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Suit accuses Silicon Valley companies of anti-recruiting conspiracy

In Silicon Valley's white-hot competition for tech talent, programmers can face a daily barrage of calls from recruiters seeking to woo them to rival companies.

But workers for some of the biggest names in the business claim their phones fell silent because of a conspiracy among their employers.

A lawsuit filed in federal court in San Jose claims senior executives at Google Inc., Intel Corp., Adobe Systems, Intuit Inc., Lucasfilm Ltd., Pixar and Apple Inc. violated antitrust laws by entering into secret anti-poaching agreements not to hire each other's best workers.

The plaintiffs also claim that company emails show Steve Jobs sought and orchestrated at least some of the so-called "gentlemen's agreements" while he was Apple's CEO.

"I believe we have a policy of no recruiting from Apple," then-Google chief executive Eric Schmidt wrote in a 2007 email cited by the plaintiffs.

The email was originally furnished to the U.S. Justice Department, which investigated similar allegations in 2010. The same email included a forwarded message from Jobs complaining that Google recruiters were trying to lure away an Apple engineer.

"Can you get this stopped and let me know why this is happening?" Schmidt wrote. Google's director of staffing replied that the recruiter "will be terminated within the hour."

The companies' attorneys said the facts even as presented by the plaintiffs show no evidence of a conspiracy. Rather, they said that some companies had separate pacts among themselves.

When the two sides squared off Thursday in U.S. District Court in San Jose, Apple defense attorney George Riley told Judge Lucy Koh that such arrangements were common.

The case hinges on a practice described in court documents as "cold-calling." Under the practice, recruiters from one company call an employee at another company who has the skills the company needs. The practice can lead to bidding wars as workers play the companies off each other to get the highest pay.

Cold-calling, the suit contends, helps workers get a sense of what they're worth in a free market. When the cold-calling stops, the suit says, workers lose the knowledge and the leverage they could otherwise use to demand higher pay.

The Justice Department's 2010 investigation included the same companies except Lucasfilm, and the plaintiffs in some ways mimic the language from the department's original case. The companies settled the earlier case without admitting any wrongdoing but agreed not to enter into future agreements preventing cold-calling.

Because the Justice Department's case was settled quietly without any public dispute, court records contain little detail.

But some details came to light in a recent filing by the plaintiffs, which quotes emails they obtained from the companies that had previously been given to the Justice Department.

In a 2005 email describing a purported agreement between former Adobe CEO Bruce Chizen and Jobs, an Adobe human resources executive wrote: "Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa," according to court documents.

In 2007, then-Palm Inc. CEO Ed Colligan wrote to Jobs: "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," the plaintiffs' filing said.

Defense attorneys contend the emails are being distorted by the plaintiffs and show nothing beyond legitimate one-to-one agreements. Apple declined to comment.