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Palm Reportedly Rejected Jobs' Proposal Not to Poach Each Others' Employees

Thursday August 20, 2009 6:37 am PDT by Eric Slivka
Bloomberg reveals that Apple CEO Steve Jobs reportedly approached then-Palm CEO Ed Colligan in August 2007 with a proposal that the two companies refrain from hiring each others' employees. Colligan rejected the proposal, claiming that the tactic was wrong and "likely illegal."

Colligan, who stepped down as CEO in June, discussed the matter with Jobs in August 2007, as the mobile-phone war heated up, according to the communications. Apple had introduced the iPhone two months earlier, just as Palm hired a former Apple executive, Jon Rubinstein, to develop new smart phones. Jobs, Apple's CEO, told Colligan he was concerned that Rubinstein was recruiting Apple employees. "We must do whatever we can to stop this," Jobs said in the communications.

While the exact proposal made by Jobs was not discovered by Bloomberg in its review of communications between Jobs and Colligan, Colligan's response indicates that an anti-poaching deal was in fact proposed.

"Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal," Colligan said to Jobs, 54, according to the communications. Colligan said he thought about Jobs's proposal and considered offering hiring concessions, before deciding against it, according to the exchanges.

The report comes on the heels of another claim that Apple and Google had a similar informal agreement during Google CEO Eric Schmidt's term on Apple's Board of Directors, a situation being investigated by the U.S. Department of Justice for possible antitrust violations.

Palm and Apple have developed an intense rivalry over the past several years as Rubinstein and a number of other former Apple employees have played key roles in rebuilding Palm with the development of the Palm Pre and its webOS operating system. On a conference call in January several weeks after the Pre's announcement, Apple Chief Operating Officer Tim Cook made what was viewed as veiled threats against Palm regarding multi-touch and other intellectual property claimed by Apple that has appeared in similar forms in the Pre. Palm and Apple have also continued to spar over the Pre's ability to sync media directly from iTunes by presenting itself as an iPod in its vendor and device identification codes.

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