There she goes again. The Justice Department’s antitrust chief Christine Varney is convinced that tech companies are doing wrong and her underlings are going after them aggressively. She has already given Google notice that she is keeping an eye on them. But now the Justice Department is looking into possible collusion among large tech companies including Apple, Yahoo, and Google for purportedly agreeing “to not actively recruit employees from each other,” according to the NYT.
Yup, that’s a real head scratcher. I guess IBM is not involved in the cabal, since Apple hired way one of its top chip designers, Mark Papermaster, and got into a big lawsuit with IBM over the incident. And Yahoo, nobody would dare steal employees away from Yahoo. That never happens (cough, Microsoft). Or from Google—unless you are Facebook.
Stealing employees from each other is a way of life for tech companies. Silicon Valley is one of the most competitive employment markets in the country—for CEOs and VPS to engineers. But all Varney can see when she looks out West is a large antitrust prize. Doesn’t she have anything better to do? Here is a suggestion: Investigate the weird spikes in gas prices that happen regularly for no apparent reason or the insanity that is health care pricing. But leave tech companies alone until they actually step out of line.
That’s part of work and business
When companies compete, consumers win. Hasn’t this been a mantra for ages now?
Now that’s an insight most of our lawmakers cannot get… hence all the law-making in the name of “saving” consumers….or their children..
I think you’re clouding the real issue. The piece of this case that crosses the line is the part where a series of large companies agree not to compete with each other. This practice is illegal, whether it relates to recruiting, price fixing, or any other competitive dimmension.
Anti-trust is unconstitutional and should be killed. Anti-trust is arbitrary where the rights of the non-owners of the property/business who carry no risk at all is elevated to be more important than the rights of the property/business owners where they themselves can go bankrupt any day if they don’t make profits. The business owners carry huge amount of risks.
Yes, the business owners carry huge risk. They also realize huge profits. That is the tradeoff they are willing to accept, otherwise they would not start a business to begin with.
How would you like it if your salary was capped by a secret deal? What about the smaller, more vulnerable business who don’t have the luxury of making these large scale back-room deals? They are the ones at risk of going out of business – the same business owners you claim need to be protected.
You clearly do not understand the conditions foster a healthy, competitive economy.
Ryan said…
You clearly do not understand the conditions foster a healthy, competitive economy.
I understand how statism can hinder economic progression which you what socialists like you advocate for.
Now list evidences here of these conditions that lead to those healthy, competitive economy? Point to studies that back up your assertion. If it is peer review economic studies that’s good because it is more credible. Unless you can point out facts, your assertions is entirely arbitrary and must be dismissed.
Wrong. The reason we have anti-trust laws is because we believe in the power of the marketplace to sort out the winners from the losers. Monopolies and other sorts of market-wrecking collusion should not be permitted by anybody who thinks of themselves as in favor of free markets.
William said…
Monopolies
How do you get to be one in the first place? Did any monopoly got there with the bless of the state? I mean the state stepped in there and helped Microsoft by banning any other competitors via law not to come in to its territory so that it becomes a monopoly? You don’t get there by holding a gun to consumers foreheads. Consumers voluntarily buy those products/services out of their own volition?
The other point is, does Microsoft or any other monopolies have rights to your money? Are they entitle to get your money via buying from them? If yes, what is this entitlement is based on? If no, then my point stands. Consumers don’t have rights to anyone’s products in the market. If they don’t like them, don’t buy them, simple as that. The properties/products/services belong to the owners and not the consumers. Statism argues the other way. The fruits of your work belongs (I mean anyone can have a claim to it) to the the society.
You’re absolutely right William.
Falafulu Fisi – if you’re looking for evidence, just ask the Supreme Court, there’s plenty. You obviously have no clue about macro-economics. Your view is over simplified because it never extends beyond the act of a single consumer transaction. Go read some Adam Smith and then come back with an informed opinion.
Ryan said…
if you’re looking for evidence, just ask the Supreme Court, there’s plenty.
Court cases about anti-trust prosecutions is not economic evidence?
Ryan said…
Go read some Adam Smith and then come back with an informed opinion.
State exactly what Adam Smith said about the free markets and monopolies via voluntary actions of market agents (ie, consumers/producers) ?
There should be free movement of talent… unless the employee steals some proprietary material.
If someone or some company is ready to pay big bucks for my talent then it should be only I who decides!
but yes there is a darker side of everything
I am not sure I understand. I thought that’s what non-competes are for and it might indeed not be very ethical for management to agree not to compete in compensation… so I am not sure why you are unhappy about government saying “please compete for employees in a standard way”. Or is that not what they are saying?
non-competes are not recognized as legitimate contracts in California and are unenforceable.
I guess that the employees signed a NDA with the companies they work, so I see no trouble switching, that’s free market. People and talent have the right to value themselves.
dude… move as you will. (It used to be a free country, back in the day) The government is currently frozen and enslaved by its own foolishness. Let the tech geeks wander.
I think you need to RTFA the government are possibly investigating agreements between the companies too not poach staff from each other.
In this case the government are trying to guarantee your freedom to wander where you will and ensure a free market for labor.
Yes those agreements to exist. They will interview anyone who applies but should two companies have an agreement then there respective staffing groups will not approach the employees of the other company and solicit for employment.
There should be no boundaries to work.Talent should be independent.Then why justice dept. is worried?
If I have talent and any company is hiring me,Why should security & justice dept. interrupt.I have my own talent if company is agree to hire then why ?
No objection should be made by justice dept..
The government is confused? That’s odd, I heard they were omnipotent.
I like government for keeping the sheep hearded and all, but when will they get their grubby fingers out of business? If the government was treated like a business itself it would of been in the deadpool ages ago.
DS said…
If the government was treated like a business itself it would of been in the deadpool ages ago.
Agreed completely. It only shows that Christine Varney from the Justice Department is a thug. Philosopher and writer Ayn Rand once quoted:
When the productive have to ask permission from the unproductive in order to produce, then you may know your culture is doomed.
Yes, Ayn Rand meant exactly to such unproductive thug as Christine Varney. She (and of course the government itslef) doesn’t produce wealth, because government by its nature leeches wealth (taxation) from the productive members of society. Christine Varney is a property rights violator and she should get out of the way so that private businesses can get on with producing wealth.
omnipotent perhaps, but omniscient… no.
One of the problems inherent to the valley culture I guess. Everybody knows each other, and you don’t want to piss off somebody that you might work with in the future.
Still, if these companies are colluding to suppress the free market of labor, I hope the gov nails their snocholates to the wall, ok? Such is the word of Sanjay.
“Here is a suggestion: Investigate the weird spikes in gas prices that happen regularly for no apparent reason or the insanity that is health care pricing. But leave tech companies alone until they actually step out of line.”
Amen….
seriously, when it comes to anti trust, the health care companies and oil companies should be the first to be examined.
@Juan, your touching at the real conflict of interest here: “People and talent have the right to value themselves”.
As an arm of the Federal government, the DOJ investigating the movement of employees (talent) from one company to another strikes closely at our individual rights as citizens.
Regardless of whether the employee was a key component to a companies management staff or a support staff employee, they’re free to choose their employer if they are fortunate enough to have multiple options.
Companies need to compete for talent as much as they do for customers. This is a good thing.
I’ll echo Erick in the article above and suggest the DOJ go look into real anti-competitive practices and let this one go.
Or is the DOJ too afraid to go after strong & powerful lobbyists that fund the congressional campaign coffers?
Ok, end /rant!
>Companies need to compete for talent as much as they do for customers. This is a good thing.
Yea, that’s what the DOJ is saying (and it is what you are somehow advancing and disagreeing with at the same time.
Did you read the article?
Why are so many people reading this wrong?
The Govt is not saying “Hey, you can’t change jobs.”
The point the DOJ is making is that employees are not able to move freely because a few big companies have agreed not to actively recruit talent from one another. (which would obviously result in lower pay, less competition, etc..)
A way of life for ALL companies…not just tech companies.
I don’t understand this post. Are you saying that since people move between these companies all the time, there really is no collusion and the DOJ is wasting its time? If you value a competitive market (which, by the sound of your post, you do), the DOJ cracking down on any kind of non-solicitation collusion is a good thing.
I fail to understand why agreeing not too take employees from each other is a crime. In my mind is no different than any other “partnership”.
Open source employees. Why not share employees. Or do companies live under the delusion they can actually stop knowledge transfer.
So companies want to be able to terminate employees or relationship at will, but not the other way around?
Rise of the knowledge worker means companies are no longer in control. We don’t need you….you need us.
It is called collusion. It is a criminal activity.
“Investigate the weird spikes in gas prices that happen regularly for no apparent reason or the insanity that is health care pricing. But leave tech companies alone until they actually step out of line.” Great point, but will never happen! Gas price spikes and crazy health care pricing is caused by the looters in Washington. She’ll never touch those guys. But she will see what blood money they can squeeze out of the producers in Silicon Valley.
Your tax dollars at work! This is another ridiculous, wasteful witch hunt on her behalf. It’s one thing to try and make a name for yourself, it’s quite another if that name is an idiot.
But like I said last time — the Donkey’s at these companies voted this admin in – and they knew what they were going to get — so let them suffer for it.
Pay more. Create products employees want to work on. Give more perks.
And old command and control people retire already, jesus!
Well contrary to popular belief, TechCrunch doesnt know everything going on out there – the Justice Dept obviously has reason to suspect something and is acting accordingly.
Why are you ranting about actions that may very likely have a positive impact on employment in the current economy? Such agreements like the ones the JD is going after sours the market, and limits candidate employment.
I for one applaud Varney for going after Big Corp and giving control back to Little Guy.
Kudos!
Erick I couldn’t agree with you more about having the government look into more pressing matters like the health care spike caused by insurance companies or the erratic price hikes of gas.
This really has nothing to do with the moving of employees. It has everything to do with tax revenue in a near bankrupt state. Right now I would absolutely hate to be anything other than be an employee in California.
They’re desperately reaching for any kind of revenue they can get their hands on under any technicality possible.
But I agree, the government needs to step back and let free enterprise be free. Each day I turn on the news I fear for my freedom and feel as though the politicians elected have lost sight of “We the people FOR the people.”
Without a doubt, free market should be free and if someone would have offered me a job from x-company to y-company it should be my decision not the courts or governments.
Nice post, there are so (so) many bigger fish to fry.
The examples don’t really make sense though, the issue is AppleYahooGoogle collusion, but you site Facebook and Microsoft.
Exactly, Facebook stealing from Google is irrelevant, as supposedly there was no collusion going on between those two.
And the (illegal) problem this creates is that the big companies (Yahoo-Apple-Google) are able to artificially suppress salary increases when they agree not to hire from each other.
Erick, you know not of what you speak here. The DOJ is right to investigate.
As an executive search professional, we have never stolen an employee. We recruit. We do not sneaked into a company and put an employee into a sack and leave.
If the DOJ wants to open a can a worms, I have heard of start ups not willing to consider candidates from companies that have the same VC firm as an investor.
How much corporate espionage goes on with this? “interviewing” competitors employees for information? Or accepting interviews to get information?
Does that actually happen?
Say what you want. They have an agreement not to approach each other’s employees. They find ways around it but soliciting the employee to make the first formal contact, then it’s fair game. THEY ARE NOT ALLOWED by their agreements to initiate the process.
So no real biggy, but still some sort of limit on competition.
I think you sort of missed the point here, Erick.
We can debate what kind of effect such an agreement has had so far, but what is clear is that if such an agreement does exist, it could likely violate regulations against collusion.
Here’s an analogy. Suppose all the major airlines agree that they won’t charge less the $300 for a flight for NY to LA. When the JD investigates this, Delta points out that they advertised such a flight for $250 a few weeks ago. This alone doesn’t disprove the fact that many other transactions were affected by collusive agreements. Just because a collusive agreement isn’t ironclad doesn’t mean it isn’t negatively affecting the free market.
In the same way, pointing out the instances where employees jump from one company to another doesn’t prove that there is no agreement, or that if there is, it is totally ignored. In how many other cases were employees prevented or coerced from switching? That’s the more relevant point.
Yes, gas prices and health care are a bigger deal. But the fact that there might be bigger busts out there doesn’t obviate you from investigating violations of a smaller scale. They’re still gaining a greater control over their employees, and impeding the free flow of capital in a way that is not currently allowed by law.
i wonder….
did anyone of you actually read the article?
the issue at hand (or rather potential issue) is whether companies agreed to not poach/recruit each other’s talent… this would/could artificially depress the wages of talent. this kind of agreement would be collusion, and illegal…
so, to the extent that the fed govt’s role is to maintain an even playing field.. these agreements shouldn’t exist.. however, in all honesty.. i seriously doubt you’ll ever find a smoking gun that points to them existing!
I couldn’t agree more, from what people are saying in the comments they seem to think that the NYT article was indicating that the govt wants deny people there right to move between companies when in fact they are trying the opposite.
I’m beginning to think that even Erik didn’t read the NYT article before writing his post….
First, are not non-compete agreements already illegal in California? Besides, restraint of gainful employment with major companies in recessionary times not good. Second, what is underlining intent of Fed investigation anyway? Prevent any form of “collusion”, employment or price-fixing, etc. Perhaps, given current high unemployment, companies could better retain employees if potential competitors would not hire former employees. Also, does this investigation concentrate on California based companies? What about issue of immigrants?
If you don’t understand why gas prices are spiking, you’re obviously not keeping up with international news.
If you’re going to try and sound smart, at least be smart.
from my experience, the price of gas always finds a reason to rise before the summer travel season.
ok twirrim…
i’ll bite… why is the price of oil spiking….
it’s not due to demand.. hell.. there’s a serious boatload/tanker load of oil running around the oceans right now… it’s not due to the huge deamnd of the consumer driving their cars… yeah, i know.. mastercard says they showed a 2% increase in credit cards for gas purchases.. .. but they didn’t show anything regarding actual gallons/quantities purchased..
the reason you have the 2% increase.. is because more people are out of jobse, with less cash, and are therefore using their credit cards to purchase gas…
the international markets are shoring a decline in the demand.. now i grant you.. the futures are ‘predicting’ a rise in demand.. but that’s the speculators…
which is now where we get to the real reason for the spike… it’s speculation.. just like it was last year…
and this is why exxon will once again.. say..” oops… we don’t know how we made a few billion in profits.. guess we were just lucky!”
yeah.. right…
Insecurity and personal interest emanate from most of the replies here and this article itself.
Rob, you’re cool… and smart. I like you.
You have it backwards Erick. They WANT Google and Apple to steal employees for each other, they are trying to stop Apple and Google from banding together to go up against Microsoft and Intel, who are also banding together. They don’t want very large companies to form such close ties, because whose to say where one company begins and one ends?
That said, I disagree with putting any of these restraints on, I think Google/Apple vs MS/Intel would be a fun battle to watch.
Anyone consider that this could just be a straw man situation arranged between the Obama administration which happens to be slightly in the Googlers? It would a lot easier for them to bust their chops on something snooze worthy to the general public like recruiting. Headhunter guy makes a great point too about how some start ups have understandings among others with the same VC backers about not taking from each other. No surprise there.
There is one big upside to having an understanding between the big players: they save a ton of money on employee turnover and acquisitions that can go back into their bottom line or be spent recruiting from everyone else. The smaller startups end up being at a disadvantage.
One more case study that may be of interest to the constitutional scholars commenting here:
Fannie Mae and Freddie Mac do the same thing. They’ve got formal rules about recruiting out of each other. The rules help out quite a bit because otherwise the Fannie and Freddie employees would get no work done because the local, national and global staffing industry would burn their phones up trying to push them to move.
And one more thing for executive search guy…stealing may not be the choice word for what gets done, poaching is better. A successful headhunter doesn’t just catching people falling out of the sky.
Bob
Jobmatchbox.com
PS-If anyone wants a change we’ve got a lot of startups in Washington, DC who are hiring now.
Ummm. Does violation of a collusion agreement signify that there was no collusion?
Exactly. Being incompetent at carrying out a crime does not excuse the crime. Erick’s right, there could be no collusion. But an easier explanation is that there’s not much honor between thieves.
For all those that voted for the “one”; you’ll be hoping for change alright. And for all those that didn’t vote for the “one”…. change can’t come soon enough. We hope.
Double standard? Curious: if it’s okay (purely “self financial interest” or “standard practice” or the like) to seek a higher paying job at a different giant techie organization, then why isn’t it okay for an executive of a huge oil company to seek his or her “self financial interest” or “standard practice” or the like by making a sudden unexplained price hike?
Uh-oh, Google has gotten too big now, and is a juicy target for liberals (anybody remember Microsoft circa 1999-2000 and Janet Reno?). Sergey needs to hire more lobbyists, and fast.
Shouldn’t the Justice Department be doing something useful, like prosecuting vote fraud (i.e. Black Panthers threatening voters with nightsticks) or possibly helping lock up terrorists.
BTW, when is agreeing not to screw over a competitor anti-trust, and not an indicator of integrity? That’s kind of anti-anti-trust (ie, you don’t steal your competitors good employees away, this keeping them in business,rather than putting them out of business and gaining more share of the market for yourself).
The more I read this, the more I am convinced bureaucrats became bureaucrats because they couldn’t succeed at anytihng else (like private business, or common sense)
Calling red herring on this one. It’s not about who taking whom from who. It’s about beginning the process of total govenment control of those companies and the internet (of which His Majesty already has, should he care to use it – using it would look bad, so in the backdoor He whisks).
Just watch.
Wow there sure are a lot of people who don’t know how to read. 80% of the respondents on this thread don’t get what the DoJ is doing here.
They are going after suspected collusion when companies agree to NOT poach from each other for certain jobs, which screws employees and the talent free market big time.
Who really cares if one person leaves and go to another. Its called Freedom of choice, My only Allegiance is to the Flag of the United States and Jesus Christ….Period
Advertising a job posting and seeking employment do not equal collusion. Recruiting? Try to define and regulate that. Good luck DOJ
Clearly, the author has little to no grasp of the concept of anti-trust behavior.
The issue isn’t that a particular company chooses not to poach from a competitor.
This issue is when the primary competitors collectively agree to abide by the rule.
What else is being discussed among competitors?
Jobs? Wages? Product rollouts? Price Increases? Layoff?
THAT is anti-competitive behavior. And that is precisely why the DOJ is involved.
Nitwit.
The point is how easy a problem this is to navigate if you want to involve legalities. Keep smokin that realism if you want.
It’s like going after steroid use in pro sports. Nitwit
The DOJ investigation IS occurring, correct?
Umm, yes.
Stop Talking now.
Competition is killed when these companies agree not to hire from one another’s employees, and it would seem that the current employees don’t have a choice to move to a “rival” company if they so choose. But then, on the other hand, such an agreement may actually open up more opportunities for others to be hired into these companies, instead of always looking to the same people.
I think the problem is the companies agreeing NOT to try and recruit each other’s people… which would result in less competition amongst employers and thereby keep wages lower than if they had to compete for good people. There could be an issue of collusion there just as much as if steelmakers formed an agreement to not compete in certain markets in order to keep steel prices high.
Wage suppression isn’t the cost factor these companies are worried about so much as retention and acquisition costs associated with employee turnover. There are plenty of other jobs in the market that offer more money.
Lets investigate collusion in congress, the oil companies, big drug… what the hell how about any business. Talk about ignorance. What world do you live in. Obviously you have the I.Q. of a salty peanut and honestly believe that you can change the world if you could just stop people from being human. I’m done. (devilsadvocate101)
Your lukewarm thinking and cloudy analogies mean nothing.
Clearly, smarter people than you disagree with your silly point of view and have launched the investigation anyway.
Consider kicking yourself in the balls. Or reading the business section of any newspaper in America.
Thanks Twit.
guess i should read the actual articles before i just go around aimlessly picking fights. gosh, you got really upset there. i’m still laughing at your sensitivity. just because their elected officials doesn’t mean their smarter than me. people with passion and drive cling to retained knowledge and opinions. (probably some greed as well) some of you guys sure are entertaining though. maybe you should have your blood pressure checked.
oops i misspelled some words there too. i suppose that also makes me dumb. your too funny.