Big Tech Companies Agree To Pay Up Over Hiring Collusion

Legal Issues

from the as-they-should dept

Last month, we pointed out that Google, Apple, Adobe and Intel would almost certainly settle, rather than face an ongoing lawsuit concerning their collusive hiring practices, in which they promised not to poach employees from one another in an effort to keep employees longer and (more importantly for them) to keep salaries down. That has now come to pass, with the four companies agreeing to pay out $324 million to settle the charges. This is good. As we noted in our original story, the hiring collusion was shameful and, worse, antithetical to the kind of job shifting and idea sharing that helped make Silicon Valley into Silicon Valley.

For many years, I’ve given a series of talks (often to foreign executives and government officials) about why Silicon Valley turned into Silicon Valley. Everyone assumes it’s the obvious stuff about lots of venture capital or access to good colleges. And so they try to mimic that, back where they came from. But as you dig down into the Silicon Valley story, you quickly realize that, while those things helped, the true secret sauce is the easy job mobility here, with people constantly shifting jobs — and sharing ideas across many different companies. What comes out of that is more innovation and the important big breakthroughs that have made this entire industry possible. A few top execs, led by Steve Jobs, tried to throw sand in those wheels, stupidly believing that it was more important to protect poaching of their own employees, ignoring how that also limited their own ability to cross-fertilize ideas and bring in top performers from other companies.

The history of Silicon Valley is littered with stories of job hopping, employment diasporas and the like. Look at how many successful companies that were formed in the past decade have some connection to PayPal, for example. Easy job mobility is a key factor in Silicon Valley to allow innovation to happen, and hopefully this ugly incident puts the issue behind the tech industry, and they can go back to actually innovating.

Filed Under: collusion, hiring, poaching, tech companies
Companies: adobe, apple, google, intel