Palm rejected Apple's no employee poaching offer - report
Ed Colligan, the former chief executive of Palm, reportedly rejected an offer years ago from Apple co-founder Steve Jobs to agree to not hire each others' employees.
The information comes from a U.S. Justice Department investigation that obtained communications between the two CEOs, according to Bloomberg. After rejecting the offer, Colligan reportedly told Jobs that what he proposed was "likely illegal."
The conversation took place in August 2007, just after the launch of the iPhone, and when Palm appointed Apple's former senior engineering VP, Jon Rubinstein, as executive chairman.
According to the communications between the two, Jobs told Colligan he was concerned that Rubinstein, as a former Apple employee, was recruiting existing Apple employees. "We must do whatever we can to stop this," Jobs reportedly said.
The documents say that Colligan told Jobs he considered the proposal, but ultimately decided against it.
"Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal," Colligan said to Jobs, according to the communications.
However, Jobs' specific proposal was not included in the communications. It was only referenced and discussed by the two executives.
"Jobs said Apple had patents and more money than Palm if the companies ended up in a legal fight, according to the communications," Bloomberg reported. Apple spokeswoman Katie Cotton declined to comment on the matter and Jobs did not return e-mails.
Since Rubinstein came on board, Palm has hired a number of former Apple employees. Also in 2007, Apple's former chief financial officer, Fred Anderson, joined as a general board member. Most recently Jeff Zwerner, a former creative director from 2001 to 2003 at the Cupertino, Calif., company, now serves as Palm's senior vice president.
The proposal from Jobs sounds similar to a informal agreement that was reportedly held between Apple and another rival, Google. Earlier this month, it was revealed that the two companies shared an agreement to not poach each others' workers while the Google CEO, Eric Schmidt, served on Apple's board. It is believed the unwritten agreement may have sparked an antitrust investigation from the U.S. Justice Department.
The information comes from a U.S. Justice Department investigation that obtained communications between the two CEOs, according to Bloomberg. After rejecting the offer, Colligan reportedly told Jobs that what he proposed was "likely illegal."
The conversation took place in August 2007, just after the launch of the iPhone, and when Palm appointed Apple's former senior engineering VP, Jon Rubinstein, as executive chairman.
According to the communications between the two, Jobs told Colligan he was concerned that Rubinstein, as a former Apple employee, was recruiting existing Apple employees. "We must do whatever we can to stop this," Jobs reportedly said.
The documents say that Colligan told Jobs he considered the proposal, but ultimately decided against it.
"Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal," Colligan said to Jobs, according to the communications.
However, Jobs' specific proposal was not included in the communications. It was only referenced and discussed by the two executives.
"Jobs said Apple had patents and more money than Palm if the companies ended up in a legal fight, according to the communications," Bloomberg reported. Apple spokeswoman Katie Cotton declined to comment on the matter and Jobs did not return e-mails.
Since Rubinstein came on board, Palm has hired a number of former Apple employees. Also in 2007, Apple's former chief financial officer, Fred Anderson, joined as a general board member. Most recently Jeff Zwerner, a former creative director from 2001 to 2003 at the Cupertino, Calif., company, now serves as Palm's senior vice president.
The proposal from Jobs sounds similar to a informal agreement that was reportedly held between Apple and another rival, Google. Earlier this month, it was revealed that the two companies shared an agreement to not poach each others' workers while the Google CEO, Eric Schmidt, served on Apple's board. It is believed the unwritten agreement may have sparked an antitrust investigation from the U.S. Justice Department.
Comments
It happens in business all the time. Palm is in the weaker position, so it's expected that they would want to hire people from a more successful company.
Hell, Chrysler hired Toyota's Jim Press (formally the President of Toyota North America) back in 2007... not that it helped them out any
I don't blame Colligan. I wouldn't have agreed to it either unless it was some legally binding non-compete clause in an employee's contract. Jobs was doing what was in the best interest of Apple (keeping them on top), and Colligan was doing what was in the best interest of his company -- even if it means taking employees from his competitor.
It happens in business all the time. Palm is in the weaker position, so it's expected that they would want to hire people from a more successful company.
Hell, Chrysler hired Toyota's Jim Press (formally the President of Toyota North America) back in 2007... not that it helped them out any
Exactly, as I just stated a while ago. This has been happening for the longest, not to say that the moves aren't wise ones, but no results as of yet, maybe a little bit from the buzz with the Palm Prē, but other than that, nothing.
Then again, I don't see this as any worse than a union saying you can't work here unless you join the union first. Either case the potential employee is being interfered with in seeking employment.
If these types of agreements are illegal, is there any difference between agreeing not to hire anyone coming from the other company vs agreeing not to actively recruit them (cold calling)? The difference would be that in the 2nd example the employee would be free to look for work at the other company if they chose to, but in the 1st they would not.
Then again, I don't see this as any worse than a union saying you can't work here unless you join the union first. Either case the potential employee is being interfered with in seeking employment.
I think there's a tremendous difference between "refusal to hire" and "refusal to recruit". It's likely the DOJ would consider them quite different as well but then again, I'm not in the losing business of predicting what the government thinks.
As for unions, they seem to be exempt from anything involving anti-trust laws.
Hell, Chrysler hired Toyota's Jim Press (formally the President of Toyota North America) back in 2007... not that it helped them out any
Exactly! Palm hired all that Apple secondary help and what did it get them? According to customer satisfaction, a secondary product closely resembling the iPhone. Go Figure!
Interestingly enough this revelation may help Apple's case in terms of the agreement between Google and Apple. Apple had a connection to Google but did not have a connection (via the board) to Palm. I wonder if this could show that Apple was willing to consider the same deal with a variety of similar-sized firms, thus making it a public offer and not an inside deal?
That might be true, but wouldn't it land Apple in a whole other "bag of hurt" if it really is illegal to have such a deal?
University and pro sports teams do it all the time, with and without contracted players.
Not to mention employment contracts that say you can't go work for a competitor for X years if you leave your job.
Interestingly enough this revelation may help Apple's case in terms of the agreement between Google and Apple. Apple had a connection to Google but did not have a connection (via the board) to Palm. I wonder if this could show that Apple was willing to consider the same deal with a variety of similar-sized firms, thus making it a public offer and not an inside deal?
It's amazing how people try to make excuses or find some 'silver lining' message in this stuff when apple is involved. It's not a public offer of any kind, it's a wink wink nod nod type of back room deal that does happen often, but typically it's a no poach deal rather than a no hire deal. A no hire deal is illegal from the best I can tell because you are discriminating against a person who is qualified for a position and willing to apply/fill that role.
University and pro sports teams do it all the time, with and without contracted players.
And it's called collusion, supposed to be against the rules in pro sports.
Besides the Pre and WebOS what else does Palm offer as value?
Does Apple have this kind of agreement with RIM or is this just for California companies?
Interestingly enough this revelation may help Apple's case in terms of the agreement between Google and Apple. Apple had a connection to Google but did not have a connection (via the board) to Palm. I wonder if this could show that Apple was willing to consider the same deal with a variety of similar-sized firms, thus making it a public offer and not an inside deal?
I'd say the 'deal' with Google is less controversial, as the boardroom link could be used/seen to be used as an unfair advantage in access to staff for the purpose of poaching; the 'deal' with Palm would've been with an unlinked company, so they have the same opportunity to access staff as any other third party.
I don't like the idea of going to work for one company, and finding that agreements at board level have reduced my opportunities for advancing myself by moving to a competitor; it also reduces any reason for my employer to incentivise me to stay with him if he can agree with other companies in the industry not to even consider employing me.
If Palm doesn't come back from the brink with the Pre then their employees will be lining-up to work at Apple.
Besides the Pre and WebOS what else does Palm offer as value?
Does Apple have this kind of agreement with RIM or is this just for California companies?
webOS has enough potential to keep them afloat
Then again, I don't see this as any worse than a union saying you can't work here unless you join the union first. Either case the potential employee is being interfered with in seeking employment.
As for unions, they seem to be exempt from anything involving anti-trust laws.
I know it's very popular with some to engage in union bashing at any opportunity, but those who do, do so out of either an ulterior motive or out of complete ignorance of history. The latter case is an egregious example of the failure of the education system in this country. The former represent the people who are exactly the reason why unions are necessary.
Without unions, working condition in this country would not be, and were not, any better than the conditions in China today. (In fact, before unions, working conditions were in this country, arguably worse than in China today.) Unions are largely responsible for the prosperity of the U.S., particularly in the post World War II era. Union organizers died, yes died, killed by company 'goons', and in some cases government forces (law enforcement and military), so that the majority of working Americans could have better lives. Their sacrifices are no less important to the greatness of this country than any other "patriot" who died defending this country and its people.
So, yes, unions are rightfully exempt from laws intended to limit the ability of rapacious corporations from imposing their will on society because unions serve exactly the same ends as anti-trust laws.
webOS has enough potential to keep them afloat
Probably not 'afloat', but it will be the primary bait for the ultimate buyout by someone like Nokia or MS.
When PALM gets low enough, I'll buy some to position for its ultimate buy-out.
I know it's very popular with some to engage in union bashing at any opportunity, but those who do, do so out of either an ulterior motive or out of complete ignorance of history. The latter case is an egregious example of the failure of the education system in this country. The former represent the people who are exactly the reason why unions are necessary.
Without unions, working condition in this country would not be, and were not, any better than the conditions in China today. (In fact, before unions, working conditions were in this country, arguably worse than in China today.) Unions are largely responsible for the prosperity of the U.S., particularly in the post World War II era. Union organizers died, yes died, killed by company 'goons', and in some cases government forces (law enforcement and military), so that the majority of working Americans could have better lives. Their sacrifices are no less important to the greatness of this country than any other "patriot" who died defending this country and its people.
So, yes, unions are rightfully exempt from laws intended to limit the ability of rapacious corporations from imposing their will on society because unions serve exactly the same ends as anti-trust laws.
THANK YOU!!
I second and third that.
Its hilarious to watch the mini-Ayns in the tech world delude themselves into thinking they have any leverage as individuals against mega-corporations when it comes time to bargaining. They take what they're offered, keep their mouths shut out of fear, and blame immigrants when they're down-sized.
Add to that that EVERY benefit they take for granted were fought for with the blood of unionists before they were born.