a reasonable excuse? How is that not discrimination? Why should my current employer disqualify me from a job with another one if I meet every other criteria for employment?
Exactly. What happens when Walmart, Target, ShopKo, Best Buy, and every other big box retailer do the same thing? What happens when every major employer in a given field starts doing this?
This kind of crap has too much of a feudalistic flavor for me to stomach...
From http://www.ehow.com/list_6581312_legal-grievances-wrongful-termination-issues.html
The Civil Rights Act of 1964
This legislation prohibits employment discrimination based on race, color, religion, gender or national origin. The law exempts religious organizations. If the reason for firing is arbitrary but is not included in a protected class, the firing is legal. For example, an employer cannot fire a woman for being Cambodian but can fire her because he does not like women who wear large, golden earrings or something equally capricious.
Sounds like I'm right. So what's your point?
There are two types of people in the world: Those who crave closure
You just don't get it. If they hired from each other, the employees who changed jobs get 20% or greater pay increases with each jump. Because they are paid more their "peers" demand more and they get 10% or more pay increases. Eventually college students, seeing how the pay scale is rising, go into the field, causing an adequate employee supply and reducing the upward pressure on pay. The pay scale for these employees would be significantly higher than it is today. By avoiding this cycle, the companies reduce their payroll costs significantly and they are doing so through collusion.
This is why the Government should stop trying to promote STEP because they keep trying to keep the cost of engineers down by granting visas to foreign workers and Mr. Obama announced in the State of the Union Address that he wants to keep foreign born US educated engineers here, which will only decrease the pay scale for all engineers. If we need more engineers then we need to let the market make it more attractive to become one, not dangle citizenship to fill the gap.
The US government have made it clear that we have no inalienable rights; any we do not defend vigorously will be taken.
... Google, Apple...
They aren't allies.
Steve Jobs and Eric Schmidt were actually good friends for a while. Schmidt was even on Apple's board, until he had to leave when Google bought Android and it created a conflict of interest. That was one of the reasons Jobs was so mad about Android -- he felt like it was busting up his friendship.
Incidentally, if you want to help me test a hypothesis, try paying attention to the media coverage of this story to see how much the MPAA-owned media cover this story with Google as the principal antagonist/coordinator of the scheme and Apple as a secondary or unimportant player now that Google has gone to bat for us against SOPA, even though it was Steve Jobs who started the ball rolling on this whole no poach thing. Pay special attention to News Corp coverage (e.g. Fox News and the Wall Street Journal) -- my hypothesis is that Murdoch has it in for Google now and is executing a campaign against them. Let's see if I'm right.
It does indeed. But unions have a statutory antitrust exemption.
I guess you could say it isn't, but the threat of workers being poached (in *some* sense) is what keeps wages from falling to zero in the first place, protecting the worker.
You exaggerate a bit. The average wage you would get in a world without the threat of workers quitting or getting hired away is basically W = (R + T) / 40 + U, where W = annual wages, T is the cost of training the worker, R is the cost of providing the basic necessities of the future worker from birth to the start of their career, and U is the annual upkeep of the worker (food, shelter, water, clothing, health care, transportation to/from work and stores). The '40' is the length of the worker's career, generally assumed here to be something like 24-64.
For a software developer, that comes out to something like:
R = $270,000
T = $150,000
U = $20,000
W = ($270000+$150000) / 40 + $25000 = ($420000) / 40 + $25000 = $10500+$25000 = $35,500 annual after-tax income.
Which is still obviously way lower than the competitive salary of a developer.
I am officially gone from
I see. Google benefits by being sued by Apple. From Apple's perspective this is perfect logic and reinforces their walled garden mentality concerning the internet.
The reality is that every corporation is exploiting someone to make money and soon the consumers at the bottom of the food chain will have all been consumed essentially crashing the entire ecosystem.
Changing jobs may get you a salary increase, but it doesn't come without costs. In reality this creates at some point an equilibrium. An employee who bounces from one job to the next is not likely to be viewed as that attractive to an employer unless they have a very special and unique talent. In that case, why shouldn't they be allowed to use it as part of their negotiation? Sports teams confront this issue all the time. They make contracts to lock people in. This would be far preferable arrangement all around rather than letting the owner's to collude so that players must play for next to nothing, simply because of their ability to lock anyone out of the game. Its a question of balance. Its not simply a question of what is good for one company or another, because there are third and fourth parties here, namely the employee and the general consuming and non-consuming public, which although not necessarily buying what either of the litigants are selling may still be affected by the transaction.
Shouldn't the best players in the league be paid more? Even sports teams have what are called free agents. If companies want to retain employees they need to get them to sign a contract that stipulates not only the amount of their pay, but also the duration. From a business perspective this would create more stability than trying to engage in non-poaching deals.
Three negatives! Did anybody else have trouble parsing that sentence?
I didn't lack any difficulty failing to be unable to misunderstand what they didn't intend to deny.
"In any case, antitrust is a waste of resources since cartels are inherently unstable barring state intervention."
Unstable? LOL. Tell that to OPEC.
No, no. It's ok to do that to the lower classes, because this keeps costs down, which lets the upper classes get more. This increase in wealth will eventually trickle down to the lower classes in the form of more shitty, underpaid jobs. Because, you know, companies just hire people out of the goodness of their hearts when they have more money. It has nothing to do with the level of demand at all.
Absolute not-hire. Even if the employee came to the company on their own, they couldn't extend an offer.
Further, both situations are completely shitty, as both represent a cartel attempting to exert their power to control the price of a resource for the rest of the market. There is absolutely no reason why any of this shit should be allowed to stand.
I see nothing inherently immoral or unethical about this; it just makes good business sense.
I'm sorry, that makes you a complete and utter pile of shit. I don't give a shit what "business sense" it makes, they are colluding to artificially limit the market for that employee's skills.
The people who write comments on here obviously have never owned a business in the real world.
And go fuck yourself. Why should anyone have to "own a business in the real world" in order to see that this is not right, and is another example of Big Business attempting to use their size and power to exert more control on the rest of us?
I see your point, but you sort of speak against yourself by bringing up the CEO pay example. After all, isn't the complaints about CEO pay by everyone just a plea for someone to collude to keep people with certain rare skills (Executive Management) from making as much as the market will bear? You may not think much of CEOs, but it's the same thing. The only difference is that you either simply don't like CEOs or you devalue their skill set, and while there are definitely some sociopaths out there in the CEO position, I'd argue that it is a position you need some very stong skills to do successfully.
In any event, people with rare skills are not the general worker population that unions and such would be working for. Unions tend to cut down people who try to use their skills to rise above the norm in terms of pay and benefits, instead, they usually insist on a seniority basis for any sort of increased compensation.
I'm not saying that I like that CEOs make as much as they do, but I often wonder if it even matters how much they make. Do lottery winners suddenly become threats to society with that money, simply because they have a lot of it? Honestly, this country isn't going to fall apart because some people make more money than others, it's going to fall apart due to our attitudes about what is good to do with that money, and that's something that reaches right down into the "lower" classes as well. We seem to care more about how much someone else makes and pay no attention to what we do with what we do make. After all, isn't that what the mortgage crisis was all about? People taking out loans they simply couldn't afford, just because some loan officer told them it was okay for them to spend as much money as they could?
There's always going to be someone like a CEO out there. If you abolish them, then the rich people will be the political leaders or the union leaders. If you abolish money or private ownership, then the rich people will be the Leaders of the Revolution. Pointing at these people is like pointing at the sun for being too hot and wondering why someone doesn't just take that big ball of gas down a notch.