Apple and Google at the Center of Anti-Poaching Conspiracy

Source: Thinkstock

Source: Thinkstock

Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) are well-known rivals in the smartphone market, where iOS and Android are the two most popular mobile operating systems. However, when it comes to limiting the wages of their employees, it appears that the tech giants are more than happy to cooperate with one another. Both companies were at the center of a widespread anti-poaching conspiracy that limited their employees’ job options and salary potential, reports Pando. Besides Apple and Google, the illegal agreements also included Adobe (NASDAQ:ADBE), Intel (NASDAQ:INTC), Intuit (NASDAQ:INTU), and Disney’s (NYSE:DIS) Lucasfilm and Pixar units.

As noted by Pando, a 2010 Justice Department probe of the wage-fixing conspiracy resulted in a settlement that required the companies to stop their anticompetitive employment practices. However, the companies now face a class action suit from the employees who were affected by the conspiracy. Court documents from the class action case that were obtained by Pando revealed the extent of the conspiracy and showed that it originated with a secret agreement between Apple’s Steve Jobs and Google’s Eric Schmidt.

According to the documents seen by Pando, membership in the wage-fixing cartel soon grew beyond just Apple and Google to include many other companies that were not revealed in the original Justice Department investigation. Companies such as Clear Channel (NYSE:CCO), Comcast (NASDAQ:CMCSA), Dell, DreamWorks (NASDAQ:DWA), eBay (NASDAQ:EBAY), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), and London-based public relations company WPP were all involved in the conspiracy to some extent. As noted by Pando, the combined workforce of these companies totals well over a million employees.

According to emails and internal company memos from Apple and Google, the conspiracy started in early 2005 when Steve Jobs warned Google’s Sergey Brin to stop recruiting workers from Apple or face “war.” Soon afterward, both companies sent emails to their respective recruiters asking that they not hire from each other’s companies. As noted by Pando, the timeline of the memos confirmed that the non-solicitation agreements were the result of secret communications between the two companies. Google and Apple executives had previously tried to claim that the timing of the non-solicitation memos at both companies was merely coincidental.

Over the next several years, the non-solicitation list grew to encompass dozens of companies with thousands of employees. However, it should be noted that some of the companies contacted by Pando have claimed that they had never asked to put on a non-solicitation list and that they maintained no reciprocating list of their own.

According to court documents, Intuit, Pixar, and Lucasfilm are seeking a negotiated out-of-court settlement. However, it appears that Adobe, Intel, Google, and Apple will continue to fight the civil class action suit.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)        

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