A number of high-profile tech companies, ranging from Google and Apple to IBM and Intel, are being probed by federal investigators for their hiring practices, according to the Wall Street Journal. At issue is whether those companies’ alleged agreements to not poach each other’s employees constitute a breach of antitrust laws.
The April 9 article in The Wall Street Journal suggests that the investigation by the Department of Justice has been under way for more than a year, with the agency’s microscope trained on those tech companies that have supposedly reached understandings to not hire away prized workers. Such agreements, depending on the particulars, have the potential to breach labor laws. Those tech companies have denied any wrongdoing.
“IBM is one of many companies that have been contacted by government officials in a broad-ranging inquiry of technology and non-technology companies regarding hiring practices,” IBM spokesperson Edward Barbini told the Journal, adding that the company is cooperating with the investigation.
Other companies echoed that sentiment.
“We believe our hiring practices are lawful and don’t harm competition,” Intel spokesperson Chuck Mulloy is quoted as saying.
This is not the first time the federal government has investigated the hiring practices of certain Silicon Valley giants; in 2009, another inquiry probed into supposed agreements by Google, Apple, Yahoo and biotech firm Genentech to not poach top-shelf talent. The state of California does not recognize non-compete agreements, although the laws vary by state.
A February report by Computer Economics suggested that technology salaries would rise by 1.8 percent in 2010. “By historical standards, the 1.8 percent median pay raise is meager,” the firm wrote on its Website, “but in light of still-high unemployment rates, the finding indicates IT executives are responding to the need to retain their best workers and boost damaged morale.”
Actual employment figures for the industry have been in substantial flux, with the federal government reporting a gain of around 22,000 new jobs in the six-month period leading to March 2010. That month, however, some 7,000 technology jobs were also slashed, suggesting that the effects of the recent global recession are still being felt in some ways. Nonetheless, at least one analyst sees the overall job market as positive.
“From October 2009 to February 2010, the five IT bellwether job segments reported in the DOL statistics grew,” David Foote, CEO of IT research and analyst company Foote Partners, told eWEEK. “They gave back 6,800 of those jobs in March, but that by itself doesn’t necessarily indicate that the momentum for jobs in this recovery is dissipating.”