Google's anti-poaching smoking gun
Back in June, before the ties that bound the two companies unraveled and Google's (GOOG) Eric Schmidt resigned from Apple's (AAPL) board of directors, the New York Times reported that the U.S. Department of Justice had begun an antitrust investigation into the two companies' hiring practices.
The issue was whether Apple and Google had made an anti-poaching deal — an agreement not to go fishing each others' talent pool — that could be considered a collusive restraint on trade.
The Times had obtained an e-mail from a Google recruiter that was very suggestive. It asked one job candidate to reach out to another potential candidate.
"It is a bit touchy since he works for Apple,” the recruiter wrote, adding that Google had “a nonsolicit agreement with them.”
But the authenticity of the e-mail could not be verified and the recruiter, who has since left Google, said she didn't recall sending it.
Now we have what looks like a smoking gun.
It comes from TechCrunch's MG Siegler, who published an item Friday speculating that any deal they had may be off now that Schmidt has left the board.
After Siegler posted the piece, a source forwarded him the following e-mail, which Siegler has stripped of identifying details:
From: XXXXX XXXXX <XXXXX@google.com>
Date: XXXXXXX XX, 2008 X:XX:XX AM PDT
Subject: Re: Google Opportunities- Follow up email…Thanks for getting back to me. I don’t believe that we have been in
contact previously – apologies if I am wrong about this.From your reference to the [APPLE DIVISION], I take it that you are
currently working there. If this is the case, we will not be able to
proceed with your application. Google has an agreement with Apple
that we will not cold call their staff. If you are not currently
working at Apple and are interested in learning more about [A GOOGLE DIVISION]
please let me know and I would be happy to chat with you.Thank you again for returning my email.
The e-mail not only states explicitly that Apple and Google had such an arrangement, but it spells out the rules: an Apple employee could call Google looking for employment, but Google couldn't initiate the call.
According to Gary Reback, a lawyer who helped persuade the Justice Department to pursue its 1998 antitrust case against Microsoft (MSFT), companies are generally free to choose not to recruit from their business partners. But a written agreement between two firms to steer clear of each others’ employees could raise questions.
“It is not the off-limits part that I suspect they are looking into,” Mr. Reback told the Times back in June. “I suspect they think there is a quid pro quo of some kind. Antitrust counselors would advise clients not to do this kind of thing.”
See also:
Screw em both, Non poach agreements are non competitive practices that need to abolished. Why? Non poaching agreements are used to intimidate employees by effectively locking them out of an industry because you have to quit your job to find another one.
Look even non competes have severe limitations for this reason (aka:valid business reason, limited scope and limited duration). In several states non competes are illegal unless you are selling a business.
To top it off non-poaching agreements are even more insidious since they are often under the table and the employee finds out about them the hard way.
Google and the way it does business is a big issue as it sucks money out of industries and does not spend money on the things like reporters and content.
Not to mention google continues to sell its self as a start up or .com like company to potential hires when its nothing more than a bloated company use to burning money at a high rate and solving its money burn with gimicky little products to generate hype and temporary income to keep feeding the money burn.
"yawn" – ben ny.
This appears to be due to a markedly regressive case of Mens' Room Onanism Syndrome (MROS). Typically the sufferer, out of exhausted frustration, falls asleep on the crapper, then forgets to dive for their remote before flipping the lever. In severe cases subjects have been known to recollect visits to certain web sites while Google SafeSearch was set to "Off", triggering an endless recurrence of the symptoms. Stunting of the intellect, such as it was, is often the final outcome.
Note that there is no known cure, which is probably just as well.
It's high time Google was forced to divest some divisions. This is not the only area that it may bump into Restraint of Trade. Big bad techno-bullies are bad for tech and bad for the country.
"While it sounds like a fair practice, it gets bad when there the agreement also implements a no-hire deal for x number of months after the employee has quit the company." — Hyd
This last may be what is referred to as "garden leave", whereby an employee is contractually bound not to work for a competitor for some months after leaving employment. I believe it is a long-standing practice in the U.K. but also may be coming into play here as well. Typically the party is still an "employee" in that they are paid to stay home. They also, of course, get behind the curve as to what the company they are leaving is up to, especially if it is of a technical nature.
Note that the agreement is between the employee and the employer, not between competitors. I don't believe this practice applies in this case.
I find it amusing that after banks and oil companies waltz to the anti-trust tango, oblivious to the law, the FCC is so concerned about these two. Comparing the financial advantage that the aforementioned groups have and cost to the public, this is very amusing.
@cynik
This isn't something new for Apple and Google. They have always been "imbued with" corporate culture. Just because their vociferous fans blind themselves to the reality of market collusion and corporate corruption does not make it invisible or non-existent (Have you forgotten Jobs's self-appointed bonus?).
Try out some Free Software if you want to do something "radical" otherwise consider yourself a complicitor –since Apple, Google, MS, GM, IBM is all the same.
Seriously, if anyone reading this article didn't think that it was common place for recruiters to have "special arrangements" with clients that significantly contribute to their bottom line – Well then you are just living in a fantasy world.
This non-compete/anti-trust/no-hire abuse is rampant in the video game industry in Northern California.
I find this story indicative of the way both Google and Apple have become bloated corporate leviathans.
Both these companies grew and prospered because people who wanted to do new and radical things with new, unknown firms used their energy and ideas to make these new things happen.
And now they are so imbued with the "corporate culture" that they have to poach staff from one another, because their HR "experts" have decided to drink the corporate kool aid. Ergo, if you don't already work for a massive corporation, you are not good enough to work for a massive corporation.
So they end up hiring the kind of people who "fit in" inside large corporations: Yes men and grey men, people who are too frightened to speak their minds and too dull to irritate the ego maniacs who run the corporations.
This seems to be the standard pattern for corporations: start new and radical and vibrant, and then turn dull and bloated and full of HR experts who would be right at home as members of a political party.
Google have become a nasty parody of themselves, in this respect. They enforce the culture of individualism with an iron fist. If you don't believe in the individualism of Google employees, you can GET OUT.
I figure it is only a matter of time, with Apple, before they go the same way as microsoft and google: bloated and stultified with insipid university graduates who are expert at getting jobs with large corporations, but who know and care nothing about solving problems in the marketplace.
Bring on the new and radical companies full of creative people who don't care if they belong to small firm that takes risks. That is where the tomorrows value in the market will come from. Just like it did yesterday.
As a recruiter I see this all the time. Not necessarily in writing but a lot of companies have hands off policies. As for cold calls, how else do you think companies like Google, Apple, etc, get a lot of their talent. Knowledgeable, hard working recruiters making a call to help their client, maybe make the candidates life better and hopefully offer a great career. It ALL starts with a cold call
Companies in India do this all the time. They have explicit agreements not to "poach" from each other's talent pool. While it sounds like a fair practice, it gets bad when there the agreement also implements a no-hire deal for x number of months after the employee has quit the company.
@Douglas…
Cold calling is rude? I bet you would not think the same if they cold called someone from Oracle, or Microsoft, hmmm?
I bet it must hurt to see your favorite fruity computer company being exposed for what they are. 
…and techcrunch with their tablet coming out, couldn't possibly want to hurt Apple in any way? Nah. Thought not.
Uh, oh.
Upshot is, it looks as though the Googleteer emailed the Appleteer in re the latter's job application, but in ignorance of the "Appleteer" attribute until the Appleteer emailed back. And this leads to the revelation of "an agreement".
Nor is there any suggestion of an actual "cold call" being made except perhaps by the applicant, nor any suggestion that an employee of one company was prohibited from applying to the other. Appears the Googleteer was playing it extra safe, and let the old kitty out of the bag in the process.
Next question is: was the "agreement" written, or was it the gentlemen's variety? Not a lot of difference, but subtle all the same, if Jobsie and Smitty were just trying to be nice-nice rather than hardball "trusting".
Sorry, but I don't think this email constitutes a smoking gun. Cold calling is just plain rude. So they agreed not to be rude. Big deal.
Free Market Mechanics only serve certain people. This is proof. If the market forces where in play many of these people would make a lot more money. This hurts every employee and the practice should be stopped, its a form of servitude.