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The Department of Justice Sept. 24 said it struck an antitrust settlement with Google, Apple, Adobe Systems, Intel, Intuit and Pixar that prevents them from agreeing not to poach each other’s employees for the next 5 years.
The DOJ, which has investigated practices by the six technology companies for the last year, filed a civil antitrust complaint concurrent with the settlement deal in U.S. District Court.
At issue for the antitrust division for the DOJ was the so-called practice of “cold calling,” where companies enter into agreements with rivals to refrain from calling employees who were on “do not call” lists compiled by their rivals.
These employees tended to be top guns at the companies they worked for, possessing not only special skills but deep knowledge of their current employers that would prove valuable for rival companies if they left to join them.
Google, which entered into at least three such agreements covered in the DOJ’s investigation, said it started this practice in 2005 to maintain a “good working relationship with these companies,” which included Apple, Intel and Intuit.
The DOJ viewed this as collusion, claiming it “eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities.”
The agreements, between Apple and Google, Apple and Adobe, Apple and Pixar, and Google and Intel, were as follows, according to the DOJ:
- Apple and Google executives in 2006 agreed not to cold call each other’s employees, putting them on internal “do not call lists.”
- In May 2005, senior Apple and Adobe executives agreed not to cold call each other’s employees.
- In April 2007, Apple and Pixar executives agreed not to cold call each other’s employees.
- In September 2007, Google and Intel executives agreed not to cold call each other’s employees, with Google listing Intel among the companies that it may not cold call in its hiring policies and protocol manual.
- In June 2007, Google and Intuit executives agreed that Google would not cold call any Intuit employee.
The DOJ noted that, if approved by the district court, the settlement will prohibit the companies from striking such “anticompetitive no solicitation agreements.”
Meanwhile, the companies admitted no wrongdoing as part of the settlement.
“While there’s no evidence that our policy hindered hiring or affected wages, we abandoned our ‘no cold calling’ policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of this settlement,” said Amy Lambert, associate general counsel for employment for Google.
“We have agreed to disagree with the DOJ on the issue of any wrongdoing in this matter,” Laura Fennell, Intuit senior vice president and general counsel, told eWEEK in a statement.
“We do not intend to enter into the types of broad non-solicit agreements that are prohibited by the settlement.”