Steve Jobs Wanted to Make a Deal on Employee Poaching

By Donald Sears  |  Posted 2009-09-03

Legal fees. No one wants to pay them, and no one wants to lose innovation while being mired in a legal battle over an employee. That seems to be at the heart of a deal that Steve Jobs tried to strike with smartphone competitor Palm.

As first reported by Bloomberg News, Palm CEO Ed Colligan ultimately rejected a Steve Jobs request for a gentleman's deal over not poaching employees. This came from Jobs after a key product development employee, Jon Rubinstein, moved from Apple to Palm back in 2007.

The timing of all of this was soon after Apple released the iPhone, and it's not surprising at all given the competitive nature of the technology business. Getting ahead of everyone with a touchscreen and the Internet might drive you to ask that people not be taken from your company. But enough to break the law?

Colligan rejected the offer on legal grounds. From the Bloomberg article:

"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, 54, according to the communications. Colligan said he thought about Jobs's proposal and considered offering hiring concessions, before deciding against it, according to the exchanges.

Employees are entitled to seek work wherever they want, including at rival firms, said Donald Russell, an antitrust lawyer who worked at the Justice Department for more than two decades before going into private practice in Washington. Competing offers may result in higher salaries and better benefits, he said.

Both companies have a long history of employees going back and forth between Apple and Palm, and both are located in Silicon Valley. Evidently, the Department of Justice doesn't really like hearing that technology companies like Apple may be trying to break the law and has been investigating a number of Silicon Valley technology companies looking for evidence of collusion.

The strange thing though is that Palm's Colligan also accused Jobs and Apple of taking nearly 2 percent of Palm employees during the development of the iPhone.

Pot calling the kettle black? Yeh, I think so.

Rocket Fuel