Apple, Google no poaching pact revealed in emails

US District Judge Lucy Koh said that there was a fair bit of evidence that the Apple and Google were operating a secret agreement not to poach each other’s staff.

She told a court that internal emails show that executives at tech companies such as Apple and Google believed that head-hunting agreements to stop poaching each other’s workers would bring financial benefits.

According to Reutersthe tech companies are trying to avoid a class action by employees which claims that Apple, Google, Intel and other tech giants were involved in an illegal conspiracy to eliminate competition for each other’s employees.

Koh’s job at the moment is to decide whether the lawsuit can proceed as a class action, which would give the plaintiffs more leverage to extract a large settlement.

She said that at the time the no-poaching agreements were forged, top executives felt a collective approach toward hiring was more efficient than dealing with employees individually.

This will pose a problem for the tech companies. At the moment, the only factor saving them is that a key economic analysis commissioned by the plaintiffs, which the judge said had “holes”.

The agreement had been known about for some time. In 2010, Google, Apple, Adobe Systems Inc, Intel, Intuit and Walt Disney’s Pixar unit agreed to a settlement of a US Justice Department probe that bars them from agreeing to refrain from poaching each other’s employees.

The Justice Department and California state antitrust regulators then sued eBay late last year over an alleged no-poaching deal with Intuit. eBay said the government is wrong, and has not been named as a defendant in the civil lawsuit.

Adobe attorney Robert Mittelstaedt said the plaintiffs had no evidence that they lost money because of the no-cold call deals.

However, there is some evidence that the rules were strictly enforced. In 2007, Apple’s Steve Jobs told former Google chief executive Eric Schmidt that he had just recruited an Apple engineer. Schmidt apparently fired the employee.

Koh also ordered Apple CEO Tim Cook to be grilled by plaintiff attorneys for four hours. This was despite his lawyer George Riley trying to get him off the hook. Riley claimed that Cook was chief operating officer (COO) of the company before succeeding Jobs in 2011, and had no role in any of the no-hire agreements.

Koh pointed out that she found it difficult to believe that a COO would have no say over salary and compensation for all employees.

Google attorneys agreed that Schmidt, now Google’s executive chairman, could be questioned by plaintiffs’ lawyers on 20 February.

Other top names who will be showing up in court for depositions include Intel chief exec Paul Otellini.