As it turns out, the relationship between Apple and Palm is even less amicable than we already thought it to be. Bloomberg got their hands on communications between Ed Colligan, then-CEO of Palm, and Steve Jobs in which Jobs made a proposal in which the two companies would promise to refrain from hiring each other’s employees. Colligan, however, rejected the proposal, calling it wrong and “likely illegal”.
This proposal was offered by Jobs to Colligan in August 2007, when Jon Rubinstein, who lead the iPod devision when he left Apple in 2006 and who had worked with Jobs for over 15 years, joined Palm to help in reinventing the company. Jobs told Colligan that he was concerned Rubinstein would hire Apple employees. “We must do whatever we can to stop this,” Jobs said in the communications.
Exact details of the proposal are unknown, but Jobs did say that “Apple had patents and more money than Palm if the companies ended up in a legal fight”. An Apple spokesperson declined to comment, and Steve Jobs did not respond to an email from Bloomberg. Palm did not comment either.
According to the communications, Colligan stated he thought about “offering hiring concessions”, but in the end, he 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,” he told Jobs.
Agreements like the one proposed by Jobs are usually prohibited by antitrust laws, because they hinder competition. “It’s a form of competition that is usually protected by antitrust laws that prohibit agreements that restrict competition,” explains Donald Russell, an antritrust lawyer who worked at the Justice Department for more than twenty years.
A similar possible deal between Apple and Google is currently under investigation by the DOJ, and Daniel Rubinfeld, a former deputy assistant attorney general for antitrust, advises the DOJ to investigate this Palm-Apple issue as well, despite the fact it fell through. “If I were at DOJ, I would definitely be interested,” said Rubinfeld. The DOJ declined to comment.
I wonder if Jobs throws chairs too…
IKEA, one would guess.
IKEA? Aeron chairs maybe.. or Barcelona
At least private chair throwing is all Ballmer did. You have to have some real insecurity issues to try and contact another company and ‘agree’ not to let employees from one company join another in a free labour market.
This made me laugh
Not the story, but what’s underneath. What’s the algorithm that comes up with related articles? I ask because this one listed a Richard Stallman sexist speech, a Gnome vs KDE article, and a Win7 vs Snow Leopard article. Ok, so the last one at least references Apple, but what the heck do the others have to do with Apple and Palm hiring decisions? They’re all possibly illegal?
Edited 2009-08-21 07:07 UTC
They were all posted in the same category.
Satan is walking the Earth, a 20 kilometer asteroid is hurtling toward London, and pigs have been seen flying over the mid-West.
Ya know, here is another example of not knowing when to speak or what to say… Why would Colligan even come out with this? What’s the point now?
The author really seems to be trying to shoe-horn what went on between Jobs and Colligan into some sort of illegal activity… which never happened.
It’s a leak, but how do you know it’s Colligan’s leak? Though it is funny timing since he just left Palm and joined Elevation Partners yesterday…
EXACTLY!
Colligan didn’t come out with anything. Bloomberg “found” it. In fact it even says he declined to comment when contacted about this.
I can see that Apple refused comment, but how did Bloomberg “find this?” (Ixnay on good reporting).
This article makes me feel like hurling my Mac mini and iPod touch into the garbage can, and maybe even my hackintosh netbook too for having an Apple sticker on it. (I’m not going to do that though, it’d be kind of irrational. 😉 )
I frankly believe this would be only possible in USA. In europe unions wouldn’t allow this kind a behavior and quite frankly it makes me sick also. I really hope DoJ fines Apple for clear sign of been ring leader but also Google and other company that took part of such a disgusting scheme. And this from man who thinks socialists are bunch a communists and green party bunch a tree hugging communists.
What? The Palm Ceo was right, it is illegal to do that in the United states. As far as I know, its possible to do illegal things in any country, so far as the illegal act is physically possible and there are laws against it.
no, it’s not illegal at all. I’ve worked at several companies that won’t hire from business partners or competition… it’s considered un-sportsman like.
The vast majority of business is more like sports than like “war”. While industries over all are “pure capitalism” there are pockets where a bunch of related companies settle down. Just like in sports, playoffs are only interesting if teams are evenly matched.. imagine if somebody could “buy their team” in the middle of the playoffs and get the other teams playbook too (we have salary caps to deal with that!). Sports wouldn’t be “fun” then.
I the same way Jobs could personally sue each employee that leaves for any feature in Pre that “looks like” an iPhone feature.. heck they could be sued for having the Apple internal phone directory after leaving they’re using to call their buddies. They can dig in the dirt and accuse their employees of cheating and make a nasty workplace, or the bosses can agree to get their teams elsewhere and avoid appearance of spying on each other.
I think there is a difference in deciding as an individual company not to hire employees from company X, versus making a verbal agreement with company X to not hire each other’s employees.
It is also possible to have a non-compete clause in ones contract, though I think the legality of those differs from state to state, but I’m pretty sure they’re legal in Cali, as I know I’ve signed one before
They are illegal in California.
http://www.eweek.com/c/a/Mobile-and-Wireless/Apples-Jobs-Wanted-a-G…
Well, working for a company exactly like that, the reason it’s done is not sports vs war. It’s about making sure that people stay put. In Europe it’s not that common, while in American companies, even in their European subsidiaries, it’s almost a rule.
Take IBM vs HP, they will turn down a actively searching employee(I have friends in both and I am not talking about luring people away), if the other company disagrees.
This seems silly at best to me.
Almost every employer I’ve worked for over the years requires you to sign an agreement that says you won’t be involved in any action that could be viewed as ‘recruiting’ your past co-workers to a different company.
It is also not uncommon to have a gentleman’s agreement between companies that they won’t hire the other’s talent away, etc.
Whether it is legal or not makes no difference to me.
Apple is not unique in this regard.
Yes, but those are contracts between one person and another.
This would be a deal over people’s heads. That’s the difference.
These sorts of “deals over people’s head’s” are done all the time when say one company buys out part of another company, which leads to the question “Is it considered to be OK as long as money changes hands?”
In a more people oriented countries(socialist, if you are a hardcore capitalist), that would allow the employee to terminate his work contract on the basis of changing essential parts of the contract. And the employer is obliged to negotiate and sign a new contract with the person.
…uting and Steve Jobs is the boss.
http://theappleblog.com/2009/07/20/suit-alleges-apple-in-bed-with-t…
– Never look at the competence.
– Never be seen with competence.
– Don’t go to competence places.
– Always being available for Apple is your life not a pastime
– Appointments of Steve Jobs must absolutely be respected.
– Steve Jobs must be treated with respect.
– When asked for any information, the answer must be the truth.
– Money cannot be appropriated if it belongs to others or to other families.
– People who can’t be part of Apple: anyone who has a close relative in competitors, anyone with a two-timing relative in Apple, anyone who behaves badly and doesn’t hold to Steve Jobs values.
Really. Why all this patent and copyright hell is legal these days? Everything is becoming worse, we are entering the Digital Middle Ages as innovation and competence is disappearing.
of seeing his people run away, if Jobs ends up asking Colligan for mercy.
How amusing!
I don’t know if mere talk (earnest talk, not just idle talk) is illegal without actually doing the deed. For some laws, making a propsal (in earnest) itself is illegal regardless of whether the proposal is ever implemented.
A trial would be time consuming and messy. Let’s just have the EC fine Apple 1.5 billion for proposing collusion with Palm, then fine Apple and Google 1.5 billion each for the Apple/Goole collusion, and we can just move on, secure in the knowledge that justice was done. :p
The EC can only do that if such agreements hinder competition. Is Google’s dominant position in its market becoming much stronger simply because they can’t poach Apple’s employees and vice versa?
Your (and Palm’s) definition of collusion is just a little too wide.
Whether something “hinders competition or not” is simply based on the EC’s say-so. I don’t expect them to say so in this, since the companies involved are the EC’s blessed children. If Intel or Microsoft were doing these things, the fines would have already been levied.
Some might see this as collusion and cartel like but how is it any different to unions restricting supply of labour and pushing up the price of labour. If one is going to have labour unions and allow the sorts of laws in some places which call for compulsory unionism – then at the same time it would be consistent to then allow companies to have an agreement not to poach each others talent.
It remains to be seen if the law allows collusion of this sort between companies.
Edited 2009-08-22 17:53 UTC
In the UK it is pretty common practice to have clauses in employment contracts that prohibit you from leaving and moving to direct competitors for a certain period after employment finishes. As such, I don’t see this as an issue…
The difference is, that is a contract that YOU sign saying that YOU won’t leave for a competitor.
That is different from your previous employer making agreements over your head with other potential employers to essentially blacklist you if you try to leave.
Do you have confirmation that the employees in question did not already have such a clause in their employment contracts? If not…
Having interned at an “executive placement/search company” (i.e. headhunters), I know this isn’t a case of an Apple employee freely applying for a Palm job – this is likely to be poaching.
Anti-poaching agreements between companies essentially prevent companies from headhunting the other’s employees – i.e. unsolicited enticements, calls for interviews, etc.
If Palm and Apple signs something like this, it doesn’t prevent an Apple employee from applying for a job in Palm. It just prevents Palm from going after an Apple employee. And vice versa. I don’t see how this is illegal; it’s certainly not in Palm’s (the clear underdog) favour in any case.
Its pretty hard for companies to get top engineers, designers, etc. without headhunting. The most qualified candidates usually aren’t looking for a job, because people usually look for a new job when:
a) they find themselve incompatible in a company, or the prospects for them in the company isn’t that great, or something along those lines. This doesn’t apply for the sort of employees Palm is looking; Apple treats its talent well.
b) they want to try something new – but considering Palm is merely designing a competing product, its unlikely they will consider Palm.
An anti-poaching agreement only makes sense when this comes in a way of inter-company business (e.g. Google and Apple), and when the company isn’t in a huge need for such talent. Apple needs to dangle way larger carrots in Palm’s way to get it to agree to such a one-sided arrangement.
…piss on Apple and everything they stand for.
Do you think all the Apple shareholders know that there is a completely insane fascist running the company? Hey, to each his own.