High Tech Firms Settle No-Poaching Case

Six leading high-tech companies have agreed to settle an antitrust claim arising from an arrangement among them not to poach each other’s employees.

The U.S. Department of Justice announced the settlement in Washington a few hours ago and simultaneously filed a civil antitrust action. Brought against Adobe Systems, Apple, Google, Intel, Intuit, and Pixar, the lawsuit details the alleged hiring arrangements. Accompanying the civil complaint was a proposed settlement in which the firms agree not to engage in anti-competitive no solicitation agreements.

The DOJ says the settlement “prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees.   The companies will also implement compliance measures tailored to these practices.”

The investigation was launched last year into recruiting collusion among a number of firms, including Google and Apple. The arrangement between the two firms, the Justice Department now says, began “no later” than 2006 when the two companies instructed recruiters not to cold call the other’s employees.

Similar arrangements existed, the Justice Department charged in the suit, among the other four companies. In a press statement the department issued, it said that in addition to the Google-Apple agreement, similar no-poaching agreements existed between Apple and Adobe, Apple and Pixar, Google and Intel and with Intuit.

Google didn’t issue a formal statement. But in a blog post, Amy Lambert, Associate General Counsel, Employment, said the company decided in 2005 not to “cold call employees at a few of our partner 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. In fact, we hired hundreds of employees from the companies involved during this time period.

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“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.”

However, the Justice Department, in its public statement on the settlement, said the recruiting arrangements among the companies “eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities.”

The Associated Press reported that Adobe, Intel, and Intuit  issued statements denying they did anything wrong. Each said they were settling to put an end to the matter. Neither Apple nor Pixar, a company once run by Apple founder and current CEO, Steve Jobs, issued statements.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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