Apple, Google reportedly shared agreement to not poach employees

[AppleInsider]

Apple and Google had an informal agreement not to recruit each others' workers while Eric Schmidt, the search engine's CEO, served on both boards, according to a new report.

While the agreement was not written, it was considered protocol in Google's recruitment division, sources told TechCrunch. The alleged agreement between the two companies may have sparked an antitrust investigation from the U.S. Justice Department.

Whether the unofficial rule is still in place is uncertain. Earlier this month, Schmidt stepped down from the Apple Board of Directors, citing Google's encroachment into the Mac-maker's core businesses with Android and Chrome OS. Sources told TechCrunch that it's possible that Schmidt's resignation may have signaled the end of the agreement.

"To be clear, this unwritten agreement was that Google would not go after Apple employees, and vice versa," the report states. "However, employees of both companies were free to apply to the other company on their own, we’re told. That’s a small, but important difference as the practice of going after other company’s talent, also known as “poaching”, is considered to be an important component of healthy competition in the market. That’s why the Justice Department is looking into it."

The report also includes an e-mail from Google's hiring department that states "Google has an agreement with Apple that we will not cold call their staff."

In recent weeks, trouble has developed between Google and Apple. Weeks ago, Apple rejected the Google voice application, and pulled two programs that used the Voice service from the App Store. Both Google and Apple have been talked to for an investigation from the Federal Communications Commission over the matter.

Prior to his resignation, Schmidt already had to recuse himself from board meetings that involved iPhone plans, many of which would clash with Google's own attempts to promote its Android mobile operating system. Though the Google executive was adamant that the two companies don't occupy the same markets, the Federal Trade Commission has been investigating the Apple-Google link for a possible violation of antitrust laws through unfair collaboration.

[brucep]

I had hoped apple and google could do great things together. Or is all this tension a media invention ?

[JulesLt]

Interesting times ahead. If you wanted to make Android better, who would you hire

[Abster2core]

Originally Posted by brucep

I had hoped apple and google could do great things together. Or is all this tension a media invention ?

More likely than not.

[Hudson1]

If this is a violation of an anti-trust law, which law? AppleInsider, please do your readers a service and explain.

Frankly, I've never heard of something like this being an anti-trust violation. As the article claims, Apple and Google were free to hire each others' employees if they applied.

[krreagan]

If this is true, it would seem that ES stayed on Apple's board for too long! I agree that poaching is a beneficial practice in the long run and should not be allowed to be hindered by business relationships.

KRR

[charlituna]

Originally Posted by Hudson1

If this is a violation of an anti-trust law, which law? AppleInsider, please do your readers a service and explain.

Frankly, I've never heard of something like this being an anti-trust violation. As the article claims, Apple and Google were free to hire each others' employees if they applied.

Anti-trust is all about allowing and even promoting competition within a market. There are likely several laws under the Anti-trust umbrella that would be potentially violated. Including but not limited to laws against one person serving on the board of two companies in the same market (which is why Schmidt left the Apple board now that Google is creating an OS), laws against overly restrictive anti-competition clauses that prohibit a worker from hiring on with another company etc.

the sticky bit is of course proof that this practice was codified in any way. even just this alleged email. otherwise it's all really hearsay. Particularly if there were persons that voluntarily applied and were hired. That at least shows that there was no practice of not hiring from each other.

Frankly I think cold calling to be tacky so I have no issue with a practice not to do it. But my opinion is not law.

[Buddha56]

I worked as a Google engineering recruiter for over two years and this was a WRITTEN policy. Apple was on a "no poach" list for all Google sourcers and recruiters.

[bigdaddyp]

Google's os sounds like it will be open source and free. Apple's os is great but is still a small player when compared to Windows market share. I just don't see how this is anti competitive at this time and I think that this is a big waste of tax payers money.
Would it have been smarter if they had done a stock swap or smallish cross stock purchase? Would that have made Eric being on both boards moot?

[bigdaddyp]

Originally Posted by Buddha56

I worked as a Google engineering recruiter for over two years and this was a WRITTEN policy. Apple was on a "no poach" list for all Google sourcers and recruiters.

Ok but if an Apple engineer came to you was he still off limits? If so then that would indeed be anti competitive.

[Kibitzer]

It will be interesting to see an antitrust investigation go forward. It may bring out some legal precedents of which most people are unaware, or it may or may not lead to the establishment of new precedents related to anticompetitive behavior across the business spectrum.

[bigmc6000]

Way to go FCC - this informal agreement was actually beneficial for not only both companies but also innovation but by sticking your nose in you forced Eric to step down and now I'm quite certain there will be no such gentleman's agreement - great, thanks.

[Buddha56]

Originally Posted by bigdaddyp

Ok but if an Apple engineer came to you was he still off limits? If so then that would indeed be anti competitive.

Yes, that would be the work-around but we would have to reach out to our manager and get approval to speak w/any engineer whose company was on the list. I've seen folks get in trouble for ignoring this rule and just contracting them directly from an inquiry.

[brucep]

Originally Posted by Abster2core

If you are going to quote somebody, at least have enough respect to quote them accurately.



Equally important, you have not only misquoted the author, it is out of context relative to the headline and the article, which makes it even worse.

OUCH
I fixed it

[Abster2core]

If the FCC were to go after a Google or Apple because of this, imagine the hullabaloo that would be created if they included the NFL, NBA, MLB, NHL, etc., in their investigation. Particularly, since many of them are owned by communication companies. And all have no-poaching rules.

Let's not forget: amateur scholarship athletes do not have the right to even move freely among schools.

Many business have no-poaching strategies in place. Makes sense. Both for the employer or employee.

Being approached directly by a company opens yourself to the bigger payer. How many here would like it if the Yankees could just go to anybody? (Please exclude Yankee fans)

You, as an employee, have basically every right unless stipulated in your contract to approach just about anybody for a job.

Careful now. I would suggest that as an employer for, or an employee of the CIA, FBI, SEC, FCC, Homeland Security, Armed Services, etc., there are written and unwritten rules on 'poaching' that are more restrictive than what Google or Apple may have enjoyed.

[Hudson1]

Originally Posted by charlituna

Anti-trust is all about allowing and even promoting competition within a market. There are likely several laws under the Anti-trust umbrella that would be potentially violated. Including but not limited to laws against one person serving on the board of two companies in the same market (which is why Schmidt left the Apple board now that Google is creating an OS), laws against overly restrictive anti-competition clauses that prohibit a worker from hiring on with another company etc.

the sticky bit is of course proof that this practice was codified in any way. even just this alleged email. otherwise it's all really hearsay. Particularly if there were persons that voluntarily applied and were hired. That at least shows that there was no practice of not hiring from each other.

Frankly I think cold calling to be tacky so I have no issue with a practice not to do it. But my opinion is not law.

The article states there was not a prohibition from Apple and Google hiring employees from the other company. The prohibition was to not actively recruit them. It's also a stretch to say that Apple and Google are even in the same market though I suppose that is now changed with both producing a mobile phone operating system. However, Apple doesn't "sell" the iPhone OS nor does Google (but for different reasons).

What hasn't been brought up is the most likely reason this recruiting prohibition started in the first place -- to help prevent the transfer of technology between companies. There are laws against stealing technology, not just against market collusion.

[Abster2core]

Originally Posted by brucep

OUCH
I fixed it

So did I.

Thank you.

[schmidm77]

What's even more annoying is that we do everything we can to promote collusion among labor, in the form of unions, to prevent competition with cheaper, non-union labor, but once two companies agree to not poach each other's talent, people think the Justice Department needs to get involved.

[blogorant]

The more we learn about Apple's relationship with Google the more I think it hasn't been the best thing for the consumer. To what extent did either company hold back competitively where they otherwise might not have? I'm not talking conspiracy as much as the possibility of more of these "unwritten" or polite agreements or understandings.

Maybe Google would have played Android a bit differently? Developed a music store maybe?

[Wiggin]

I would think that the no-poaching agreement was a reasonable and necessary thing. Since Schmidt would have access to know which Apple engineers were working on which projects, he could easily use his position on Apple's board to make a list of top talent and hand it off to Google's recruiters to go after.

Imagine how much turmoil there would be on the board if Google started cold-calling Apple's top talent. There would be questions and concerns about where they got their list of target employees.

[FuturePastNow]

Originally Posted by Buddha56

Yes, that would be the work-around but we would have to reach out to our manager and get approval to speak w/any engineer whose company was on the list. I've seen folks get in trouble for ignoring this rule and just contracting them directly from an inquiry.

While we're on the subject and you seem willing to talk about it, what other companies were on that list besides Apple?

[Bageljoey]

Originally Posted by brucep

I had hoped apple and google could do great things together. Or is all this tension a media invention ?

My first thought was: "Oh well, so much for Goople" and I was just a touch sad. It seemed just a short while ago that this was just what the world needed to knock Microsoft down a few pegs... Then, of course, I remembered that MS seems intent on knocking themselves down a few pegs all on their own these days...

[Abster2core]

Originally Posted by blogorant

The more we learn about Apple's relationship with Google the more I think it hasn't been the best thing for the consumer. To what extent did either company hold back competitively where they otherwise might not have? I'm not talking conspiracy as much as the possibility of more of these "unwritten" or polite agreements or understandings.

Maybe Google would have played Android a bit differently? Developed a music store maybe?

Now that sounds like you are talking 'conspiracy'.

Suggest Reading: Board of Directors

Typical duties of boards of directors include

• governing the organization by establishing broad policies and objectives;
• selecting, appointing, supporting and reviewing the performance of the chief executive;
• ensuring the availability of adequate financial resources;
• approving annual budgets;
• accounting to the stakeholders for the organization's performance.

http://en.wikipedia.org/wiki/Board_o...nd_interest.22

Being involved in the day-to-day activity, e.g., in research, marketing, sales, et., is not the function, let alone any internal information that may come out of them, of a non-executive director like those being mentioned here.

[Dark-Kat]

Although I am American, I think America is one the stupidest countries on the planet. These companies agreed not to steal each other's talent. What's wrong with that? Isn't that ethical? On the other hand, had they been poaching (stupid word by the way) each other's employees at free will, imagine all of the lawsuits that our courts would be tied up with regarding trade secrets and such. Didn't Apple get into hot water recently for hiring an employee from one of their competitors regarding semi-conductors? If you don't steal employees from your competition you're in deep shiznah; if you do steal employees you're in deep shiznah! Being in business in 21st century America truly sucks!!! Especially if you're high profile company like Apple or Google.

[blogorant]

Originally Posted by Abster2core

Now that sounds like you are talking 'conspiracy'.

Suggest Reading: Board of Directors

Typical duties of boards of directors include

• governing the organization by establishing broad policies and objectives;
• selecting, appointing, supporting and reviewing the performance of the chief executive;
• ensuring the availability of adequate financial resources;
• approving annual budgets;
• accounting to the stakeholders for the organization's performance.

http://en.wikipedia.org/wiki/Board_o...nd_interest.22

Being involved in the day-to-day activity, e.g., in research, marketing, sales, et., is not the function, let alone any internal information that may come out of them, of a non-executive director like those being mentioned here.

I don't have a clue what you're talking about. My point was that A) the more info that comes to light about the relationship between Apple and Google B) the more it appears that the relationship may not have been in the best interest of the consumer. A relationship doesn't have to be a willful conspiracy or meet a legal definition to be detrimental to the market.

Had Google and Apple been all out full on competitors, where might both companies have directed research and development efforts? You can't say to some degree that the relationship didn't effect their individual decision making at all levels and in various departments.

[steviet02]

Originally Posted by blogorant

I don't have a clue what you're talking about. My point was that A) the more info that comes to light about the relationship between Apple and Google B) the more it appears that the relationship may not have been in the best interest of the consumer. A relationship doesn't have to be a willful conspiracy or meet a legal definition to be detrimental to the market.

Had Google and Apple been all out full on competitors, where might both companies have directed research and development efforts? You can't say to some degree that the relationship didn't effect their individual decision making at all levels and in various departments.

I agree with your point, completely. No one can deny that this type of relationship was symbiotic and prevented each other from doing some things they may have otherwise done had that relationship not been there. We'll now find out, I suspect, what type of competition there can be between the two.

[Hudson1]

Originally Posted by blogorant

I don't have a clue what you're talking about. My point was that A) the more info that comes to light about the relationship between Apple and Google B) the more it appears that the relationship may not have been in the best interest of the consumer. A relationship doesn't have to be a willful conspiracy or meet a legal definition to be detrimental to the market.

Had Google and Apple been all out full on competitors, where might both companies have directed research and development efforts? You can't say to some degree that the relationship didn't effect their individual decision making at all levels and in various departments.

Full on competitors at what? Google sells nothing to consumers. Apple, for the most part, only sells to consumers. Please be more specific.

[Abster2core]

Originally Posted by blogorant

I don't have a clue what you're talking about. My point was that A) the more info that comes to light about the relationship between Apple and Google B) the more it appears that the relationship may not have been in the best interest of the consumer. A relationship doesn't have to be a willful conspiracy or meet a legal definition to be detrimental to the market.

Had Google and Apple been all out full on competitors, where might both companies have directed research and development efforts? You can't say to some degree that the relationship didn't effect their individual decision making at all levels and in various departments.

That is what is called a conspiracy

As for my listing of the fiduciary responsibilities of the board members, if you think that there is "…some degree that the relationship didn't effect their individual decision making at all levels and in various department," then that also is alluding to a conspiracy.

Board Meetings are recorded. Discussing research/marketing/sales strategies would not be part of their discussions. To post otherwise and suggest "…that the relationship may not have been in the best interest of the consumer", is accusing them of a conspiracy.

[Buddha56]

Originally Posted by FuturePastNow

While we're on the subject and you seem willing to talk about it, what other companies were on that list besides Apple?

I'm not going there but I can tell you that the list was dynamic and changed often with companies coming on and going away and coming back on the list. For what reasons, we were never told.

[steviet02]

Originally Posted by Abster2core

[B]That is what is called a conspiracy[B]

As for my listing of the fiduciary responsibilities of the board members, if you think that there is "…some degree that the relationship didn't effect their individual decision making at all levels and in various department," then that also is alluding to a conspiracy.

Board Meetings are recorded. Discussing research/marketing/sales strategies would not be part of their discussions. To post otherwise and suggest "…that the relationship may not have been in the best interest of the consumer", is accusing them of a conspiracy.

Do you think Google had unprecedented access to apple and their engineers? Do you think that was not aided by the fact that Schmidt was on the board?

[federmoose]

Originally Posted by Dark-Kat

Although I am American, I think America is one the stupidest countries on the planet. These companies agreed not to steal each other's talent. What's wrong with that? Isn't that ethical? On the other hand, had they been poaching (stupid word by the way) each other's employees at free will, imagine all of the lawsuits that our courts would be tied up with regarding trade secrets and such.

A few things here:
1) "America" is not a country. The "United States of America" is a country.
2) Competitively speaking, the true harm is not to the consumer, but the engineers themselves. In a "no-poach" environment, the engineers are much more likely to be paid less than they otherwise would be (given that salary competition is nearly moot after a hire). As an engineer, I find this result to be slightly annoying (though I'm not sure it should be a federal issue).
3) Nearly EVERY engineer will sign a contract on or before his first day at work saying he won't work for a competitor for X number of months after leaving the company. In other words, there would be very few lawsuits. The only lawsuits I could think of is a definitional one: "is company Z really a competitor of company Y"? And you really only need one of those suits...

[Abster2core]

Originally Posted by steviet02

Do you think Google had unprecedented access to apple and their engineers? Do you think that was not aided by the fact that Schmidt was on the board?

Absolutely not.

As Schmidt and Apple have already stated, Schmidt would recluse himself if there was deemed a conflict of interest.

If anything, Apple would have been even more cautious discussing 'products' at a board meeting. Particularly, if it concerned future developments.

Board members, in particular, outsiders, i.e., non-Apple Executives/Employees, would be even more precluding. A Board Member of a public-held company in particular has fiduciary responsibilities to the respective shareholders. Using that position or special relationships gained from it for personal gain or gain for any company they were associated would be suicidal.

To suggest otherwise is tantamount to suggesting collusion or conspiracy on the part of the members of the board.

[blogorant]

Originally Posted by Hudson1

Full on competitors at what? Google sells nothing to consumers. Apple, for the most part, only sells to consumers. Please be more specific.

Yes, the lion's share of Google's revenue currently is derived from ad search. Google is most definitely a consumer company even though they have chosen to wait to directly monetize products and services such as Chrome, Desktop, Earth, Finance, Gmail, Goog-411, Images, Maps, News, Toolbar, Video, YouTube, Blogger, Apps, Picasa, Talk, Voice, etc.

I offered the examples of Android and a Google music store earlier. How might Google have handled the Android rollout if it were treating Apple as full on competitor? Might it have been a bit more fierce than it was? Might they have taken advantage of the intense desire of the other carriers to have an iPhone alternative?

Everyone else has a music store, wouldn't it make sense for Google to leverage its customer base with one?

Again, I'm not saying there were any organized conspiracies here... Just something to think about.

Originally Posted by Abster2core

[B]That is what is called a conspiracy[B]

As for my listing of the fiduciary responsibilities of the board members, if you think that there is "…some degree that the relationship didn't effect their individual decision making at all levels and in various department," then that also is alluding to a conspiracy.

Board Meetings are recorded. Discussing research/marketing/sales strategies would not be part of their discussions. To post otherwise and suggest "…that the relationship may not have been in the best interest of the consumer", is accusing them of a conspiracy.

Our systems have indicated an infinite loop condition with Abster2core. Attempts to communicate will now cease.

[Hudson1]

Originally Posted by blogorant

Yes, the lion's share of Google's revenue currently is derived from ad search. Google is most definitely a consumer company even though they have chosen to wait to directly monetize products and services such as Chrome, Desktop, Earth, Finance, Gmail, Goog-411, Images, Maps, News, Toolbar, Video, YouTube, Blogger, Apps, Picasa, Talk, Voice, etc.

I offered the examples of Android and a Google music store earlier. How might Google have handled the Android rollout if it were treating Apple as full on competitor? Might it have been a bit more fierce than it was? Might they have taken advantage of the intense desire of the other carriers to have an iPhone alternative?

Everyone else has a music store, wouldn't it make sense for Google to leverage its customer base with one?

Again, I'm not saying there were any organized conspiracies here... Just something to think about.

Maybe I'm slow or just confused. How would Google be more of a competitor to Apple if they started charging consumers for things that they now give away for free? Microsoft, as we'll all recall, were considered to be unfairly competing by NOT charging for software but instead bundled for free.

Also, I don't understand the Android situation, either. How does anyone know whether Google held back on Android (to Apple's benefit)? There's no evidence that I'm aware of that suggests so.

[jeffharris]

So, what's the problem with two companies making an agreement like that? It's not like they're out price fixing or strong-arming competitors.

[steviet02]

Originally Posted by Abster2core

Absolutely not.

As Schmidt and Apple have already stated, Schmidt would recluse himself if there was deemed a conflict of interest.

If anything, Apple would have been even more cautious discussing 'products' at a board meeting. Particularly, if it concerned future developments.

Board members, in particular, outsiders, i.e., non-Apple Executives/Employees, would be even more precluding. A Board Member of a public-held company in particular has fiduciary responsibilities to the respective shareholders. Using that position or special relationships gained from it for personal gain or gain for any company they were associated would be suicidal.

To suggest otherwise is tantamount to suggesting collusion or conspiracy on the part of the members of the board.

You are not tuning in to the way things actually work, you're tuning in to the way it 'should' work. Reciting a manual or some other piece of material is useless, people break and bend the rules all the time.

[blogorant]

Originally Posted by Hudson1

Maybe I'm slow or just confused. How would Google be more of a competitor to Apple if they started charging consumers for things that they now give away for free? Microsoft, as we'll all recall, were considered to be unfairly competing by NOT charging for software but instead bundled for free.

Also, I don't understand the Android situation, either. How does anyone know whether Google held back on Android (to Apple's benefit)? There's no evidence that I'm aware of that suggests so.

I was merely illustrating for you that Google is very definitely a consumer driven company despite their current revenue picture. It's not a matter of giving products and services away "free" its which areas and markets a company chooses to focus on regardless of when and how you monetize.

Companies that are very friendly with one another MAY choose to avoid stepping on each others toes in competitive terms. This MAY ultimately benefit the companies but MAY not be in the best interest of the consumer. We don't know that Google held back on Android. I'm just wondering how their rollout MAY have been different had the companies not been so friendly with one another.

[Abster2core]

Originally Posted by steviet02

You are not tuning in to the way things actually work, you're tuning in to the way it 'should' work. Reciting a manual or some other piece of material is useless, people break and bend the rules all the time.

And you base this on what evidence?

Sure, there are rogues but unilaterally painting the world as such is ludicrous.

Of the thousands of companies guided by the SEC, you are inferring that every company is conspiring to be unlawful all the time. To do so, would suggest that your parents, relatives and friends are all involved in some sort of illegal activity as well.

Right now, public traded companies are under the scrutiny of a dozen state and federal agencies. Some are undoubtedly involved in some form of unscrupulous activity. But if there was one company that would best ensure that they were more than above board, it would be Apple. Not because they have engaged illegal meanderings, which the haven't, but because there are so many idiots out there making unfounded, misguided and libelous accusations; that not to do something, the governing agencies a equally deemed guilty.

If you have any evidence to the contrary, I would certainly be more than pleased to examine it. Just make sure that it is collaborated and/or published; not some bloggers comments that hides behind the anonymity of the internet.

[Hudson1]

Originally Posted by blogorant

I was merely illustrating for you that Google is very definitely a consumer driven company despite their current revenue picture. It's not a matter of giving products and services away "free" its which areas and markets a company chooses to focus on regardless of when and how you monetize.

Companies that are very friendly with one another MAY choose to avoid stepping on each others toes in competitive terms. This MAY ultimately benefit the companies but MAY not be in the best interest of the consumer. We don't know that Google held back on Android. I'm just wondering how their rollout MAY have been different had the companies not been so friendly with one another.

It's not illegal to not compete or avoid stepping on a competitor's toes. It's illegal to collude to not compete via price fixing, market division, etc. These are market laws as they have the potential to effect consumers and other customers. I'm not sure what the applicability is to hiring, though.

[steviet02]

Originally Posted by Abster2core

And you base this on what evidence?

Sure, there are rogues but unilaterally painting the world as such is ludicrous.

If you have any evidence to the contrary, I would certainly be more than pleased to examine it. Just make sure that it is collaborated and/or published; not some bloggers comments that hides behind the anonymity of the internet.

Google Maps and Google Mobile App are starters. They had access to Apples API's that no other company has had access to.