DOJ Announces End Of Companies No Poach Consensus
The Department of Justice has reached a settlement with Adobe, Google, Intel, Intuit, Apple and Pixar that prevents the companies from entering "no-poach" agreements for each other's employees.
For years, these companies have had either implicit or implied agreements regarding the recruitment of their employees. Generally, these were policies of the "if you don't poach my employees, I won't poach yours" variety. Last year, though, the Washington Post reported on an investigation by the Department of Justice (DoJ) into whether these agreements violated U.S. antitrust laws.
Today, the DoJ made it clear these companies have indeed been entering anticompetitive employee solicitation agreements, and that the government won't tolerate such actions. The result is a settlement of a civil antitrust complaint filed today; this settlement bars six of tech's most prominent companies from entering in these types of agreements, especially ones that ban "cold calling."
"In the high technology sector, there is a strong demand for employees with advanced or specialized skills," the DoJ said in its announcement. "One of the principal means by which high tech companies recruit these types of employees is to solicit them directly from other companies in a process referred to as 'cold calling.' This form of competition, when unrestrained, results in better career opportunities."
In its announcement, the Department of Justice outlined five key agreements between Apple, Adobe, Google (Google), Intuit, Intel and Pixar that violated antitrust laws. Some of the agreements aren't any surprise (Apple-Pixar), while there are others we never expected (Apple-Adobe).
Apple-Google: These two companies had an agreement not to cold-call each other's employees starting in 2006. Apple employees were directed not to solicit employees from Google and vice-versa.
Apple-Adobe: Surprisingly, these two rivals had an agreement starting in May 2005 not to make cold calls.
Apple-Pixar: This is no surprise, as Apple CEO Steve Jobs was the CEO of Pixar before Disney acquired it in 2006.
Google-Intel: They had an agreement similar to the Apple-Google agreement.
Google-Intuit: Executives from both companies also agreed on a "do not cold call" policy.
Since the DoJ's announcement, Google has issued its own statement, stating that it ended its "no cold call" policies in 2009, some time after the Justice Department's investigation began.
While the deals made sense for all of these companies, it definitely teeters on the edge of anticompetitive agreements. It's good to know that this issue has been put to rest, although we're pretty sure Google is far more concerned about Facebook poaching its employees these days.
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