Did US HR cartel extend to India?
By Sameer

They are among the richest and most powerful technology companies in the world.  Yet, for many years, Apple, Google, Intel, Adobe and Intuit colluded to ensure American IT workers had limited and restricted opportunities to move and grow between these tech majors. On Sept 25, Techgoss had published a US Government statement on how it was going to stop this illegal HR cartel.

The American Government statement against this cartel did not give any hints if such illegal activities extended beyond the borders of USA.

American whistle blowing site Cryptome has just published documents which show that the agreements between the tech giants was not limited by geography i.e. some of the illegal HR agreements may have extended to India and other countries as well.  If that wasn’t bad enough,  apparently,  Intuit even complained to Google that its HR team was ‘breaking’ this agreement, following which Google launched an investigation and told Intuit that it was not violating their non poaching pact.

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Google-Intel Agreement

Beginning no later than September 2007, Google and Intel agreed to refrain from cold calling each other's employees. Senior executives at Google and Intel reached this express agreement through direct and explicit communications. The executives actively managed and enforced the agreement through direct communications. The agreement covered all employees of both firms and was not limited by geography, job function, product group, or time period. In furtherance of this agreement, Google listed Intel among the companies that have special agreements with Google and are part of its ``Do Not Call'' list. Similarly, Intel instructed its human resources staff about the existence of the agreement.

Google-Intuit Agreement

Beginning no later than June 2007, Google and Intuit agreed to prohibit Google from cold calling any Intuit employee. Senior executives at Google and Intuit reached this express agreement through direct and explicit communications. The executives actively managed and enforced the agreement through direct communications. The agreement covered all Intuit employees and was not limited by geography, job function, product group, or time period.

In furtherance of this agreement, Google listed Intuit among the companies that have special agreements with Google and are part of its ``Do Not Call'' list. Google policed the agreement to ensure it was followed, including by investigating complaints from Intuit that Google had violated the agreement. On each occasion, Google determined that it had not violated the agreement and informed Intuit.
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(Techgoss had published the following on Sept 25, 2010)

US uncovers HR cartel
By Sameer

They are among the richest and most powerful technology companies in the world.  Yet, for many years, Apple, Google, Intel, Adobe and Intuit colluded to ensure American IT workers had limited and restricted opportunities to move and grow between these tech majors.

As this cartel like behavior to control part of the HR market is illegal, it was just a question of time before someone complained to the US Government.  The US Department of Justice released the following report on Friday, Sept 24, 2010.  (Most controversial reports are released on a Friday as this ensures less media attention.)  Many people take a break on the weekend and so do not pay much attention to press releases sent on Friday or the weekend.  Techgoss is publishing the entire US Government statement below as it describes it great detail how these companies worked together against the interests of tech workers.

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The Department of Justice announced today that it has reached a settlement with six high technology companies – Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar – that prevents them from entering into no solicitation agreements for employees.   The department said that the agreements eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities.

The Department of Justice’s Antitrust Division filed a civil antitrust complaint today in U.S. District Court for the District of Columbia, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.                

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.”

In the high technology sector, there is a strong demand for employees with advanced or specialized skills, the department said.   One of the principal means by which high tech companies recruit these types of employees is to solicit them directly from other companies in a process referred to as, “cold calling.”   This form of competition, when unrestrained, results in better career opportunities, the department said.

According to the complaint, the companies engaged in a practice of agreeing not to cold call any employee at the other company.   The complaint indicates that the agreements were formed and actively managed by senior executives of these companies.

The complaint alleges that the companies’ actions reduced their ability to compete for high tech workers and interfered with the proper functioning of the price-setting mechanism that otherwise would have prevailed in competition for employees.   None of the agreements was limited by geography, job function, product group or time period.   Thus, they were broader than reasonably necessary for any collaboration between the companies, the department said.

The department said in its complaint:

- 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;
- Beginning no later than September 2007, Google and Intel executives agreed not to cold call each other’s employees.   In its hiring policies and protocol manual, Google listed Intel among the companies that have special agreements with Google and are part of the “Do Not Cold Call” list.   Similarly, Intel instructed its human resources staff about the existence of the agreement; and
- In June 2007, Google and Intuit executives agreed that Google would not cold call any Intuit employee.   In its hiring policies and protocol manual, Google also listed Intuit among the companies that have special agreements with Google and are part of the “Do Not Cold Call” list.
 
The proposed settlement, which if accepted by the court will be in effect for five years, prohibits the companies from engaging in anticompetitive no solicitation agreements.   Although the complaint alleges only that the companies agreed to ban cold calling, the proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees.   The companies will also implement compliance measures tailored to these practices.

Today’s complaint arose out of a larger investigation by the Antitrust Division into employment practices by high tech firms.   The division continues to investigate other similar no solicitation agreements.

Adobe Systems Inc. is a Delaware corporation with its principal place of business in San Jose, Calif., and 2009 revenues of nearly $3 billion.   Apple Inc. is a California corporation with its principal place of business in Cupertino, Calif., and 2009 revenues of more than $42 billion. Google Inc. is a Delaware corporation with its principal place of business in Mountain View, Calif., and 2009 revenues of more than $23 billion. Intel Inc. is a Delaware corporation with its principal place of business in Santa Clara, Calif., and 2009 revenues of more than $35 billion.   Intuit Inc. is a Delaware corporation with its principal place of business in Mountain View, Calif., and 2009 revenues more than $3 billion.   Pixar is a California corporation with its principal place of business in Emeryville, Calif.
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