Years ago, by way of some emails bein all “hey, wtf man?” and “okay dawg. i’ll back off cuz I agree thats not cool” style emails between CEO’s – Apple, Google, Intel and Adobe agreed to not poach each others employees. The employees didn’t like that because they of course want to be pursued for better deals for themselves plus leverage to demand more pay from their existing employer if a competitor is offering them a more attractive deal. The companies on the other hand could do more harm than good for themselves if they poach competitors employees either successfully or un, causing unnecessary friction. The companies decided that it was in their best interest to leave each others existing employees alone.
In 2011 the tech employees brought forward a lawsuit alleging a conspiracy that closed their options and capped their potential salaries. That totally happened, but that’s not illegal. It’s not even improper. No one was denied a job because of some evil corporate conspiracy – people were simply not sought out for positions within a corporation because they were already working for another corporation.
Bloomberg classifies this as “screwing over employees” as their report includes the image below. Actually, it is merely an effort by the companies to stop screwing themselves.
In pure anti-progressive traditionalism-as-law, the court actually used the allegation of this not being a standard practice as part of its slam against the corporations, creating a regressive and illogical precedent in a search for an excuse to restrict their freedom to make its own employee-poaching policies. Even though this is not true, as a memo released with the emails of the “do not entice away” agreement note, the argument would be just as terrible without that little/crucial inaccuracy.
The companies had conceded that the pacts “contained nearly identical terms, precluding each pair from affirmatively soliciting any of each other’s employees,” Koh noted. The judge stressed how unusual this kind of systematic plotting is—in the Valley or anywhere else. CEOs of rival companies may nod and wink to each other over drinks at the club. Competitors may refrain from going after a select number of one another’s most highly valued employees. In the antitrust case, Koh said, the defendants’ own experts admitted “they are unaware of these types of long-term, all-employee agreements ever occurring between other firms.”
In other words: This would have been 100% fine by the American judicial system if it was shadier and more conspiratorial. But since it was a legit agreement actually stated on the record and because companies usually don’t go on the record in legit ways, these companies must be penalized…for not being sketchier about their perfectly reasonable and legal agreements they make with each other.
Unfortunately you can sue for anything in America and there is no loser-pays rule in place (not that I think this case would even be a likely loss for the plaintiffs) so it was in the best interest of the tech corps to settle this rather than have to open up their records defending this frivolous allegation of something that isn’t illegal but that some people don’t like because they could have benefited if only other parties didn’t act in their own best interest. The problem is that even though “lets agree to not poach each others employees” is not against any rules, it is enough in the direction of something that sounds like a budding conspiratorial monopoly and there *are* laws against that. As far as I know, however, there is nothing actually wrong in any way to agree to not actively pursue currently employed people in efforts to convince them to be employed by you instead. As far as criminal collusion regulations go, it sounds more than a little bananas to be forcing companies to try and poach each others employees at a higher priority than any other employee pool.
But it sounds not nice and it involved billion dollar corporations (and often times millionaire employees, lets not forget), sooooooo… the 4 companies settled, agreeing to pay out hundreds of millions of dollars to these employees. for the non-crime of not offering them new jobs…
How much do you think a reasonable amount to get paid for not being offered a job? A few hundred million divided up, enough, you think? A judge has to approve the settlement, so there is literally a person in charge of deciding if the person suing is getting enough money to be “settled” or not.
CNBC reports that San Jose, California U.S. District Judge Lucy Koh said the proposed settlement amount “falls below the range of reasonableness.”
The four companies agreed to settle with the plaintiffs in April for a total of $324.5 million. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.
The case was based largely on emails in which Apple’s late co-founder, Steve Jobs, former Google Chief Executive Officer Eric Schmidt and some of their Silicon Valley rivals hatched plans to avoid poaching each other’s prized engineers.
In one email exchange after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt’s note to a top Apple human resources executive with a smiley face.
Plaintiff attorneys argued Koh should approve the deal because the workers faced serious risks on appeal had the case gone forward.
I get the emotional appeal of wanting businesses to do things that benefit you and getting mad when they only benefit you a lot instead of more than a lot, but I don’t see the anti-trust criminality in emailing someone in your field of businesses and deciding to not fkk with each others employees.
Colluding to keep safety hazards in your products a secret from the public, blacklisting certain people from being hired when they apply to work for you, or conspiring to artificially jack up prices across an industry – these are criminal and immoral practices of antitrust corporate scummery. These 4 companies did nothing near any of that. This is stupid and unreasonable.
