Apple, Google settle with DOJ over staff poaching agreements
Silicon Valley stops deals that prevent tech firms from hiring away valuable employees from each other
By Nancy Gohring | Published: 11:40, 27 September 2010
Google, Apple and several other companies have reached a settlement with the US Department of Justice over charges that they agreed not to hire away high-profile workers from each other.
If approved by the court, the proposed settlement will conclude an investigation that started in the middle of last year. The DOJ says the companies acted anti-competitively by agreeing not to cold call each others' employees to offer them jobs.
The deals were between Apple and Google, Apple and Adobe, Apple and Pixar, Google and Intel, and Google and Intuit, according to the DOJ. The first such agreement was made in 2005 between Apple and Adobe.
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The DOJ filed a civil lawsuit on Friday in the US District Court for the District of Columbia and simultaneously filed a proposed settlement.
The DOJ said the no-solicitation agreements eliminated a significant form of competition to attract highly skilled employees and deprived employees of the chance at better jobs.
It also said senior executives at the companies actively managed the deals. For instance, Apple and Intuit each complained to Google that it had violated agreements between the companies, and Google investigated the incidents, the DOJ said. Each time, Google found it had not violated its agreements.
The suit implies that Adobe was bullied into its deal with Apple. Apple approached Adobe about agreeing not to cold call each other's employees, according to the DOJ. "Faced with the likelihood that refusing would result in retaliation and significant competition for its employees, Adobe agreed," the suit says.
As part of the settlement, the companies have agreed not to ban cold calling and not to enter, maintain, or enforce any kind of agreement that prevents competition for employees. The deal, which still must be approved by the court, would be in effect for five years and require the companies to take compliance steps to ensure they stick to it.
Google said it made the agreements not to cold call employees at Apple, Intel and Intuit in order to maintain a good relationship with the companies.
"Our policy only impacted cold calling, and we continued to recruit from these companies through LinkedIn, job fairs, employee referrals, or when candidates approached Google directly," Amy Lambert, Google associate general counsel, wrote in a blog post.
"While there's no evidence that our policy hindered hiring or affected wages, we abandoned our 'no cold calling' policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of this settlement."
In a statement, Intel denied any wrongdoing. "Intel does not believe its actions violated the law nor does the company agree with the allegations," it said. "The company is settling the matter because it believes it would not harm the company nor its ability to do business."
Adobe and Apple did not immediately reply to requests for comment.