Big Silicon Valley Firms Aren't Going To Get Off That Easily For Their Anti-Poaching Agreements

Legal Issues

from the open-up-that-wallet dept

A few months ago, we reported on how Google, Apple, Adobe and Intel had agreed to settle a lawsuit concerning their collusive hiring practices, in which those companies (and a few others that had already settled) agreed not to “poach” employees from each other. As we had noted, these anti-poaching agreements (led by Steve Jobs who pushed them on many other companies) are a really hideous practice that is not only bad for the employees of those companies, but bad for innovation in general. As we’ve detailed, allowing the easy movement of employees between innovative tech companies is a huge part of why Silicon Valley became Silicon Valley. Employees shifting jobs between these companies often helps with greater idea sharing, different perspectives and speeds up innovation and (especially) big breakthroughs. It’s almost an informal “open sourcing” of certain information, in which employees who are job hopping act as conduits of important information moving between companies in an informal manner.

That’s why it’s a very good thing that the practice is being called out and shamed — and hopefully episodes like this can be put in the past. In our comments on the original settlement, however, many people pointed out that the $324 million actually seemed a little “light” given the number of employees involved. It would appear that Judge Lucy Koh agrees, and has rejected the settlement agreement as being too low, saying that the companies should try again with a higher number, starting at a minimum of $380 million.

The ruling also includes more details of how these agreements got started, showing Steve Jobs basically bullying lots of other CEOs — and demonstrating just how scared everyone was of Jobs. They all seemed to fear going against him and having him declare “war” on them and going after their employees. Either way, it looks like the companies are going to have to cough up more money — and hopefully this (again) means that this kind of anti-poaching practice is ended. Hopefully, these companies stop thinking just about how employees leaving hurt themselves, but about how they too can benefit from inbound employees.

In fact, there’s a new book by Reid Hoffman, Ben Casnocha and Chris Yeh, called The Alliance, which, among other things, recommends that companies get much better about learning (1) how to let employees leave when it’s in those employees’ best interests and (2) how to keep a strong “alumni” network, recognizing that can benefit them in the long run. Hopefully the ideas like that, as well as all of the evidence on the importance of job shifting for enabling innovation, will mean these kinds of practices go away. I’m sure a bigger payout due to the lawsuit won’t hurt either.

Filed Under: anti-poaching, collusion, innovation, job shifting, non-competes, poaching, settlement, steve jobs
Companies: adobe, apple, google, intel