In the high-tech bubble that is Silicon Valley, engineering talent is king, and the battle for that talent is often fierce. Indeed, Steve Jobs was so paranoid about other companies stealing his employees that the “About This Mac” option on the Apple menu bar – which used to list the names of employees involved in the development of a particular OS – now simply contains, you guessed it, solely technical information about the computer.
And of course, there’s also the famous story of Microsoft CEO Steve Ballmer absolutely losing his mind upon finding out that a top executive was jumping ship for Google. “Just tell me it’s anywhere besides Google”, Ballmer reportedly said.
In short, companies aren’t just interested in keeping the employees they have, they have a vested interest in keeping their employees from joining a rival firm.
To that end, a number of high-profile companies, including Apple, Google, Intel, Adobe, Pixar, Intuit, and Lucasfilm, are being sued for entering into agreements which prevented them from recruiting employees – via cold calling – from company’s that signed on the dotted line.
While this scheme is certainly advantageous for employers, it limits the options available to employees, is blatantly anti-competitive and consequently runs afoul of antitrust laws.
Late last week, US District Judge Lucy Koh ruled that the private lawsuit would not be dismissed and can continue on subject to the plaintiffs amending their complaint and refiling it.
The case is a private lawsuit brought on behalf of employees that mirrors claims the companies settled with the U.S. Justice Department in 2010 following a probe. The companies agreed to refrain from placing “cold calls” to lure workers from competitors, the government said at the time.
Koh didn’t take issue with the allegations about the agreements between individual companies, Joseph Saveri, a lawyer for the plaintiffs, said in an interview after the hearing. Instead, Koh has questions about “how it ties together,” or claims of an over-arching conspiracy between all the companies, he said.
So yes, the matter was effectively settled years ago but some private folks are taking to the courts on behalf of affected employees.
As we reported a few years ago, Apple and Google, for a period of time that began in 2006, had a “Do Not Call List” comprised of employees the other company was not allowed to directly solicit. What’s more, Apple and Adobe as well as Apple and Pixar had similar agreements in place.
Following the US Justice Department’s investigation, the companies were prohibited from entering into non-solicitation agreements that would preclude other companies from recruiting – by any means – employees of another company.