Silicon Valley Anti-Poaching Cartel Went Beyond a Few Tech Firms

The gentleman's agreement that several Silicon Valley firms are now widely known to have taken part in to minimize employee poaching within their own circles went much further than has been generally reported, according to a report at PandoDaily. The article lists many other companies besides the handful that have been previously named as taking part in the scheme to prevent recruiting, and gives some insight into what kind of (even non-tech) organizations and practices are involved.

Comments

Re:Capitalism at its finest

[Stumbles]

That's not capitalism.

Do the crime, do the time

[Herkum01]

So, can look forward to anyone doing jail time? That is the really the only way this will stop. That or directly start suing the individuals who implemented the policies and make them pay. After that I am willing to bet once a few executives lose their hard won millions will be a little gun shy about conspiring to do anything.

Actually the more I think about it, the best way to reign these practices in is directly suing individuals. Once they can no longer hide behind the corporate veil, the less inclined they will be collude together.

Re:Do the crime, do the time

[Stumbles]

Jail time? Your chances are better at getting struck by lightning or winning a lottery. Its always the big fish getting called out on these practices but it would not surprise me if the same occurs with the small fry.

Re:Do the crime, do the time

[geek]

The executives essentially formed their own union. The gentlemen's agreement (which is anything but. A crony capitalists agreement is a better name for it) is simply their by-laws.

To counter this, every tech worker in the entire valley should form their own union and stick it to the fucking executives for a change. I moved from the valley 15 years ago because of shit like this. I'll never return but would love to see these mother fuckers get what is coming to them.

is it illegal?

[globaljustin]

Is it illegal to make these "agreements"?

I think it's ridiculous, and like another pointed out, shows a flaw in capitalism.

It *should* be illegal. IMHO it's an anti-trust issue. Workers are vendors of their labor, and the owners of the capital are colluding, like a 'trust', to monopolize & unnaturally control the scarcity of that capital.

Re:is it illegal?

[mikael]

Making employees sign Non-Compete Agreements are illegal in California. But by preventing employees from moving around freely, that could have restricted them from getting pay rises and consequently depriving the state and federal government from getting income taxes.

Re:is it illegal?

[Charliemopps]

The test for weather something is good for capitalism or not is "Does it increase or reduce transparency in the marketplace" If it increases it, then it's good. If it decreases it, then it's bad. Clearly these agreements reduced transparency and closed off parts of the market to both the workers and even the firms involved. The firms were then able to use this secret blacklist against their employees to reduce the rate at which they increased their compensation. The worker would apply and quickly learn that most places wouldn't hire them. This is exactly what anti-trust laws are supposed to prevent. Secret agreements between 2 parties that affect public agreements of a 3rd unwitting party are the bane of capitalism. And, in fact, if you were to argue against capitalism, the inevitability of such agreements would be one of your strongest arguments.

Re:is it illegal?

[nut]

It is a restraint of trade. If it was built into a contract it would be unenforceable at the least, probably illegal in many jurisdictions, although some restrictions in employment contracts are enforceable provided they are, "reasonable."

It tells you something that it had to be a gentleman's agreement. I'm sure if they could have legally put it into employment contracts they would have.

Re:is it illegal?

[Bob9113]

Is it illegal to make these "agreements"?

Yes, which is why the DoJ is already well on the track to sentencing, and the companies are begging to broker a deal. And what's more, they've got the dirt on one of the originators of the scheme admitting he knew it was probably illegal and trying to cover his tracks (mens rea).

âoeI would prefer that Omid do it verbally since I donâ(TM)t want to create a paper trail over which we can be sued later? Not sure about this.. thanks Eric [Schmidt]â

Remember that whenever you hear "Do No Evil" -- that was mostly Sergey, and a little bit Larry. Eric Schmidt hates you and masturbates while thinking of doing evil.

Re:is it illegal?

[BradMajors]

* Multiple times I have had companies explicitly tell me they can't hire me because my current employer would retaliate against them.
* A manager offered me a position, but then called me back and told me that HR told him he could not hire me because of a secret inter-company agreement, neither I nor the manager knew anything about, that prohibited him from hiring any of my employer's employees.
* I have personally seen a company to company contract which stated that neither company will hire each other company's employees.

These non-compete agreements between companies are well know and common, these companies have never been prosecuted, and these companies have no fear of prosecution.

Re:is it illegal?

[stenvar]

Workers are vendors of their labor, and the owners of the capital are colluding, like a 'trust', to monopolize & unnaturally control the scarcity of that capital.

Your analogy is wrong.

The "scarce product" here is the labor, and workers own that product. When the owners of that scarce product are colluding to keep its price high, that's called a "labor union". Labor unions and collusion among workers to artificially inflate the price of labor are legal. In fact, in many states, you can be forced to participate in such collusion and price fixing against your will.

In this case, the buyers of the labor collude to keep prices low. That is certainly not analogous to "anti-trust" issues in the way you argue.

Should it be illegal? I still don't see a problem. People move between these companies all the time and there is binding agreement not to hire. People apply from one company to another. External recruiters recruit across those companies.

All these companies have agreed on is to have their HR departments not actively recruit from each other, which frankly seems more analogous to keeping telemarketers from constantly bothering you.

Re:Capitalism at its finest

[Anonymous Coward]

Ah, yes, the "no true capitalism" defense. The final and greatest argument Randroids resort to when faced with the reality of their idiotic beliefs.

Re:Capitalism at its finest

[Stumbles]

Yep and then try to convince us all it was the fault of capitalism.

Collusion vs no solicit

[tomhath]

The article mixes two things:

Collusion between the companies to not recruit from each other, which is apparently illegal (since the DOJ stepped in).

No solicit agreement with employees. That's part of a contract, I'll hire you but you have to agree that you won't refer my other employees to the headhunter who placed you. That's pretty standard and presumably is legal.

Re: Collusion vs no solicit

[Anonymous Coward]

Not in California it isn't, same with non completes. Edwards decision killed non-solicits. You want capitalism then have captialism and make sure you pay your employees well.

http://www.hrthatworksblog.com/2013/01/30/the-difficulty-of-enforcing-non-solicitation-clauses-in-california/

Re:Collusion vs no solicit

[Charliemopps]

The "legal" method that's fairly standard is the other way around. The temp agency places you, and you work for them. The company hiring the temp agency agrees not to hire you for a term... 6 months to 2 years depending, because the temp agency needs to recoup the cost of scouting you. Often there's a clause where the hiring company can buy their way out of it if they really want you bad or they're afraid you could just go to a 3rd party. All of this is pretty standard and legal because everyone knows what they're getting into. But, if unknown to you, every other party has made a secret agreement with the original company not to hire you, you're screwed. There's no-where to go and you're no longer dealing with a free market. You're being forced to abide by a contract that you never signed and don't even know exists.

I wish I were oppressed

[LordNimon]

Apparently, none of the companies I've ever worked for were on that list, because I'm hounded by clueless recruiters every week.

Re:I wish I were oppressed

[phantomfive]

Reply to them and say your minimum is $210k per year (or whatever). That will shut down almost all of them.

Re:Capitalism at its finest

[x0ra]

How is that not capitalism ? Capitalism is free market, all the player are free to interact as they please, might it be by competing or by cooperating. By your same logic, the whole open-source community should be forbidden by law to cooperate.

Re:Capitalism at its finest

[ObsessiveMathsFreak]

Capitalism is whatever rehtorically useful construct I define it to be. For example, today, capitalism is a system for distracting me from my overloaded inbox to post on Slashdot. Capitalism is the oppressive system that prevents me from sleeping in on the weekends.

What's your Capitalism today?

Like MS and Borland

[ToasterTester]

I remember when I worked for Borland we used to joke that we were Microsoft's training site they poached so many people. From what I understand in one of the MS/Borland lawsuits Borland got no-poaching added as part of the settlement.

I'm calling bullshit.

[jcr]

If anyone actually was trying to collude to hold tech wages down, they failed. We're some of the highest-paid workers in the country.

I got cold-called by Google recruiters when I worked at Apple, and I know people who've gone from Apple to Pixar, Apple to Yahoo, Microsoft to Apple, etc, etc.

-jcr

Re:I'm calling bullshit.

[phantomfive]

We're some of the highest-paid workers in the country.

Imagine how much we could be paid if they hadn't colluded.

Re:I'm calling bullshit.

[jcr]

This seems mostly to be about executive staff and salesforce.

I know people who've gone between these companies at all kinds of levels. Engineers, first-level management through SVP level, everybody.

-jcr

Re:Capitalism at its finest

[x0ra]

it would include people who would make these law, so it will never happen. Let's face it, a sheep will always complain about the wolves, but it will always remain a sheep...

Re:Capitalism at its finest

[x0ra]

The system you describe is closer to mercantilism than it is to capitalism. In capitalism, whatever is beneficial to me is good.

Re:Capitalism at its finest

[x0ra]

I don't see how, but that often the case when people go emotional... Maybe you can do better and have a logical reasoning on all this ? Btw, yes, I do appreciate Ayn Rand more than appreciate Marx or Kant.

List of Companies

[bill_mcgonigle]

which the TFS failed to include, as contacted by the publisher:

AMD
AOL
Adecco
Adobe
Apple
Best Buy
CDI Business Solutions
Cingular/AT&T
Clear Channel
Comcast
Dell
Dreamworks
eBay/PayPal
Foxconn
Genentech
Google
IBM
Illumita Inc.
Intel
Intuit
Jcrew
Kelly
Kforce
Lucasfilm
Mac Zone
Microsoft
Nike
Novell
Nvidia
Oglivy
OpenTV
Oracle
PC Connection
PC Mall
Pixar
Sun Microsystems
Virgin Media
WPP

It would be interesting to see the connectedness of the Boards of Directors graph for the set.

I worked for HP in Silicon valley in the early 90s

[oscrivellodds]

They used to actually tell employees in big meetings of engineers where they announced the annual pay raises. First they'd give a powerpoint presentation on their benefits packages, etc., and explain that their HR people had met with HR people from other big engineering employers in Silicon Valley and elsewhere to agree upon job titles and descriptions and pay scales. Finally they'd announce the annual raise and everyone would cheer except me, who didn't like being told "don't bother looking for a better deal, we've seen to it that you won't get one".

I ultimately left HP and went to Fujitsu, a company that wasn't part of the "cartel" and got a pay raise of 50% and kept all my hard earned vacation time to boot. I haven't seen any mention of HP in any of the articles about this yet.

"Gentlemen's Agreement"

[BradMajors]

Please stop calling this a "Gentleman's agreement. Those engaged in this practice are not "gentlemen".

Re:Capitalism at its finest

[strikethree]

Capitalism is free market, all the player are free to interact as they please, might it be by competing or by cooperating.

No. Once they start cooperating, it is no longer Capitalism. Capitalism is defined by competition. Freedom of interaction is something you are adding... incorrectly I might add.