nav search

Apple, Google may end wage-capping case

We won't poach from you, or raise our staff's salaries

By John Oates, 20 Sep 2010

The Department of Justice is close to ending an investigation into several Silicon Valley giants accused of colluding to hold down staff salaries and stop recruiters calling each others' staff.

Apple and Google allegedly had an unwritten agreement not to poach each other's staff - recruitment agencies were told not to cold call anyone working for the other company. At the time of the alleged collusion Google's CEO Eric Schmidt was on the board of Apple - a situation also under investigation by the Federal Trade Commission.

The negotiations to end the probe are complex and some companies are more willing to avoid court than others, the Wall Street Journal reports.

The DoJ has been investigating Silicon Valley firms for more than a year although it believes the practices may be more widespread. Agreements varied between full no-poaching deals and simply preventing cold calling.

Other companies under the DoJ microscope include Adobe, Pixar and Intuit.

But the department believes that even vague offers from recruitment companies allow staff to improve their wages and conditions even if they do not accept such offers. The DoJ alleges that restricting such activity effectively damages people's chances of getting the best jobs, and the best wages. So the result of such unwritten deals is to artificially lower the cost of staff.

The companies accused of anti-competitive behaviour have said such agreements are necessary if they are to collaborate and work together without the fear of losing key staff.

Microsoft and IBM have both said that they are no longer being investigated by the DoJ. ®