Was Steve Jobs the mastermind behind practise of not poaching Silicon Valley ... - Economic Times ~ Electronic Gadgets

By David Streitfeld

SAN FRANCISCO: Tech companies love new ideas, unless they belong to someone else. Then any breakthroughs must be neutralized or bought. Silicon Valley executives know all too well that a competitor's unchecked innovation can quickly topple the mightiest tech titan.

Just how far Silicon Valley will go to remove such risks is at the heart of a class-action lawsuit that accuses industry executives of agreeing between 2005 and 2009 not to poach one another's employees. Headed to trial in San Jose this spring, the case involves 64,000 programmers and seeks billions of dollars in damages. The practice's mastermind, court papers say, was the executive who was the most successful, most innovative and most concerned about competition of all - Steve Jobs.

The lawsuit shows how more than two years after his death, Jobs still casts a long shadow. It also offers a portrait of Silicon Valley engineers that differs sharply from their current caricature as well-paid villains who are driving up the price of real estate in San Francisco and making the city unbearable for others.

Instead, the court documents portray the engineers as "victims of a conspiracy" who were cheated by their bosses, said Joseph R. Saveri, a lawyer for the plaintiffs.

"These are the engineers building the hardware and software that are the lifeblood of the technology industry," Saveri said. "But they were prevented from being able to freely negotiate what their skills are worth."

The actions described in the lawsuit were uncovered in an investigation by the Justice Department, which concluded with an antitrust complaint against a half-dozen companies. In a simultaneous settlement, the companies agreed to drop the no-poaching practice. The settlement did not preclude the programmers from pursuing their own case against the companies, and the class-action lawsuit quotes emails and other communications from some of Silicon Valley's biggest names.

Jobs was particularly worried about Google, which was hiring rapidly and expanding into areas where Apple had an interest. In 2005, for instance, Google's co-founder, Sergey Brin, tried to hire from Apple's browser team.

"If you hire a single one of these people that means war," Jobs warned in an email, according to court papers.

Brin backed off, and Google and Jobs soon came to an informal agreement not to solicit each other's employees. Apple made similar deals with other companies. So did Google.

By 2007, when a Google recruiter slipped up and contacted an Apple engineer, Jobs immediately complained. To appease the Apple chief, Google fired the recruiter within an hour. Jobs' control extended even to former Apple engineers. When Google wanted to hire some, the lawsuit says, Jobs vetoed the idea.

Google declined to comment for this article. Apple did not respond to requests for comment.

Alan Hyde, a Rutgers professor who wrote "Working in Silicon Valley: Economic and Legal Analysis of a High-Velocity Labor Market," said the no-poaching accusations go contrary to what has made the valley so successful: job-hopping.

"There is a fair amount of research that tech companies, particularly in California, have distinctive personnel practices," he said. "They hire for short tenures and keep ties with former employees so there can be an exchange of information across company lines. The companies in this suit might have been killing the golden goose."

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