U.S. Department of Justice Orders Apple and Others to Stop Engaging in Anti-Poaching Agreements

The U.S. Department of Justice today announced that it has ordered Apple, Google, and four other companies to refrain from entering into "no solicitation" agreements in which companies agree not to actively seek to hire each other's employees.

The Department of Justice announced today that it has reached a settlement with six high technology companies - Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar - that prevents them from entering into no solicitation agreements for employees. The department said that the agreements 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 Department of Justice has filed an antitrust complaint accompanied by the proposed settlement in order to formalize the agreement. Among the agreements cited by the Department of Justice are Apple's deals with Google, Adobe, and Pixar to prevent the companies from "directly soliciting" each other's employees.

- Beginning no later than 2006, Apple and Google executives agreed not to cold call each other's employees. Apple placed Google on its internal "Do Not Call List," which instructed employees not to directly solicit employees from the listed companies. Similarly, Google listed Apple among the companies that had special agreements with Google and were part of the "Do Not Cold Call" list;
- Beginning no later than May 2005, senior Apple and Adobe executives agreed not to cold call each other's employees. Apple placed Adobe on its internal "Do Not Call List" and similarly, Adobe included Apple in its internal list of "Companies that are off limits";
- Beginning no later than April 2007, Apple and Pixar executives agreed not to cold call each other's employees. Apple placed Pixar on its internal "Do Not Call List" and senior executives at Pixar instructed human resources personnel to adhere to the agreement and maintain a paper trail;

The report calls the agreements "broader than reasonably necessary" for the purposes of collaboration between companies and notes that they were "formed and actively managed" by senior executives at the companies involved.

The proposed settlement would bar the named companies from engaging in anticompetitive no solicitation agreements for a period of five years and extend beyond the "cold calling" practice typically covered in those agreements to include other forms of solicitation and recruiting. The companies will also be required to maintain records of their compliance.

One week ago, news broke that a settlement was under discussion as all sides fought to avoid a court battle over the issue. Apple's no solicitation agreements came into the spotlight last August when it was revealed that Apple and Google had such a deal and that Apple CEO Steve Jobs had approached Palm about a similar deal.