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Silicon Valley Anti-Poaching Cartel Went Beyond a Few Tech Firms 137

Posted by timothy
from the say-clancy-why-don't-you-drop-by-the-club dept.
The gentleman's agreement that several Silicon Valley firms are now widely known to have taken part in to minimize employee poaching within their own circles went much further than has been generally reported, according to a report at PandoDaily. The article lists many other companies besides the handful that have been previously named as taking part in the scheme to prevent recruiting, and gives some insight into what kind of (even non-tech) organizations and practices are involved.
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Silicon Valley Anti-Poaching Cartel Went Beyond a Few Tech Firms

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  • by Herkum01 (592704) on Sunday March 23, 2014 @03:57PM (#46558783)

    So, can look forward to anyone doing jail time? That is the really the only way this will stop. That or directly start suing the individuals who implemented the policies and make them pay. After that I am willing to bet once a few executives lose their hard won millions will be a little gun shy about conspiring to do anything.

    Actually the more I think about it, the best way to reign these practices in is directly suing individuals. Once they can no longer hide behind the corporate veil, the less inclined they will be collude together.

    • is it illegal? (Score:5, Interesting)

      by globaljustin (574257) <justinglobal AT gmail DOT com> on Sunday March 23, 2014 @04:01PM (#46558799) Homepage Journal

      Is it illegal to make these "agreements"?

      I think it's ridiculous, and like another pointed out, shows a flaw in capitalism.

      It *should* be illegal. IMHO it's an anti-trust issue. Workers are vendors of their labor, and the owners of the capital are colluding, like a 'trust', to monopolize & unnaturally control the scarcity of that capital.

      • Your HO is not important.

        Anti-trust was setup up to protect the free market for businesses.

        The only Labour anti-trust you are going to find is anti-union sentiment.

        HO HO HO
      • It obviously restrains free trade of services by employees and vendors. It probably violates federal law and many state laws but maybe not in every state. Watch out for a class action suit that may be a wolf in sheep's clothing that works to the benefit of the criminals. Individual suits would be better for almost all workers.
        • It obviously restrains free trade of services by employees and vendors.

          Why? It's not saying any employee cannot switch companies. Just that one company agrees not to ASK an employee to switch.

          Again, anyone is free to seek work elsewhere with whoever they like.

      • by metlin (258108)

        I think there may be two elements to it -- one is the criminal aspect (i.e. it is illegal) and the other is the civil (i.e. it has other consequences that could result in a civil class action lawsuit).

        Ultimately, I think that even if it is not illegal per se, the affected employees could still file for a civil suit citing any number of reasons. Now will that happen? Probably not.

      • The test for weather something is good for capitalism or not is "Does it increase or reduce transparency in the marketplace" If it increases it, then it's good. If it decreases it, then it's bad. Clearly these agreements reduced transparency and closed off parts of the market to both the workers and even the firms involved. The firms were then able to use this secret blacklist against their employees to reduce the rate at which they increased their compensation. The worker would apply and quickly learn that

      • by nut (19435)

        It is a restraint of trade [wikipedia.org]. If it was built into a contract it would be unenforceable at the least, probably illegal in many jurisdictions, although some restrictions in employment contracts [wikipedia.org] are enforceable provided they are, "reasonable."

        It tells you something that it had to be a gentleman's agreement. I'm sure if they could have legally put it into employment contracts they would have.

        • by mjwalshe (1680392)
          and you have to be PAID for these reasonable restrictions and no just having the job is not payment enough
      • by Bob9113 (14996) on Sunday March 23, 2014 @05:25PM (#46559259) Homepage

        Is it illegal to make these "agreements"?

        Yes, which is why the DoJ is already well on the track to sentencing, and the companies are begging to broker a deal. And what's more, they've got the dirt on one of the originators of the scheme admitting he knew it was probably illegal and trying to cover his tracks (mens rea [wikipedia.org]).

        âoeI would prefer that Omid do it verbally since I donâ(TM)t want to create a paper trail over which we can be sued later? Not sure about this.. thanks Eric [Schmidt]â

        Remember that whenever you hear "Do No Evil" -- that was mostly Sergey, and a little bit Larry. Eric Schmidt hates you and masturbates while thinking of doing evil.

      • by CharlieG (34950)

        Read the article, yes, and the memo was uncovered during an anti-trust investigation for this practice. The memo is a smoking gun

      • by stenvar (2789879)

        Workers are vendors of their labor, and the owners of the capital are colluding, like a 'trust', to monopolize & unnaturally control the scarcity of that capital.

        Your analogy is wrong.

        The "scarce product" here is the labor, and workers own that product. When the owners of that scarce product are colluding to keep its price high, that's called a "labor union". Labor unions and collusion among workers to artificially inflate the price of labor are legal. In fact, in many states, you can be forced to parti

        • by wytcld (179112)

          Your sense of scale is lacking. A corporation with billions of dollars, thousands of employees, and politicians beholden to it offers you a wage to work for it. Your bargaining power is that you might go work elsewhere. If most of the "elsewheres" for your particular skills are similar corporations, and if they have colluded and agreed not to offer you a job just if you already are working at any of them, then once you have that first job, you are no longer free to bargain. You, as a single individual, have

          • by stenvar (2789879)

            Your sense of scale is lacking.

            It has nothing to do with "scale"; the analogy is simply wrong.

            A corporation with billions of dollars, thousands of employees, and politicians beholden to it offers you a wage to work for it.

            Most corporations are small businesses.

            Having corporations and government melded into one isn't capitalism,

            Of course it isn't. Unfortunately, that's exactly what our government delivers, foremost the Democrats.

            And Democrats deliver cronyism and rent seeking by demonizing business and indiv

            • This is a ridiculous tangent.

              By stenvar's logic a restaurant customer is the "owner" of the product of their hunger and they are selling the access to it...it's backwards.

              This is about twisting logic to support a fallacious conclusion.

              curse all GOP trolls!

    • by Stumbles (602007)
      Jail time? Your chances are better at getting struck by lightning or winning a lottery. Its always the big fish getting called out on these practices but it would not surprise me if the same occurs with the small fry.
      • by dk20 (914954)
        Seriously, how many "rich" actually go to jail?.
        .
        Poor and steal a chocolate bar - Jail time...
        Rich and steal $1MM - you are required to do community service and teach a 1 hour ethics course.
    • by mjwalshe (1680392)
      or apply the "not a fit and proper person" test to the C level execs ie you are bared for say 10 years or for life from ever being a director of a company.
    • by geek (5680) on Sunday March 23, 2014 @05:18PM (#46559217) Homepage

      The executives essentially formed their own union. The gentlemen's agreement (which is anything but. A crony capitalists agreement is a better name for it) is simply their by-laws.

      To counter this, every tech worker in the entire valley should form their own union and stick it to the fucking executives for a change. I moved from the valley 15 years ago because of shit like this. I'll never return but would love to see these mother fuckers get what is coming to them.

      • by tjb (226873)

        Well, except if you RTFA, it appears to have applied to executives and sales staff, not engineers. From the google document:

        "3. Additionally, there are no restrictions at any level for engineering candidates."

      • by stenvar (2789879)

        The gentlemen's agreement (which is anything but. A crony capitalists agreement is a better name for it) is simply their by-laws.

        You are mixing up things. "Crony capitalism" is when government hands out favors to private parties. The Obama administration has been heavily engaged in crony capitalism, even more so than the Bush administration.

        You also don't understand what this agreement is about. It's not an agreemen not-to-hire, it's merely an agreement not-to-cold-call. If you work for Google and want to g

    • Re: (Score:2, Interesting)

      by x0ra (1249540)
      I am not a religious man, but there is a few valuable quote. In this case, John 8:7:

      When they kept on questioning him, he straightened up and said to them, "Let any one of you who is without sin be the first to throw a stone at her.

  • I thought this was about an agreement to not support anyone who goes on grey-market safaris, etc. to protect endangered species...

  • by Anonymous Coward

    And so much cheaper than having to pay what employees are actually worth.

    • by tomhath (637240)
      From what I read in the emails referenced in TFA, the agreements only extended to managers and executives, not individual contributors like engineers and food workers. Of course there are managers who are H-1B, but I doubt many of them are complaining about their salary.
    • by x0ra (1249540)
      It does not applies to engineers, only to manager and execs. Please read the fact before spreading FUD.
  • by tomhath (637240) on Sunday March 23, 2014 @04:19PM (#46558907)

    The article mixes two things:

    Collusion between the companies to not recruit from each other, which is apparently illegal (since the DOJ stepped in).

    No solicit agreement with employees. That's part of a contract, I'll hire you but you have to agree that you won't refer my other employees to the headhunter who placed you. That's pretty standard and presumably is legal.

    • by Anonymous Coward on Sunday March 23, 2014 @04:24PM (#46558943)

      Not in California it isn't, same with non completes. Edwards decision killed non-solicits. You want capitalism then have captialism and make sure you pay your employees well.

      http://www.hrthatworksblog.com/2013/01/30/the-difficulty-of-enforcing-non-solicitation-clauses-in-california/

    • by Charliemopps (1157495) on Sunday March 23, 2014 @04:43PM (#46559029)

      The "legal" method that's fairly standard is the other way around. The temp agency places you, and you work for them. The company hiring the temp agency agrees not to hire you for a term... 6 months to 2 years depending, because the temp agency needs to recoup the cost of scouting you. Often there's a clause where the hiring company can buy their way out of it if they really want you bad or they're afraid you could just go to a 3rd party. All of this is pretty standard and legal because everyone knows what they're getting into. But, if unknown to you, every other party has made a secret agreement with the original company not to hire you, you're screwed. There's no-where to go and you're no longer dealing with a free market. You're being forced to abide by a contract that you never signed and don't even know exists.

  • by Anonymous Coward

    Should be pretty obvious, but nothing gets written down. To do anything they would need years of collecting testimony. The companies could just say that was a few CEO's ago and disavow all knowledge.

  • by LordNimon (85072) on Sunday March 23, 2014 @04:57PM (#46559111)

    Apparently, none of the companies I've ever worked for were on that list, because I'm hounded by clueless recruiters every week.

    • by metlin (258108)

      You're probably not high enough on the totem pole -- my take from reading that article was that the collusion targeted poaching of high-value employees whose loss would hurt the company in question.

      Individual contributors, by their very nature, are usually not worth the concern (except in rare cases).

    • Reply to them and say your minimum is $210k per year (or whatever). That will shut down almost all of them.
      • by evilviper (135110)

        Reply to them and say your minimum is $210k per year (or whatever).

        Yeah, I'll get right on that... I'm still a little busy replying to every spam e-mail I get, telling them I'm not interested and asking them to remove me from their mailing list. Once I get that finished up, and don't get any more spam, I'll switch over to recruiters.

        Have you seriously not talked to a recruiter in the past 5 years? There's a horde of (I'm guessing: Pakistani?) 3rd world "recruiters" that call up the phone numbers of EVERY

        • Don't stick your phone number on your resume. That's a mistake.

          If things keep going this way, I suppose I'll be permanently unemployed in just a few years, and unable to find jobs, even if there's an opening across the street from me.

          Yeah, unfortunately; skill #1 of finding a job is actually finding a job to apply for.

    • by chrismcb (983081)
      Recruiters from other tech companies, or recruiters from headhunting agencies?
  • by ToasterTester (95180) on Sunday March 23, 2014 @05:31PM (#46559295)

    I remember when I worked for Borland we used to joke that we were Microsoft's training site they poached so many people. From what I understand in one of the MS/Borland lawsuits Borland got no-poaching added as part of the settlement.

  • by jcr (53032) <jcr@nOSpam.mac.com> on Sunday March 23, 2014 @05:34PM (#46559315) Journal

    If anyone actually was trying to collude to hold tech wages down, they failed. We're some of the highest-paid workers in the country.

    I got cold-called by Google recruiters when I worked at Apple, and I know people who've gone from Apple to Pixar, Apple to Yahoo, Microsoft to Apple, etc, etc.

    -jcr

    • We're some of the highest-paid workers in the country.

      Imagine how much we could be paid if they hadn't colluded.

    • by tjb (226873)

      Yup, same here (well, not Apple but a different company that was mentioned and have totally gotten cold-called by Google). Based on the documents in TFA, it appears that the agreements were mostly about cold-calling and didn't apply to engineering staff. This seems mostly to be about executive staff and salesforce.

      Now, excuse me while I play the world's tiniest violin for those executives at major tech companies that had their salaries suppressed.

      • by jcr (53032)

        This seems mostly to be about executive staff and salesforce.

        I know people who've gone between these companies at all kinds of levels. Engineers, first-level management through SVP level, everybody.

        -jcr

    • Look at this clause from the article:

      3. Additionally, there are no restrictions at any level for engineering candidates.

      That's interesting because it suggests it's non-tech-wages being held down. It would still be blatantly illegal I think, but it undermines much of the rhetoric about this issue. Doesn't completely destroy it -- some agreements might have that for engineering candidates.

  • by Anonymous Coward

    I often wonder what supposed geniuses want to live there. SF is a dirty shit hole that costs 4-5 times more to live there. NYC in a tiny apartment is great for your twenties and I can totally understand that. Senior positions for 100-150k in SF? Yeah right. You can get that in most parts of the US. I am not suggesting to move to Iowa or Nebraska. There are plenty of tech cities out there if you want to keep your options. Maybe some of those lazy VCs will get a clue and hop on more planes. They shou

    • Excuse me? Did you read the Article? Hmm?
      Forcing concentration of tech people is GOOD economics.
      It's how you keep the peons working for pennies while you get home every night and richer every hour
      • by x0ra (1249540)
        Please, do you even know what you are talking about ? Tech worker are parsec away from "peons working for pennies", though, I admit $100k is a penny to $10M+ CEO salaries. Though, by the same standard, I bet you every temp unskilled worker in the US would *love* to work for a penny...
        • Wrong.
          The majority of those "Parsec away" peons work for less than 1/3 what an equally educated Wall Street Statistics Manipulator makes.
          Meanwhile, the average CEO is making more than 250x what the peons is making.
          And, where are MOST of those STEM workers now?
          In Bangalore and Hyderbad and Chengdu, working for $18K U.S.D. if they can get it.
          I agree, most of the people working TEMP make a good living...until the new software version comes out and then "sorry, not current"
          • by x0ra (1249540)
            Just calling traders "Wall Street Statistics Manipulator" discredit your whole comment...
  • Like any glutinous, power hungry 1%'er, there are always be Capitalists ready to engage in monopoly behavior.
    The defenders of the thieves are Judas Goats or Chauvinists, singing the Praises of the Emperors until they starve to death themselves, hoping for a greater reward for loyalty.
    Here's a hint chumps.
    Loyalty in Capitalism goes ONLY up, never down.
    • by x0ra (1249540)
      The problem, with unions, is that once you gave them the moon, they'll start asking for the solar system, or a their leader will start asking for a backshish keeping the mob under control. All in all, once a sheep, always a sheep.
      • Fine. What's wrong with that? Perfect Capitalism.
        They demand, you fight back, a compromise is reached
        you have something against dickering?
        • by x0ra (1249540)
          What is wrong which that ? You are currently asking the government to step in because you failed to gather enough momentum to unionize.
          • The government has a job to do
            Their job is to neutralize the advantage the 1% have in owning more than the whole bottom 80% put together, so people can vote WITHOUT FEAR of reprisal.
            • by x0ra (1249540)
              The government leaders are AMONG the 1% you are trying to fight, just like unions are just a mean for their leader to get their share... The only thing you are doing by asking for more regulations is to preserve the system in place. The more regulation there is, the easier it gets to keep people under control.
  • List of Companies (Score:4, Insightful)

    by bill_mcgonigle (4333) * on Sunday March 23, 2014 @09:33PM (#46560701) Homepage Journal

    which the TFS failed to include, as contacted by the publisher:

    AMD
    AOL
    Adecco
    Adobe
    Apple
    Best Buy
    CDI Business Solutions
    Cingular/AT&T
    Clear Channel
    Comcast
    Dell
    Dreamworks
    eBay/PayPal
    Foxconn
    Genentech
    Google
    IBM
    Illumita Inc.
    Intel
    Intuit
    Jcrew
    Kelly
    Kforce
    Lucasfilm
    Mac Zone
    Microsoft
    Nike
    Novell
    Nvidia
    Oglivy
    OpenTV
    Oracle
    PC Connection
    PC Mall
    Pixar
    Sun Microsystems
    Virgin Media
    WPP

    It would be interesting to see the connectedness of the Boards of Directors graph for the set.

  • What a good example of class warfare! Those company fight each other every day, with dozens of patent lawsuits, but when it comes to limit worker wealth, they manage to work together.

  • They used to actually tell employees in big meetings of engineers where they announced the annual pay raises. First they'd give a powerpoint presentation on their benefits packages, etc., and explain that their HR people had met with HR people from other big engineering employers in Silicon Valley and elsewhere to agree upon job titles and descriptions and pay scales. Finally they'd announce the annual raise and everyone would cheer except me, who didn't like being told "don't bother looking for a better deal, we've seen to it that you won't get one".

    I ultimately left HP and went to Fujitsu, a company that wasn't part of the "cartel" and got a pay raise of 50% and kept all my hard earned vacation time to boot. I haven't seen any mention of HP in any of the articles about this yet.

  • by BradMajors (995624) on Sunday March 23, 2014 @11:41PM (#46561257)

    Please stop calling this a "Gentleman's agreement. Those engaged in this practice are not "gentlemen".

  • A frozen top down controlled job market where the employee has zero input or freedom but most likely a great deal of security as they are locked in place. At least until HR decides they should eat dogfood somewhere else.

  • by Vincie (918910)
    Yes yes; let us not envy one another's slaves. We have plenty to go around.

A method of solution is perfect if we can forsee from the start, and even prove, that following that method we shall attain our aim. -- Leibnitz

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