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Silicon Valley wage-fixing and no-poaching practices: business as usual?

A new filing, picked up by Reuters this afternoon, details an email exchange between the late Steve Jobs and then-Google CEO and Apple board member Eric Schmidt, in which Jobs asks Schmidt to keep Google from hiring one of Apple’s engineers.

“I would be very pleased if your recruiting department would stop doing this,” Jobs wrote to Schmidt on March 7, 2007.

According to the exchange detailed in the filing, Schmidt then sent the request on, saying “I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can.”

This resulted in the immediate firing of the recruiter who had attempted to hire the engineer in question, with Google’s staffing director writing back “please extend my apologies as appropriate to Steve Jobs,” and noting that it was “an isolated incident.”

The case (PDF), which seeks class-action status, against Apple, Adobe Systems, Google, Pixar, Intel, and Intuit alleges that a no-poaching agreement was made among each company’s top executives. That suit claims that the companies entered into an unofficial agreement not to hire talent away from one another, while working together to set and control employee compensation.

“…this recent filing includes details of an Apple employee attempting to apply for a position at Pixar and being told that “only problem–we can’t poach from Apple,” from an employee there. In another e-mail exchange between two vice presidents at Google, the pair talk about ways to “never get into bidding wars” on potential talent with Schmidt and longtime Apple board member Bill Campbell being copied in on it.”

What can I say? In addition to things like widespread age discrimination, requirements for W2 forms to be hired, and RAISES being “pro-rated” for the amount of time spent with the company in the previous year (I never experienced “pro-rated raises” before coming to California) the allegations above, if true, would just be more examples of how employers in Silicon Valley collude to control worker wages and benefits and limit their opportunities for movement and advancement. That is before you get to things like abusive treatment on the job.

When politicians ask why more American kids do not pursue careers in engineering, the sciences, and math, you can tell them that talented engineers and Ph.D. scientists may wind up working for college dropouts (even if one of them was my FAVORITE college dropout :-) ) and others who allegedly collude(d) illegally in unfair and illegal business practices.

We shall all have to follow the case and find out if any of the allegations turn out to be true. ;-)

-Bill at

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