IT Employment

Google, Yahoo, Genentech, and others investigated for hiring practices

In an area and in an industry that is famous for poaching top talent, companies in Silicon Valley are facing investigation into their monopoly-type hiring practices.

According to a piece by Steve Johnson, Elise Ackerman, and Sue McAllister for the Mercury News, the U.S. Justice Department is turning up the heat on allegations that some Silicon Valley companies are acting monopolistically in their hiring practices. Specifically, they are investigating whether Google, Yahoo, Apple, Genentech, and other tech companies conspired to keep other companies from poaching their top talent.

Tech recruiters in the valley have been poaching talent from other companies for years. In fact, the better you were at wooing top personnel from other companies, the more valuable you were as a recruiter.

Now the allegation is that Google, Yahoo, etc., are negotiating under-the-table agreements NOT to poach from specific companies, agreements usually made in deference to marketing partners. However, the practice may be illegal, in that it breaks anti-trust laws.

If two or more companies agree to avoid poaching employees from the same list of companies, it could constitute anti-competitive collusion under federal law. Critics say that non-poaching agreements could potentially limit the career opportunities of employees, becoming, in essence, indentured servitude for the workers.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

18 comments
ByteBin-20472379147970077837000261110898
ByteBin-20472379147970077837000261110898

and only about half of college grads even able to find work, this would be a bad thing to keep higher companies from doing this. If they aren't shuffling around already-employed people, then they would be able to hire on college grads and others who NEED a job - ie. Don't already HAVE a job! And put more people to work. Companies that want fresh ideas should find NEW people to hire. Not the same ones that already are working and been in the loop. It's hard to get into a good job if the companies are only interested in hiring a big-wig from another company. Any other job applicant would then have no chance in hell of landing that job, no matter how well they could do, because they weren't working as an elite in another company of interest!

n3ur0
n3ur0

How much DoJ getting by enforcing this? If an employee is no more willing to work with an organization, and switching to other make one sensible point, the job he is doing doesnt make it upto him either on quality or on money, and he has all the reason to quit it. In hard time will the DoJ guarantees that these company wont fire him? And these company give him money he deserves, if DoJ cant, than an employee has all the right to change the job. Human aspect is, If you are good at work, and some company hired you, but you realize later that this organization will ruin his career because the work you doing too low for you, Is there any other option than changing the job.

asia.williams
asia.williams

It appears the article is saying there is a joint venture between these conglomerates not to hire each other's employees. This will allow for a decrease in salary and perks. Indentured Servitude is a term that describes work that yields little to no money. Certainly the term was used for hyperbole, but respective to the employee's current salary, it may be the appropriate term.

HiringGuru
HiringGuru

As a Current Microsoft Tech recruiter it does'nt surprise me and it's about darn time. (at least until July 4th- part of last layoff) It's more like a hands-off list that really holds no weight in court and most major tech companies use them as a unofficial agreements mostly when they work to together on a project or some silly sales contract that hurts recruiting but it's all about the signature on the dotted line and money. I never checked the list because as a person with experience involving the Sherman Anti-trust act this area in corporate america is really really gray.

jck
jck

an agreement between two companies is wrong in that it limits the opportunity for employees to do so. Then how can the law allow a company to look at an employee and force them to sign an employment agreement (a contract) that says they will not compete? Radio and television do that all the time. Kind of ironic. Companies can't get together and do it, but they can directly do over their own people without fear of tort. Gotta love America.

jvdavis456
jvdavis456

I recently finished a business class in which we discussed collusion and anti-trust laws. From what I gather from this article and what I learned from that class, this situation seems to meet the criteria, for at least a probe into the activities of these companies. However, to say that workers are indentured servants to their companies is a big leap. Sure, many are under contract for a set period of time, but that is where the similarity ends. Employment contracts usually have stipulations allowing for premature departure, and as long as the employee is willing to accept those consequences then what is keeping them there? It?s not like they?re going to be put before the lash or hanged for leaving as was the practice in the 17th and 18th centuries when this was a popular means of staffing a plantation. If the intention with that statement was to illicit comment then you've succeeded, but through the use of logical fallacy, and you should consider it an empty victory.

CharlieSpencer
CharlieSpencer

A company can be investigated for agreeing NOT to hire away another company's employees? It's considered anti-competitive to agree the other guys can KEEP their talent? Besides, what kind of poorly run company hires employees of this caliber without a non-disclosure / non-competing agreement? It's routine for contracts to specify employees must wait a year before beginning work for a competitor. It's understandable why a company wouldn't want to hire another firm's talent if the new hire is going to get paid for a year before they can do any actual work. "Critics say that non-poaching agreements could potentially limit the career opportunities of employees, becoming, in essence, indentured servitude for the workers." Last time I check, Company A was under no obligation to offer Company B's employees a better job.

csmith.kaze
csmith.kaze

So, there is a law in California saying you can't quit your job now? If you aren't unhappy then it isn't indentured servitude; if you are unhappy, quit. that simple. These people are almost always the smartest in the world in their fields, I am sure they can get any other job they want. Don't whine about your "indentured servitude", especially since it isn't.

mitzampt
mitzampt

Well it's not quite that... they are actually hiring people from smaller companies, not from each other. Another point is that graduates, good ones, still have an equal (theoretical) chance to join one of the big companies, but are more likely to be hired by smaller companies and be stuck with the option of one big company... This is not bad, but it's undesirable: not all of these big companies neet special talents of all IT fields, so, for example, if Google promotes people with good skills in the field of search engines, but a guy with those skills works for a company from which only Yahoo hires, both that guy's hopes and skills fly with the wind... Workforce market should be free

mitzampt
mitzampt

..this is about protecting the company's secrets and image, and those contracts have an 'expiration date'. Instead, this agreement is more about a long term deal, and gives them the oportunity to hire easier and 'cheaper' elite.

mitzampt
mitzampt

But this is about smaller companies which don't impose non-disclosure/non-competing agreements, because usually, if you are very good, you wouldn't work for a company that tells you "you can't work for bigger companies". So if a big company agree not to hire from certain small business, that means that 'the-guy-that-just-quit-me' can't work on a position he's qualified for at the company he desires... This is why people are always concerned: instead of free competition, some big guys cut the pie for themselves, in a way or another, without asking the necesary opinion.

Marty R. Milette
Marty R. Milette

The point isn't that you can't quit -- it is that if you quit, you're blacklisted from all companies participating. The idea is to prevent you from moving from one company in the cartel to another.

asia.williams
asia.williams

My sentiments exactly. The IT corporate world is about saving a dollar these days. All of these corporations want to protect their information and remain "glowing" in the consumers eyes. Why would the users or consumers of the product care if the elite are not paid their worth. From the consumer's standpoint, most feel they are overcharged for the services they obtain (whether it be via currency, cyber intrusions, et al). Black balling these employees exerts a control over them which can be enforced where it hurts the most...the wallet. Subjectively, I do not agree with these practices. Nonetheless, the IT world has a long way to go, in many aspects, when it comes to regulating the cloud, hiring practices and disclosures, to name a few.

CharlieSpencer
CharlieSpencer

Sorry, would you mind quoting the lines in the original article that refer to 'smaller companines'? Apparently I missed them. The only companies I saw mentioned were Google, Apple, Genentech, and Yahoo; hardly small ones.

asia.williams
asia.williams

There is a flip-side to every coin. Ironically, if the employees who were treated badly find each other in a forum and decide to unify, Cyber Devils will be spawned! Do not misunderstand me, we know their are active "Black Hats". Fathom a group of elite that ban together to take down their "do-wrongers". Cyber Hell will be unleashed...ON EARTH.

CharlieSpencer
CharlieSpencer

The article says the agreeing companies won't poach off each other. In context of the article, the word 'poaching' implies contacting an employee of a competing company and offering him / her a job. The article says nothing about not hiring an unemployed person, nor does it say these companies wouldn't interview someone if that potential employee contacted the hiring firm himself. Now it may be that these circumstances are also covered under the agreement, but the original web log post says nothing about them. The only circumstance described is the active recruitment by one firm of employees of another company.

don.gulledge
don.gulledge

Also, Companies have overstepped the bounds of legality in many non-compete agreements in that they include too far reaching conditions that go beyond just protecting intellectual property. Many of these agreements wouldn't hold up in a court of law, but they don't want you to know that. Many non-competes in themselves try to limit or scope your future prospects in an attempt to make it harder for you to jump ship, even if your not taking any big secrets with you. Non-Competes weren't meant too regress or retard a person's ability to move up in the food chain, but just to protect a companies intellectual assets from someone moving from Company A to Company B and give them their research and intelligent work.

Marty R. Milette
Marty R. Milette

There is a difference between being unemployed and trying to jump ship.

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