Tech Giants Accused of Recruitment Collusion

The case against major tech firms that allegedly colluded to keep engineer salaries down looks to have become a lot stronger with the publication of e-mails between the companies. It’s for a civil court to decide whether the agreement between companies such as Apple and Google was unlawful, but it now appears incontrovertible that such an agreement existed,

There’s already been an investigation by the US Justice Department that concluded in an 2010 agreement signed by Adobe, Apple, Google, Intel, Intuit (an accounting software developer) and Pixar. The firms said that in the future they would not make deals to refrain from approaching one another’s staff with offers of employment. Of course, while the firms promised they wouldn’t do so in the future, they weren’t officially acknowledging having done so in the past.

The question of what happened in the past is the heart of an ongoing lawsuit brought by five software engineers who believe that anti-poaching deals between the companies restricted their negotiating power. They are looking for the case to be granted class action status.

It should be noted the allegation is not that all six firms made a comprehensive pact, rather than there were a series of bilateral agreements between various combinations of the companies, as demonstrated in the image above, provided by the plaintiff’s lawyers.

The e-mails published this week include Steve Jobs telling Google chief Eric Schmidt (who was at the time an Apple board member) that a Google employee had attempted to recruit an Apple employee. Jobs noted “I would be very pleased if your recruiting department would stop doing this.” Schmidt passed on the message and it appears the Google worker who tried to arrange the poaching was fired on the spot.

An even more incriminating document revealed by the plaintiffs is a note from Intel’s chief executive referring to a deal with Google, but noting “Let me clarify. We have nothing signed. We have a handshake ‘no recruit’ between Eric and myself. I would not like this broadly known.”

The evidence also includes a message from Palm’s chief executive to Steve Jobs, publication of which confirms a previous rumor that Jobs had offered a no-poaching deal and that Palm had rejected it on the grounds that it would be “likely illegal.”