Justice Department puts an end to non-solicitation agreements for Apple and co.

Mon, Sep 27, 2010

Legal, News

The Justice Department on Friday announced that it reached a settlement with Adobe, Apple, Google, Intel, Intuit, and Pixar that effectively precludes them from entering into non-solicitation agreements with one another. Not too long ago, it came to light that Apple and Google, for example, had both agreed not to poach one another’s employees. As Google grew to become more of a riva/competitor to Apple, that tacit agreement began to carry less weight.

In any event, the Justice Department put an end to the aforementioned agreements reasoning that they create an anti-competitive environment that ultimately affects employees who may not be able to take advantage of better job opportunities.

According to the complaint, the six companies entered into agreements that restrained competition between them for highly skilled employees.  The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees.  An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees. 

“The agreements challenged here restrained competition for affected employees without any procompetitive justification and distorted the competitive process,” said Molly S. Boast, Deputy Assistant Attorney General in the Department of Justice’s Antitrust Division.  “The proposed settlement resolves the department’s antitrust concerns with regard to these no solicitation agreements.

The non-solicitaiton agreements were reportedly not limited by geography, job position, product group, or even time period. That being the case, the Justice Department found that they were “broader than reasonably necessary for any collaboration between the companies.”

And some more Apple tidbits from the official announcement:

  • Beginning no later than 2006, Apple and Google executives agreed not to cold call each other’s employees. Apple placed Google on its internal “Do Not Call List,” which instructed employees not to directly solicit employees from the listed companies. Similarly, Google listed Apple among the companies that had special agreements with Google and were part of the “Do Not Cold Call” list;
  • Beginning no later than May 2005, senior Apple and Adobe executives agreed not to cold call each other’s employees. Apple placed Adobe on its internal “Do Not Call List” and similarly, Adobe included Apple in its internal list of “Companies that are off limits;
  • Beginning no later than April 2007, Apple and Pixar executives agreed not to cold call each other’s employees. Apple placed Pixar on its internal “Do Not Call List” and senior executives at Pixar instructed human resources personnel to adhere to the agreement and maintain a paper trail;
Going forward, each of the above-mentioned companies will be prohibited from entering into non-solicitation agreements that would prevent a company from recruiting (whether it be via cold calling or other means) employees from rival companies.

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