June 2nd, 2009
Are tech companies agreeing not to steal top execs?
Tom Foremski relates a Deal Pipeline report that the Justice Dept. is looking into collusion among the big tech companies not to poach each others’ top employees.
[DOJ] has sent letters to at least a dozen major computer hardware and software companies. Google Inc., Yahoo! Inc. and Apple Inc. are believed to be among the recipients, as is at least biotechnology firm, Genetech Inc.
. . .The letters suggest that antitrust division lawyers suspect that some of the targeted companies have agreed not to poach each others’ employees. Such an agreement, if DOJ lawyers can prove it exists, could be a violation of the nation’s oldest antitrust law, the Sherman Act of 1890, which prohibits agreements among competitors that result in restraint of trade.
The last big scuffle in this area was Apple’s hiring of IBM exec Mark Papermaster to head iPhone hardware development. The matter was settled in January.
DOJ scrutiny of Google is all well and good, Tom says, but this seems like “clutching at straws.” Hardly. The natural state of competitors is to strive to have the best people. If companies are passing on the opportunity to get the best, to avoid lawsuits, aren’t consumers being hurt? If so, we may well have (civilly) illegal cooperation.
