For all of the amazing technology Steve Jobs brought into the world, there is at least one practice he engaged in that we ought to criticize: he tried to keep people from getting paid what they’re worth – illegally. And his buddies at Google, Adobe, and other tech companies enabled him.
In reaching out to Sergey Brin at Google “basically he said ‘if you hire a single one of these people that means war.” Jobs didn’t want his Apple employees to be solicited, recruited, or offered jobs at competitors.
It’s legal to get people to stay by offering them a better job. If you’d like your employees to ignore recruiters from other companies, you can pay them more, offer them more interesting or engaging work, or provide better benefits. All of those options were open to Steve Jobs and Apple.
It’s illegal for companies to get people to stay by preventing others from offering them a better job. Trying to persuade competitors to not call your employees to recruit them is unfair and immoral as well.
By trying to reduce the demand for talent – in this case, any employee who worked at Apple – Jobs wanted to eliminate their options, make them unemployable by other companies in Silicon Valley, and as a result, keep their pay low.
It’s unethical. And it’s kind of…a bummer.
The professionals involved – people like you – had no idea that their CEOs were meeting behind their backs to reduce the demand for their talents, block legitimate offers of employment to them, and force them to accept lower pay because other companies would refuse to talk to them about roles they could have performed.
The good guy in all of this, by the way, is Ed Colligan of Palm, Inc., who wrote: “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.”
The famous economist Adam Smith also had it right two centuries ago when he wrote:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Ultimately, the six firms involved were required by the government to “stop entering into anticompetitive employee solicitation agreements.”
And the civil class action that claimed a conspiracy “to reduce employee compensation and mobility through eliminating competition for skilled labor” ended with the companies agreeing to pony up. Apple, Google, Adobe and Intel agreed to pay a settlement of $415 mm on these claims.
Fortunately, this anticompetitive behavior was found out. And with today’s employment market being even more diverse, vibrant, and robust, behaviors such as these are less likely to be successful now and in the future.