When a 'gentleman's agreement' looks like collusion

Recently released Justice Department evidence shows tech firms had 'no-poaching' deals

Sixteen months ago the U.S. Justice Department reached a settlement with six major technology companies accused of engaging in anti-poaching agreements designed to avoid bidding wars for top talent.

None of the six companies -- Apple, Google, Intel, Adobe Systems, Intuit and Walt Disney's Pixar Animation Studios -- had to pay fines or admit wrongdoing.

But these companies (along with Lucasfilm) now are facing separate class-action civil lawsuits from former employees of Lucasfilm, Adobe and Intel, with one of the cases slated to be heard in a San Jose, Calif. court starting next Thursday.

And if the evidence gathered during the DoJ investigation -- released for the first time this week and published by TechCrunch -- is any indication, there was wrongdoing aplenty.

For example, in a 2005 email to Apple CEO Steve Jobs, Adobe CEO Bruce Chizen forwarded a reassuring internal email from Adobe SVP of human resources Theresa Townsley that said:

"Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa. ... Please ensure all your worldwide recruiters know that we are not to solicit any Apple employee. I know that Jerry is soliciting one now, so he'll need to back off."

No wrongdoing or collusion there!

Here's an internal Pixar email from Lori McAdams:

"I just got off the phone with Danielle Lambert, and we agreed that effective now, we'll follow a Gentleman's agreement with Apple that is similar to our Lucasfilm agreement."

Again, no illegal collusion. Just a "gentleman's agreement" between the two plantation owners.

The DoJ document is heavily redacted, which is too bad because it'd be fascinating to read the lengthy blacked-out section on Page 3 that is introduced thusly: "The evidence further shows that Defendants implemented their agreement throughout their respective companies, policed them and punished violations. For example, ..."

An innocent gentleman's agreement, indeed.

Fortunately, the DoJ evidence does show that not every 1%er in Silicon Valley is a "gentleman," at least as defined in this context.

On August 24, 2007, Ed Colligan, then CEO of Palm, Inc., wrote to Mr. Jobs, refusing Mr. Jobs's request to enter an illegal agreement with Apple. Mr. Colligan wrote: "Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal."

I'm sure the intolerant Mr. Jobs had some choice and distinctly ungentlemanly words regarding Mr. Colligan, who deserves a lot of credit for standing up to the Silicon Valley Plantation Cartel.

As I wrote previously, if we truly believe in an unfettered free market and genuine competition, it has to be across the board. Which means companies should compete for top talent, and be willing to pay what the market will bear. Isn't that the American way?

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