Newly released emails implicate Apple, Intel and Google in 'no poaching' deals
By Graeme Burton
23 Jan 2013
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New documents have been filed in court showing how a number of big, Silicon Valley-based companies operated an informal "no poaching" agreement to prevent them from taking each other's staff. The agreement, which contravened anti-competition laws, would have enabled the companies to hold down wages and to restrict opportunities for their staff.
It also shows how Apple, in particular, sought to use the threat of litigation over intellectual property to bring other companies to heel.
The revelation follows a statement made by former Palm CEO Edward Colligan that Apple CEO Steve Jobs made a veiled threat to sue the company for patent infringement if Palm would not agree to stop hiring Apple staff.
In an email to Colligan, Jobs wrote, "I'm sure you realise the asymmetry in the financial resources of our respective companies... just for the record, when Siemens sold their handset business to BenQ they didn't sell them their essential patents, but rather just gave them a licence. The patents they did sell to BenQ [which Palm subsequently purchased] are not that great... My advice is to take a look at our patent portfolio before you make a final decision here [over patent litigation]."
Apple's actions against Palm's hiring practices go back to August 2007, according to Colligan's statement. He claims that Jobs proposed a no-hire agreement between the two companies after Palm started hiring staff to develop its new operating system and mobile devices.
Jobs also sent direct emails to Schmidt asking him to stop Google "relentlessly recruiting" Apple staff. The emails, though, also implicate the former Google CEO Schmidt in the agreement. In one email, he writes, "I don't want to create a paper trail over which we can be sued later".
Intel CEO Paul Otellini is also implicated. Indeed, an internal email sent by Otellini, states, "We have nothing signed. We have a handshake 'no recruit' [agreement] between Eric [Schmidt] and myself. I would not like this broadly known".
In addition to Apple and Adobe, Intuit and Pixar have also been implicated.
In 2012, the Justice Department and California state antitrust regulators sued eBay over an alleged no-poaching deal with Intuit. eBay has filed for the case to be thrown out, arguing that antitrust law "does not exist to micromanage the interaction between the officers and directors of a public company".
It also faces a civil action that could see it pay out hundreds of millions of dollars in damages to employees who claim that they were adversely affected by the tacit agreements made between the top managers of Silicon Valley technology companies.