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Apple and Google Face Salary-Fixing Lawsuit 402

Posted by timothy
from the only-legal-when-the-government-does-it dept.
beaverdownunder writes "Google, Apple, Adobe and Intel have been accused of maintaining an agreement not to poach each other's staff, thus restricting increases in salary and restricting career development. California District Judge Lucy Koh has found that the plaintiffs have adequately demonstrated antitrust injury. Sparked by a request from the late Steve Jobs, from 2005 to 2007 the defendants had a 'no cold-call' policy of staff recruitment amongst themselves. Jobs is also alleged to have threatened Palm with litigation for not entering into a 'no cold-call' agreement with Apple." Besides the companies named above, Intuit, Pixar, and Lucasfilm are also involved.
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Apple and Google Face Salary-Fixing Lawsuit

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  • by Surt (22457) on Sunday April 22, 2012 @10:30AM (#39762867) Homepage Journal

    Seriously, it doesn't get much more clearly evil. I think they've effectively ruined their corporate image with this.

  • by WrongSizeGlass (838941) on Sunday April 22, 2012 @10:35AM (#39762895)

    Seriously, it doesn't get much more clearly evil.

    Do a little checking into Sony before you deem this the pinnacle of evil.

    I think they've effectively ruined their corporate image with this.

    Oh please. Both of these companies have done much worse. Most customers aren't going to care all that much if some high-priced high-tech employees didn't get to leverage one company against another for a job.

    What they did was wrong - all of them (there were others besides Apple & Google), and this will be another ethics wakeup call to corporate America ... until the next scheme crosses one of their minds.

  • by TheRaven64 (641858) on Sunday April 22, 2012 @10:42AM (#39762951) Journal
    Seriously? This is the most evil thing Apple or Google has done? Let me guess, you're looking for a job in Silicon Valley...
  • by Anonymous Coward on Sunday April 22, 2012 @10:44AM (#39762967)

    Seriously, it doesn't get much more clearly evil. I think they've effectively ruined their corporate image with this.

    I assume you were just being a little overzealous this morning (assuming you are in the US), but that is so wrong that I doubt even you really believe it. Whether you want to compare this no-poaching agreement with FoxConn or with the even more evil period of slavery in our country, there are probably numerous example every day of companies being more "evil" than this.

    That said, I hope they are penalized harshly for this, and not just in the court of public opinion. Because as someone else already said, I really doubt that almost anyone cares about some 6-digit salary tech employees not getting even higher pay.

  • by Anonymous Coward on Sunday April 22, 2012 @10:53AM (#39763059)

    "it doesn't get much more clearly evil"

    "it's not the height of evil, that wasn't my claim. "

    You'll forgive people for thinking you meant "it doesn't get much more clearly evil" when you wrote "it doesn't get much more clearly evil".

  • by Anonymous Coward on Sunday April 22, 2012 @11:04AM (#39763161)

    Basically Sony treats consumers bad, while Google and Apple their own people. May be just me, but the latter is much worse.

  • by Luthair (847766) on Sunday April 22, 2012 @11:05AM (#39763171)

    The seven companies were also investigated in this connection by the U.S. Department of Justice, and they settled in 2010 while admitting no wrongdoing, but agreed not to ban cold calling and not to enter into any agreements that prevent competition for employees.

    Is anyone else sick of seeing this type of solution? Bank robbers aren't allowed to go free if they don't admit wrong doing but promise not to rob anymore banks in the future. There is no disincentive if the companies (and the people making these agreements) aren't punished for their behaviour.

  • Re:Cold calls? (Score:2, Insightful)

    by mysidia (191772) on Sunday April 22, 2012 @11:15AM (#39763245)

    Any recruiter who wants to call me right now for a 33% pay raise to work at a premier tech company will never piss me off, even if I don't take his offer. And I am very content with my current gig. --

    A team member who lacks loyalty, or lacks job satisfaction may take the opportunity to switch employers. A more loyal team member, may take this offer and negotiate higher pay with their current employer. Either way, the employee benefits. This is not against the economic interests of the employee. In some circumstances, this may be unfair to the employer. With employment there is an implied understanding that there is a long-term relationship, and the employee will not part for something as low as a 30% change in pay, and nor will the employer necessarily fire the employee just because they found someone willing and able to do the same job for 30% less.

    However, it would be best if the employer spelled that out with a contract. It would probably be best if such enterprises had their employees sign a "non-compete" for the industry their organization is in, effective in case the employee voluntarily chose to leave, and with a small salary continuing for the non-compete period to secure the employee from being hired by a competitor during that period. This is more fair to both employer and employee -- the employee cannot be poached, unless the employee is fired without cause; if the employee is released with cause, or chooses to leave the business, they continue to be paid a sustaining wage. The competitor can offer the 33% increase after the 2 or 3 year period.

    You get a call about once a week from someone offering you significantly more money to come work for them ... and you are pissed about it?

    I wouldn't be pissed about it. If someone is paying me to do the other job during the time I am taking the call, that the call is distracting me from, however, and the caller uses my employer's equipment to make that offer (e.g. Company phone number, Company e-mail address), they might have a right to be pissed about it, because:
    (A) They are likely doing this to many employees -- wasting many employer hours.
    (B) They are a third party abusing the employer's communications equipment.
    (C) The nature of the calls is likely to result in loss of increased employee costs; either in the form of increased pay to existing employees, or to pay for recruitment of new employees and training to enable existing staff to cover the hole left by valuable team member.
    (D) Increased churn, corporate brain drain, loss of company memory, lower morale.

  • by Sancho (17056) * on Sunday April 22, 2012 @11:23AM (#39763313) Homepage

    A few nits to pick.

    Google didn't claim to not be evil. They approve an internal motto of "don't be evil" which is far from the same thing. The motto got leaked and they've been paying for it ever since, because nearly any action could be seen as evil by someone.

  • by Anonymous Coward on Sunday April 22, 2012 @11:28AM (#39763355)

    ...of what a truly despicable person Steve Jobs was.

  • by XiaoMing (1574363) on Sunday April 22, 2012 @11:54AM (#39763597)

    A giant "anti-trust" lawsuit regarding only a "no cold-call" policy? This is the stupidest thing I've ever heard.

    All that means is that when someone is happily working at the job they actually applied for, they wouldn't be teased by some other company offering them more money.
    It says NOTHING about if an employee was fired, and once again applied for a job at a competitor, whether they would take him/her or not (which would most likely be a resounding yes).
    Nor does it imply anything in the situation where an employee was working at their job, but (knowing they themselves are hot shit) applied to another company flouting their skills, and trying to negotiate a higher pay.

    Honestly, the fact that it "fixed salaries" only means that tech companies were such dicks about poaching in the first place, with absolutely no regard to the culture of the workplace that they not only suck an employee out of due to greed (think about those left behind), as well as the company's own culture (hiring a competitor who is there out of greed). They probably realized it was bad practice for a lot of reasons other than just the indirect effect of money.
    Finally, I can easily imagine a company with a lot of spare cash (Apple) using this method to hire ever good engineer out of every other company just for shits, having them not develop anything, and crush the competition in that manner.

  • by ATMAvatar (648864) on Sunday April 22, 2012 @12:45PM (#39763999) Journal
    Since incorporation means that you obligate yourself to the pursuit of profit over all else, it is not much of a stretch to say it also effectively obligates you to evil. More often than not, the road to more profit is the road which ignores ethics and law. This might be less true if we had anything resembling effective justice for companies which are caught breaking the law and social standards.
  • by walterbyrd (182728) on Sunday April 22, 2012 @12:49PM (#39764033)

    It's been going on for a long time.

    There was Section 1706 of the 1986 Tax Reform Act. Just recently there was a bill before congress to eliminate overtime for IT employees. Nobody else, just IT employees.

    The entire H-1B visa workers scam was manufactured to bash tech employees.

    The reason that techies are so easy to stomp, is that techies are not organized. Accountants, lawyers, doctors, nurses, teachers, and so on, are organized, and they can protect themselves (to some extent) against conspiring employers. Techies will never learn.

  • Re:Cold calls? (Score:5, Insightful)

    by Rakishi (759894) on Sunday April 22, 2012 @01:00PM (#39764153)

    Are you clinically delusional or just stupid?

    With employment there is an implied understanding that there is a long-term relationship,

    No there isn't, employers will lay you off in a heartbeat if it's in their interest. They'll provide no raises and pay new hires 20% more. They'll do everything they can to pay you as little as possible.

    The possibility of you leaving is what keep them inline, if they know you won't leave then they'll fuck you up the ass till you need wear an adult diaper. It's called capitalism and supply and demand. Look it up sometime.

    I've been treated rather well by my employers and that's because they knew I could leave and find a new job within a week for probably more pay. I also know many people who don't have that luxury and they did not get the same treatment as me.

    and the employee will not part for something as low as a 30% change in pay, and nor will the employer necessarily fire the employee just because they found someone willing and able to do the same job for 30% less.

    30% is considered low for you? What are you smoking. In most places that's around 10 years worth of experience at least and there's no way in hell you'll get a raise like that from your employer. That's an extra 30k per year in decent IT jobs.

    However, it would be best if the employer spelled that out with a contract. It would probably be best if such enterprises had their employees sign a "non-compete" for the industry their organization is in, effective in case the employee voluntarily chose to leave, and with a small salary continuing for the non-compete period to secure the employee from being hired by a competitor during that period. This is more fair to both employer and employee -- the employee cannot be poached, unless the employee is fired without cause; if the employee is released with cause, or chooses to leave the business, they continue to be paid a sustaining wage. The competitor can offer the 33% increase after the 2 or 3 year period.

    Yeah, great idea. Hire people for pennies on the dollar during a recession and then lock them in even when the economy recovers. *rolls eyes*

    Some companies love people like you, so easy to underpay you and make you their bitch.

  • by Anonymous Coward on Sunday April 22, 2012 @01:09PM (#39764245)

    You sound like a principled person who has well thought out reasons for taking positions. I can respect that, even though I think most of those beliefs are dead wrong as far as running a fair and just society go. For example, the only competition anti-union policies encourage is workers with each other in a race to the bottom. It reduces bargaining power of workers in an already clearly imperfect market.

    Conservatives tend to paint all regulation with the same brush too, when there are clearly multiple types. Again, not about competition at all in the real world. Regulation tends to be about many things, like harassing and controlling people with drinking age rules, drug prohibition, and other things used to intimidate and imprison people but which don't really affect corporations all that much other than to provide new markets that wouldn't (and shouldn't) exist-- looking at you, private prison industry. These things are pretty much never the targets of people who rail against intrusive regulation, even though harassment by unaccountable police is about as intrusive as you can get.

    Then there's the kind that actually protects or informs people, like ingredient labeling rules, our pitifully weak meat inspections, laws attempting to make polluters accountable for the costs they dump on society, etc. Corporations tend to really hate these, which is why they're always what gets targeted in alleged regulatory reform.

    Finally, there's the bought and paid for regulation that's intended to legitimize practices or decrease competition. I call these "briar patch" rules, as in "please dont throw me in", because they're great at screaming about them but they secretly want them. These tend to be licensing laws, things like cable and phone franchise rules, and other things that make costs so high that only an existing well financed corporation can do whatever is required, and entrepeneurs need not apply.

    Oh, and the outrage over the bank bailouts was largely because it was painted (partially incorrectly) as Obama's doing. The Tea Party is for the most part a corporate funded AstroTurf movement created largely to oppose anything Obama does regardless of and without analysis of merit ("keep your government hands off my Medicare"). It didn't start that way, but it was co-opted by a well funded PR campaign.

    My point is that you may be a principled conservative, but you really need to wake up and figure out that in a practical sense, principles of any kind really have little place in modern conservative policies.

  • by whisper_jeff (680366) on Sunday April 22, 2012 @01:23PM (#39764353)

    Seriously, it doesn't get much more clearly evil.

    Ok, seriously, I'm not defending what they did but "evil"? Really? Come on! Can we please get some sense of perspective. What they did was wrong. What they did was possibly morally unethical. But evil? No. Evil is reserved for a special breed of person/organization/action. What they did was not evil. All you're doing by branding them "evil" is utterly watering down the meaning of the word and completely weakening your stance.

    Seriously.

  • by realityimpaired (1668397) on Sunday April 22, 2012 @01:46PM (#39764559)

    You're reading it as: Seriously, it doesn't get much more clearly evil. This reading implies that it's the pinnacle of the state of being "clearly evil".

    He's reading it as: Seriously, it doesn't get much more clearly evil. This reading implies that it is difficult to be more obviously "evil". Reading it this way leaves headroom for there to be more evil, but suggests that this is far enough beyond the line distinguishing evil from not evil that it doesn't make much of a difference in spotting it.

    See the difference? It's a question of which is modifying which, and both readings are correct. Bad choice of words, perhaps, but having a big long argument and flamewar over two perfectly valid readings of the same sentence seems rather pointless and pedantic. Isn't the English language wonderful?

  • Re:Cold calls? (Score:2, Insightful)

    by Rakishi (759894) on Sunday April 22, 2012 @02:07PM (#39764745)

    Yes but in a way it is the fear (and cost) of losing that valuable employee that keeps a company inline. The contract, the research and so on and so on. Replacing any employee is expensive but that doesn't mean, for example, they won't underpay them as much as possible if they can. Companies know that it's also expensive for an employee to switch jobs and they will happily take advantage of that.

    I've been through four rounds of layoffs at two companies, one thing I've learned is that no one is safe. If it's between digging a bit into the massive liquid assets and firing 20% of the workforce, companies will pick the second almost every single time. It'd be stupid for the company to do anything else and I don't fault them for it.

    In IT it's actually even weirder than that since almost no one is promoted. Companies often hire people from outside instead of promoting from within and so you are expected to find a new job if you want a promotion. Which makes perfect sense in a way, you need new blood since otherwise it's too likely that you'll fall behind the industry. Cross-pollination of ideas and all that.

    I don't actually see any of this as that cutthroat, if my employer is truly out to maximize every penny at my expense I won't work for them because that's pure masochism. You can't forget that your boss and their boss and so on are still people. That said you also can't forget that they are businessman whose goal is to make the company money. If you turn yourself into a carpet then don't be surprised if they walk all over you.

  • by excelsior_gr (969383) on Sunday April 22, 2012 @05:39PM (#39766137)

    From the company's perspective, they would hardly get anything done if their key staff members were switching sides all the time. From my point of view the "no cold-call" agreement makes sense. I would even go further saying that this should be a general law. If I own a small business, I would hate some big company throwing its money around at my employees, tempting them all the time. If they want to leave my company, in search for greener pa$tures, it should be THEIR initiative, not because someone planted the idea in their mind out of thin air. And I don't see how this freezes salaries and/or hinders employee development. If someone in my staff is unhappy with his job, THEY can call my competitors and ask for a job offer. They can then come to me with that offer and ask me to top it or otherwise make changes so that they stay. But having the other firms sniffing around all the time is just annoying.

It's a naive, domestic operating system without any breeding, but I think you'll be amused by its presumption.

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