Apple CEO Steve Jobs tried to get former Palm CEO Ed Colligan to agree to not hire away each other's employees, according to a report from Bloomberg. Colligan, who hired his Palm Pre developer from Apple, clearly declined and the war between the iPhone and the Pre is now under way.
The five miles of Silicon Valley roadway between the
headquarters is apparently well trodden, as employees of each
company have defected to the other-a trend that Steve Jobs sought to put a stop
to in 2007, according to Bloomberg.
Bloomberg reported Aug. 20 that it has reviewed "communications"
that occurred between Apple CEO Steve Jobs
and former Palm CEO Ed Colligan, in which
Jobs proposed that each refrain from hiring the employees of the other.
Concerned that Palm was recruiting away Apple employees, Jobs reportedly
told Colligan, "We must do whatever can to stop this."
Colligan declined, responding that the idea "is not only wrong, it is
likely illegal," Bloomberg reported.
At the time, Colligan had recently hired Jon Rubinstein, who had worked with
Jobs for more than 15 years and was head of Apple's iPod division. Rubinstein-who
it's said originally proposed a keyboard for the iPhone-went on to design the
Palm Pre and is now the CEO of Palm.
Colligan announced on June 10 that he
would be joining Elevation Partners, which is partly owned by U2 front man Bono
Pre booster Roger McNamee.
Bloomberg reported that a Palm spokesperson said Palm has not been contacted
by the Justice Department, but that the department is investigating
"possible collusion in hiring among technology companies."
"In his August 2007 communications with Jobs, Colligan said Apple had hired
at least 2 percent of Palm's work force as the company developed the
iPhone," Bloomberg reported. The
iPhone was first released June 29, 2007.
Roger Kay, an analyst with Endpoint Technologies Associates, points out that
noncompete clauses in contracts, in which an employee agrees not to pursue
similar work from a competing company, are illegal in California.
"The Justice Department may be looking at whether [Jobs and Colligan]
made a gentleman's agreement, which is effectively a noncomplete but legally a
different thing," Kay said. "In a case like that, the Justice
Department wants to get in there and say, 'You can't divide up the talent among
The timing of such news could also play out poorly for Apple, Kay told
"There are enough different behaviors that Apple has displayed over the
last few years that indicate that they like to line a situation up so that it really
works for them," he said. "This is exactly what the Justice
Department is looking at in respect to Apple and Google. So it becomes another
data point [in the evidence] that Apple has engaged in this behavior from time
to time." To someone at the Justice Department, news like this likely
suggests, "Hey, there might be more to look at here," Kay added.
In the summer of 2007, Jobs had everything to lose, while Palm had nothing
to lose; at the time, Colligan was busy rounding up talent for his new company.
"It shows his position at the time," Kay said. "I don't have
any illusions about the higher moral superiority of one company over