Bloomberg is reporting that Apple CEO Tim Cook has been ordered by U.S. District Judge Lucy Koh to give a deposition in a lawsuit claiming that Apple and five other companies entered deals not to recruit each other's employees.

Koh told lawyers yesterday that Apple founder Steve Jobs was copied on e-mails at issue in the case, and that she found it “hard to believe” that Cook, as Apple’s chief operating officer at the time in question, wouldn’t have been consulted about such agreements.

The judge said she was disappointed that senior executives at the companies involved hadn’t been deposed before yesterday’s hearing over whether she should certify the case as a group lawsuit.

usdc
The case goes back to 2005 and alleges that Apple, Adobe, Pixar, Lucasfilm, Google, Intel and Intuit had agreements not to poach employees from the companies that were privy to the agreements. Employees were free to apply at jobs at any of the companies on their own volition, however.

The agreements were investigated in 2010 by the Justice Department and the claims were eventually settled, with the companies agreeing not to enter employee-poaching bans for five years.

The current lawsuit is a class-action civil suit by employees who say they were harmed by the anti-competitive actions of the companies within the agreement.

Top Rated Comments

york2600 Avatar
153 months ago
I don't really see the problem. This is just a head-hunting agreement. What's wrong about that, if the employees are still free to apply anywhere they want?

You've obviously never been recruited away by a competitor. When companies know that people are poaching their employees they pay better. If you as a company know you have nothing to worry about, you're less likely to give raises and large bonuses. Recruiters come with big raises for employees. It's not uncommon in my experience to see 30-50% raises being offered in tech. If Apple knew that wasn't going to happen they don't have to pay as well. That definitely hurts employees. It kills the free market.
Score: 6 Votes (Like | Disagree)
gnasher729 Avatar
153 months ago
I don't really see the problem. This is just a head-hunting agreement. What's wrong about that, if the employees are still free to apply anywhere they want?

If you don't see what's wrong with it, you have to learn a lot in life.
Score: 4 Votes (Like | Disagree)
KdParker Avatar
153 months ago
Not sure why they would even enter into such an agreement. You want the best employees, and if you have someone that you don't want to leave, then treat them right.
Score: 3 Votes (Like | Disagree)
iDuel Avatar
153 months ago
The judge should through them all out of the court room. What a stupid thing to sue about.
Than apple should just fire them all.

Well, it didn't take too long into this thread for a comment like this to pop up.
Score: 2 Votes (Like | Disagree)
Cartaphilus Avatar
153 months ago
I don't think the government should be able to interfere in this way.
We've gotten so used to government inference everyone thinks its ok.
If the employees were able to apply on their own, what's the harm?

The government ALWAYS, as you characterize it, "interferes". In the U.S. the Department of Justice often determines in the first instance what activities constitute a violation of the antitrust laws, but the reason the government must always be involved is because individuals and companies must resort to government funded and staffed courts to resolve disputes. The government in the form of courts must decide which party should prevail and this can involve determining whether or not an agreement can be enforced or not, sometimes on the basis of whether that agreement is in keeping with the sort of society we want to have. For that reason, the government interferes when a bookie sues a gambler who has welshed on a bet by saying, in many states, that it will not allow its courts to be used to collect money from a wager that was illegal to have been made in the first place.

Here two companies have made a contract with each other that arguably affects the rights of an employee of one of the companies who had no involvement in the making of that contract, and who certainly did not consent to it. Assume that in the absence of that contract the other company would have attempted to recruit that employee by offering a 25% augmentation in salary. In effect, the contract has harmed the employee by arguably improperly removing the fair competition for his services that is the essence of capitalism.

So whether the Justice Department decides that the contract is a "combination in restraint of trade", or the employee decides that he has been harmed by illegal collusion to keep his compensation low, or whether one of the companies sues the other for breaching the contract by approaching the employee, the government is going to get involved.

The alternative, which existed in the distant past, and even today in some parts of the world, is that anyone who thinks he has been harmed by the acts of another gets his friends and relatives together and physically attacks whomever they think did them wrong. Long before governments were instituted among men to organize armies, coin money, or negotiate with other governments, people supported an authority to decide disputes among them. It is what separates us from barbarians.

Additionally, there are many reasons why an employee of Company A would not apply to Company B for a job, not the least of which is that if Company A learned about it, it might fire him to replace him with a more loyal employee it could count on not to defect to the competitor. Once you achieve a responsible role in an organization it is far more likely that you will be recruited to your next assignment than that you apply for it, and for that reason any limitation on recruiting deprives you of opportunity.

At the same time, though, there are situations where it is fair to prevent, for a reasonable period of time, one company from making offers of employment to the employees of another. Courts and governments generally are charged with making judgments about when particular circumstances justify enforcing or refusing to enforce a particular agreement.

In this particular case it appears that Apple contracted with a number of unrelated companies to avoid a hiring war where each company was raiding the employees of the other, setting off an expensive auction for employees with rare skills. It is certainly understandable that these companies would see some advantage to themselves in avoiding such a battle, but it is incontrovertible that another consequence is that the compensation of those with valuable and rare skills would not make as much as they would otherwise. The agreement, consequently, is a violation of the law of supply and demand since the demand has been artificially suppressed. In a free capitalist society we must always be vigilant to ensure that the competition that is the heart of our economy is not circumvented by collusion among competitors, and we entrust that duty to be vigilant to our government.
Score: 2 Votes (Like | Disagree)
Killerbob Avatar
153 months ago
if the employees were able to apply on their own, what's the harm?

exactly!
Score: 2 Votes (Like | Disagree)

Popular Stories

Generic iOS 18

Apple Releases iOS 18.0.1 With Touch Screen Bug Fix and More

Thursday October 3, 2024 2:22 pm PDT by
Apple today released iOS 18.0.1 and iPadOS 18.0.1, the first updates to the iOS 18 and iPadOS 18 operating systems that debuted earlier in September. iOS 18.0.1 and iPadOS 18.0.1 come two weeks after the launch of iOS 18. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. According to Apple's release notes, the...
ipad mini 2021 youtube

New Report Reveals When to Expect the iPad Mini 7

Tuesday October 1, 2024 2:09 pm PDT by
Apple is working on a new iPad mini that will "potentially" be released "by the end of 2024," according to a report today from Bloomberg's Mark Gurman. Last month, Gurman reported that Apple had "new iPads in the works," including an upgraded version of the iPad mini. At the time, he said the device was "on deck for Apple's October event" alongside the first M4 Macs. The wording in his...
15 New Things Your iPhone Can Do in iOS 18

15 New Things Your iPhone Can Do in iOS 18.1

Friday September 27, 2024 6:14 am PDT by
Apple is set to release iOS 18.1 in October, bringing the first set of Apple Intelligence features to iPhone 15 Pro and iPhone 16 models. This update marks a significant step forward in Apple's AI integration, offering a new Siri contextually-aware experience and a range of additional capabilities powered by on-device machine learning and large language models. There are a couple of handy new...
macOS Sequoia Night Feature

Apple Releases macOS Sequoia 15.0.1 With Bug Fixes

Thursday October 3, 2024 2:27 pm PDT by
Apple today released macOS Sequoia 15.0.1, the first update for the macOS Sequoia operating system. The 15.0.1 update comes a week after Apple first released macOS Sequoia 15. Mac users can download the ‌macOS Sequoia‌ update by using the Software Update section of System Settings. According to Apple's release notes, macOS Sequoia 15.0.1 fixes a bug that could cause the Messages app...
maxresdefault

Two Weeks With the iPhone 16 Pro Max

Friday October 4, 2024 12:04 pm PDT by
Now that it's been two weeks since the iPhone 16 models were released, we've been able to spend enough time with the new devices to share a more in-depth review on their performance, battery life, feature set, and more. Subscribe to the MacRumors YouTube channel for more videos. We've been testing the iPhone 16 Pro and Pro Max, but the gap between the Pro models and the standard iPhone 16...
macOS Sequoia Feature

Here Are All the New Features Coming to macOS Sequoia This Month

Thursday October 3, 2024 6:27 am PDT by
‌Apple in October will release macOS Sequoia‌ 15.1, bringing to Macs the first Apple Intelligence features such as Writing Tools, new Siri features, Smart Replies, and more. In addition, macOS 15.1 adds a handful of welcome tweaks and improvements to existing Mac capabilities. Here's what we can expect from the first major update to macOS Sequoia later this month. Note that Apple...
top stories 5oct2024

Top Stories: iOS 18.1 Coming Soon, October Apple Event Rumors, and More

Saturday October 5, 2024 6:00 am PDT by
It's hard to believe we're already into October with the iPhone 16 launch behind us, but there's lots more still to come from Apple this year on both the hardware and software fronts. We're still expecting a number of Mac and perhaps some iPad updates in the very near future, while Apple Intelligence features are set to begin rolling out with iOS 18.1 and related operating system updates....
apple silicon mac lineup wwdc 2022 feature purple

MacBook Pro, iMac, and Redesigned Mac Mini With M4 Chips on Track to Launch 'This Year'

Tuesday October 1, 2024 1:57 pm PDT by
Apple plans to release new MacBook Pro, iMac, and Mac mini models with the M4 series of chips "this year," according to Bloomberg's Mark Gurman. Gurman initially said these Macs would likely be announced during a virtual event this October, but he has been more vague about the timing lately, with wording such as "in the coming weeks" and now merely "this year." In any case, it is clear that...