Tuesday, January 31, 2012

Competitive capitalism?

A free market for labour? Not so. Google, Apple, and many other Silicon Valley companies entered into illegal “no poaching” deals, according to the Department of Justice, showing extreme measures technology giants take to keep top talent. The DoJ released evidence from its investigation into the hiring practices of top tech companies, demonstrating non-competitive hiring agreements existed.

A former Lucasfilm software engineer sued the companies, alleging they had secret agreements not to recruit each other’s employees, pacts which violate antitrust laws, keep employee salaries and benefits down.

The DoJ document includes an e-mail message from Adobe senior vice president of human resources, Theresa Townsley, confirming Adobe and Apple agreed not to hire each other’s staff. It also alludes to similar agreements between Lucasfilm and Pixar, as well as a Google-Intel no-poaching pact.

Companies hand out bonuses and stock awards to keep top executives, such as the $380 million in stock. Apple recently gave its CEO, Tim Cook, but they in turn cap salaries of employees on the front lines and ensure nobody else can make a better offer, in effect tying them to the company through a lack of choice.


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