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Anti-Poaching Agreements May Implicate Several Tech Titans
Originally published on Mon April 21, 2014 7:26 pm
MELISSA BLOCK, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
AUDIE CORNISH, HOST:
And I'm Audie Cornish. A court case in Silicon Valley has brought some juicy emails to light. The correspondence involved some of the valley's biggest stars including the late Apple founder and CEO, Steve Jobs. Apple, Google, Intel and Adobe are accused in a class action suit of suppressing the wages of their developers and engineers.
The plaintiffs, all 64,000, say the companies did that by agreeing not to poach each other's employees. NPR's Laura Sydell is covering the case. Welcome, Laura.
LAURA SYDELL, BYLINE: Hello.
CORNISH: So explain a little bit more. How were these companies allegedly trying to keep their employees down?
SYDELL: Well, allegedly Apple, Intel, Google, Adobe agreed not to recruit each other's engineers and here in Silicon Valley, there is a lot of competition or top engineering talent so these companies said, well, we're going to quietly agree not to poach from each other.
CORNISH: And why is it illegal, though, to make an agreement like that with your competitors not to recruit?
SYDELL: OK. So if you think someone might make a better offer to your employees, you're going to treat them better, right? So if an Apple employees goes to her boss and she says, hey, you know, Google just made me an offer for 10,000 more dollars than you guys pay and if you want to keep that employee, right, you're going to pay her more. And it'll ultimately raise not only her wages, but then the whole group starts to look and see, oh, that person's making, you know, whatever it is, $150,000 a year. I'm making $140,000. I want to get paid more. And so if you don't compete for engineers, it brings their wages down.
CORNISH: So Laura, in the filings, there's some evidence against these companies that surface in the form of emails. Tell us a little bit more about them.
SYDELL: Oh, yes. And some of them show a lot of personality on Mr. Jobs' part. So there was an email that he wrote after Google tried to recruit one of his engineers and he wrote to Eric Schmidt, then CEO of Google, and he said, I would be very please if your recruiting department would stop doing this. And Mr. Schmidt forwarded that email to various recipients and he said, I believe we have a policy of no recruiting from Apple and this is a direct inbound request for Mr. Jobs. Can you get this stopped? And let me know why this is happening.
He got an email back from the recruiting department which basically said, extend my apologies as appropriate to Mr. Jobs. That was an isolated incident and we'll be very careful to make sure it doesn't happen. And went on to say they would, in fact, terminate the employee who made the call right away.
They did terminate that employee and basically were told by the president for business operations that was the appropriate response. Thank you. Please make a public example of this termination with the group. When Mr. Jobs was forwarded an email that showed that employee was fired, he forwarded that on with a smiley face.
CORNISH: All right. Well, given this kind of evidence, what has Google, Apple and other companies said in their defense?
SYDELL: They say these emails are being taken out of context. It is legal to agree when two companies are working on a project together, for example, if Google and Apple were working on maps together and their engineers come together, it is perfectly legal to say, hey, while we're working together, you can't try and recruit one of the engineers that's working on this project. So that's legal and they're saying that's what this was about.
CORNISH: What's at stake here?
SYDELL: What's at stake here are billions of dollars. So the plaintiffs are seeking $3 billion. That's an amount that could be tripled if it goes to trial and the jury decides to award damages. So we're talking a lot of money and, of course, a lot of evidence that could come out that makes various executives of these companies not look very good.
CORNISH: That's NPR's Laura Sydell. Laura, thank you.
SYDELL: You're welcome. Transcript provided by NPR, Copyright NPR.