The alleged behavior of these companies is appalling to me. Halting an employee's application to another company is an abuse of power and amounts to theft. In my opinion the perpetrators here should do time in prison, just the same as executives who collude to fix commodity prices.
There is a well known story about how "genius" tried to screw the early employees out of stock money, so Woz gave away his shares to them. I guess people never change. Stay classy, Steve.
As a practical matter it means that I, as a Software Engineer, will now have to think long and hard before I submit a resume to one of these HR departments with a history of informing current employers.
We can bet that a good many job applicants asked "I don't want to make waves at my current job, but I saw your opening and it looked like such a great fit... So would you please keep my application confidential?"
What were they told in response by the hiring HR departments?
TBH I don't see employer unions as different from employee unions.
Individual employees/employers will band together for mutual benefit. Then one, for significant personal benefit, will break ranks. The market decides what point that is.
A large company in effect already is an employer union; whereas you typically negotiate as just one individual (unless you're part of a union), the hiring manager isn't negotiating with you by himself as a human free to use his judgment, but as part of a large organization that's agreed on common terms coordinated across all its hiring managers and departments. Hence the difficulty in negotiating changes to employment agreements: rather than a situation where, e.g. a representative of the company and a representative of the employees get together to negotiate things like non-compete terms, a representative of the company, which has worked out a coordinated strategy, is sitting down with an individual who isn't coordinating with anyone.
The union analogue of a group of companies, representing a large sector of an industry, coordinating with each other, would be more like the old-school industry-wide unions, which would present demands to employers as a unified front, and simultaneously go on strike from all the employers in the entire sector if their demands weren't met. That's not allowed anymore; since the Taft-Hartley Act (1947), unions have to individually negotiate in good-faith with their employers, and industry-wide "labor action" is banned.
But unions exist to counter the grossly disproportionate amount of power that an employer has especially in a depression like this one, where unemployment drives down the cost of labor.
Facebook and Google are already in a hiring war and (if reports are to be believed) it's had a dizzying effect on employee compensation [1]. I can't even imagine the war for talent that will occur in Silicon Valley if these agreements drop. Eyes Apple's cash horde
Having a hard time processing how it could be anything but a good thing in the short or long run.
Memo to Tim Cook: not sure you'll want to have $100+ billion dollars just chilling in the bank when ex-employees start winning class action suits against you.
Having a hard time processing how it could be anything but a good thing in the short or long run.
Suppose developers/software companies create a large consumer surplus which they fail to capture. If prices go up, then either quantity supplied will go down (reducing consumer surplus) or companies will focus on efforts where they can capture a larger portion of the gains due to trade.
In practical terms, low cost developers might make a free music service economical. If the cost of producing software goes up, the free music service might be uneconomical, and the developers may refocus their efforts on creating DRM (allowing producers to capture a greater portion of the gains due to trade).
I'm not asserting that this will happen, merely pointing out that it's not hard to imagine scenarios under which rising developer costs might be bad.
Although this sounds plausible, the fact that it happened at companies who made boatloads of profits suggests that won't really happen in practice. Greed is irrational like that.
If developer salaries grow out of proportion to the value they create (which IMO has already happened), that creates downward pressure for everyone else in the value chain - non-technical employees, suppliers, etc. Also, when the bubble inevitably bursts it will affect lots of people who never benefited from the inflation in the first place. Bidding wars and speculation are not always good in the long term.
[edit] Allow me to expand on that in a very specific way. I'm currently sitting in Bengaluru, surrounded by some excellent developers. What effect does wage inflation in Silicon Valley have on people here? Every time a Silicon Valley engineer's salary gets inflated by US$20K, how many people here are affected by reduced job prospects or raises? From that perspective, what's hard to see is how a bidding war among SV employers could possibly be a good thing.
When Cisco was booming, they made a big deal about the metric of revenue per employee, which hit $1m. Apple and Google both exceeded this number in 2008, and with decent margins.
I think you'll have a tough time convincing their engineers that their salary is out of proportion to the value they created.
"In proportion" merely means an optimal or expected ratio, which might be considerably greater than 1:1. Therefore, even if the value:salary ratio for that Silicon Valley engineer is 10:1, if a 20:1 ratio is possible somewhere else then that Silicon Valley engineer's salary is still out of proportion.
Also, dividing revenue per employee by salary for a subset of employees doesn't really give you the right ratio. A lot of corporate revenue is not directly tied to developer contributions, and it's a rare employee who actually moves the bottom line by 10x their salary. At best you could divide the revenue attributable to that year's development by the salary paid during that time, but even that's a weak approximation.
I'd appreciate it if the downvote-abusing coward(s) would explain their objection to that comment. It's quite factual, and relevant, and IMO importantf for people to consider. Do you seriously believe that revenue for all employees divided by salary for some tells you anything meaningful? Do you believe that availability of a better ratio by hiring someone else doesn't mean you're overpaid? Come on, let's have some actual debate instead of bullying.
Stop telling people they aren't worth a million bucks and they'll stop voting you down.
Wouldn't it be a neat if user profiles here displayed a downvote/reply metric? Not replies in general, but replies to comments which the user had downvoted.
You're getting downvoted because your position is all over the map, and doesn't add to the discussion:
You start out claiming that developer salaries in SV are out of proportion because SV developers do not create enough value. You also state that if developers are paid too much then there won't be enough left over for other workers, non-technical and such. Of course, for that to be true we'd have to assume that hiring an engineer in Silicon Valley is a net loss or a wash at best, because otherwise hiring one actually means more resources for further hiring and salary increases.
Then, when confronted with the fact that they most certainly do create proportional value and at a rather healthy ratio no less, you instead make the claim that they are overpaid because cheaper work can be had elsewhere (in Bengaluru). You make the implicit assumption that, for a firm based in Silicon Valley, an engineer in Silicon Valley is equivalent to an engineer in Bengaluru, India (or anywhere), provided they are equally talented. Not many of your readers will grant you that point. At any rate you seem to claim the market should determine what the fair salary is, when the very issue at hand is collusion by several large employers in Silicon Valley to distort the job market there. Is there any force acting in the opposite direction that you think is raising salaries there? Did all the engineers there unionize when nobody was looking? Because otherwise developer salaries are determined by market forces. Everywhere. (Again, with the issue at hand being an exception, but an exception not in favor of your argument.)
Your principal beef seems to be that developers in India don't make enough money compared to their peers in the States and specifically in the Valley. You make the claim that rising salaries in Silicon Valley mean lower salaries and reduced job prospects in Bengaluru. You do not justify this claim nor do you give anyone any reason to give a shit in the first place. Let me make an equivalent claim: rising salaries in the Valley mean lower salaries for everyone everywhere else. See now why it's bullshit?
Thank you for (belatedly) having the balls to engage instead of just downvoting. "All over the map" doesn't count, or else half of the threads on HN would have zero comments, and "doesn't add to the discussion" is absurd. The very fact that it took you three paragraphs to explain the nature of your objection indicates otherwise. I added far more to the discussion than the downvote-cowards had up to that point (and probably ever). Your "everyone everywhere else" strawman is even more risible. Stick to claims I actually made, or be dismissed as a dishonest coward.
I was certainly never confronted with the "fact" that SV engineers "certainly" do create proportional value. I was confronted with a bunch of bad math that proves nothing. Did you miss the part about the target ratio not needing to be 1:1? Or the part about developers' contribution during a year not being the only (or even main) determinant of revenue during that same year, which makes division of revenue for all by salary for some utterly ridiculous? Where are these engineers who drive the bottom line by 10x their burdened cost (not just salary BTW)? I've been one myself, I've met others, but for every such person I've also met dozens who contributed 10% or less over their cost. You need to stop assuming, and start measuring.
OK, on to the point about whether SV engineers are worth more than those elsewhere. Let's forget Bengaluru for a moment. Consider Boston or Boulder. Brisbane or Birmingham. Engineers there are every bit as good as those in SV. Sure, there are costs involved in having developers who are elsewhere, but that's balanced by the extra cost of building out offices etc. in one of the most expensive markets in the world. Buy some decent teleconferencing gear, provide a generous travel budget, and you'll still come out ahead even in these relatively high-salary locations. Now consider a place like Bengaluru. I haven't worked with everyone here, nor have I worked with everyone in SV, but I've worked with enough to be skeptical of the assumption that the average SV engineer can deliver enough to be worth several times the salary. Some can, most can't.
That's two strikes against you. Let's go for three. Should the free market determine wages? Absolutely. Do these no-poaching agreements subvert the free market? Again, absolutely. Does that add up to a conclusion that a bidding war would be a good thing? Absolutely not. CDNF. A temperate amount of poaching would be a good thing, but I don't think that's likely to happen. What's more likely to happen comes back to your statement about "a net loss or wash at best" because at some point that does become true. I personally think it has already become true at many companies. Those newly hired engineers are going to count against this year's budget; their contribution to revenue won't show up until next year's. The extra cost of hiring that first developer of the year has to be made up somehow. Part of it will be made up by reducing capital costs and travel budgets and such. Part of it will be made up by hiring nine new developers instead of ten (wherever they are) or by giving smaller raises to current employees (including developers). Maybe that "rock star" you just hired away from Google will pay off next year, but this year (and probably the next couple) their bidding-war premium will exert downward pressure on everyone else. A bidding war is not only bad for developers elsewhere, or for non-developers. It's bad for other developers in SV besides the few who win the lottery.
The problem with the no-poaching agreements is that they've created pent-up demand. Now, like soda that has been shaken, the newly opened bottle is going to fizz all over the place. Those making the agreements should have been prosecuted years ago, because waiting has created an even bigger mess. The absolute least likely outcome is an efficient short-term reallocation of resources. More likely is that some companies without deep pockets will be starved out of the market.
The only companies that will be starved out of the market are the ones whose business model requires artificially-deflated wages to be profitable. We can argue whether that's 'right' or good for society, but it's certainly the way it is.
When I say your position is all over the map, I mean you can't seem to decide what is fair for you when determining what a person should be paid. On the one hand you're talking about the proportion of value to salary and target ratios, and on the other you're saying that the market should determine wages (as opposed to does). The fact is, if you find yourself in a position where you need to get something done, and the only people who can do the job are demanding a salary only 10% lower than what you expect the project to make, then all that value ratio bullshit goes out the window, because 10% is better than 0. If you've got to lay people off, then you can look at who is contributing what. Maybe you can do that when hiring too but it's much harder. But we're talking about the labor market in general, not in individual cases. The fair wage, that is to say the right wage, is the one you can get in a free market, and the topic at hand happens to be collusion against that market in a direction that is not favorable to your position. Again I ask, what is making them high?
At any rate, at Apple, Google, Facebook, etc., the margin is a hell of a lot higher than 10%. All this talk about whether someone in Boston or Brisbane or Bengaluru has a skillset comparable to a more highly-paid developer in SV in pointless, because they aren't in SV, and SV is clearly where these companies want them. If you think they're still paying too much, then you should find a way to short the market for software engineers in Silicon Valley. Really.
Anyway, replying to you certainly didn't take any balls at all, it just took time. I happen to have time in abundance for the moment so I used some of it to try to make a point. And mostly I did that to check that I still could, as a bit of a challenge. The challenge stemmed not from the fact that you put forward a good argument, but rather that your argument is so poorly constructed that it's hard to form a really coherent response to it. I am now also intrigued by your persecution complex which is why you're getting this second reply. Look, there isn't some downvote mafia you've pissed off, and the people who downvoted you aren't cowards. You've put forward a provocative thesis, for this place at least, but you don't get downvoted for that here. You do get downvoted for putting forward arguments that lack substance, especially so if you have an attitude about it.
If developer salaries grow out of proportion to the value they create (which IMO has already happened)
WAT?
Top software developers are very well-paid. No complaints on that one.
That said, the value-add of a good software engineer (not a "rock star", just 95th-percentile, which is average in some communities, e.g. functional programming) is easily half a million a year.
1. It means they're scared. Companies wouldn't do this if they were afraid of a 10% bump in salaries. They'd just pay it out. That's small compared to the cost incurred by constant churn, code turning into legacy as people leave the company, etc. To pull that shit, they're worried about something larger.
2. If they were able to pull that "cartel" off (and such arrangements are inherently unstable, because it's always in the individual interest to break) it would be stupid for them and advantageous for startups. If the big companies hold each other back ("crab mentality") then startups would have less competition for talent.
In fact, the second contradicts the intentional over-hiring observed at large companies: why do these huge companies pay $150-250k for people to do mind-numbing, unnecessary maintenance work on zombie projects? (I've seen legacy monsters at large companies with 4 full-time maintainers.) Because they don't want these people in startups that might threaten them, 5 to 10 years down the road. Fighting to keep down salaries just seems to increase the likelihood of this happening.
Except when the best of the best want to go from Apple to Google, specifically. And can't. It's not just about salaries, it's about prohibiting professional growth. And I would be very surprised if it didn't keep salaries down.
"In addition, Defendants often implemented their express agreements so that they operated as de facto "no-hire" or "no-poach" agreements, whereby Defendants did not recruit an employee of another company, even if that employee affirmatively applied for a position."
Seems pretty clear they were turning down applicants who applied.
Not trying to make light of the seriousness of the allegations, but where's the bit about notifying the current employer? I scanned those pages (and bracketing pages) and didn't see it.
The documents also demonstrate that Defendants did not extend an offer to an employee of another Defendant without prior approval from the candidate's current employer, regardless of whether the candidate applied without being solicited first.
Because the US Attorney who would start this lawsuit and the Attorney General who would support her would lose any hope of being hired by one of the plaintiff when they want to get their share of the loot.
Note that this case is being brought by private plaintiffs; only the government can bring criminal cases, and it clearly has chosen not to do so in this case.
Just because you can recover damages against someone in civil litigation doesn't mean they've committed a crime. What actual crime do you believe has been committed?
I know little about law, so this might not be what you’re asking, but I can easily find, e.g.:
Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.
What that "primer" doesn't mention is the vague wording of the antitrust statutes, consequent extensive, confusing, and outright contradictory case law surrounding antitrust, the added complexities when it's mixed with employment law, the difference between the actions of a monopoly and the actions of one or more companies in a highly competitive market, the differences between criminal and civil litigation (such as burden of proof and discovery rules), and the fact that criminal prosecutions for antitrust are quite rare.
Also left unexplored are the questions raised by imprisoning individuals for engaging in what would, in the truly free market many Americans claim to want, be perfectly legal conduct.
Finally, you still haven't identified what acts you feel are crimes, nor any particular criminal law those acts violate. This is a necessary precondition for criminal prosecution. Prosecuting someone without being able to tell them exactly what crime they're being charged with is not how we do things in a free society.
While a very small handful of hardline libertarians would think so, I don't think there are "many" Americans who claim to want a "truly free market" to the extent where behavior like that described here would be legal. My guess, if it were polled, would be no more than 20% support for these kinds of collusion agreements being legitimate; certainly not a majority in support. Americans generally don't consider the unrestrained "truly free market", full of blackballing, price-fixing, insider trading, monopoly leverage, retaliation, dumping, racial covenants, and all the rest of the late-19th-century fine business practices, to be a legitimate part of the American form of capitalism.
Even in the libertarian-leaning tech community, you'd be hard-pressed to rustle up majority support for Microsoft's 1990s-era OEM strongarming, where they retaliated against suppliers who shipped competing operating systems like Linux--- which would be perfectly fine behavior in an unrestrained free market.
Guess all you want, and I'll do likewise. My guesses are based off the fact that virtually every one of my fellow Americans I talk to don't understand why we have antitrust laws in the first place, and think the government getting involved in these matters is bad, right up until it bites them in the ass personally. Then, of course, it's witchhunt time.
As a very hardline libertarian, read anarchist, I disagree wholeheartedly with this statement. Even in the most libertarian leaning circles people like at least a little government regulation.
I say this as a person who was born and raised in Texas and attends gun shows regularly. The people in attendance are the kind with automatic rifles (very very illegal), the ones who pay for all their items with gold, want to succeed from the US, or the kind who think the "NWO" is a very real possibility, and even they feel safer with at least a little government protection.
One of ex-GF's had a tshirt that read "Permain Basin Gun Club. We don't call the police". Even her family believed in gov regulations for big business and finance.
As much as I wished more Americans were libertarian leaning the truth is that they are not.
With which statement do you disagree, exactly? Because all I'm saying is what I've observed. Unless you were present when I made these observations and have a better memory than I do, arguing with me about it isn't exactly going to be productive, is it?
I can see varying opinions on antitrust laws (especially depending on how you phrase the question), but I have more trouble believing that most Americans are in favor of a completely unrestricted free market. Unless the people I've come into contact with are completely unrepresentative, I'd be really surprised if there were majority support for proposals like, "insider trading should be legalized" and "it should be legal for businesses to discriminate against employees based on their race".
There is nothing free about "he who has the gold makes the rules." This seems a bit counter-intuitive to many who are new to the libertarian philosophy, but once past the "tea party 2.0" stage, I think most "libertarians" understand and agree with this.
I'm not clear why people are dragging "libertarian" into it. Most people I know wouldn't describe themselves as libertarian, and certainly aren't in their belief system. Libertarians do not have a lock on advocacy of the free market. The most right-wing, Christian-conservative, anti-abortion, pro-war-on-drugs, anti-gay (in the lock them up or kill them sense), I-get-to-decide-how-you-live-your-life man I know is also the one that goes the most apoplectic when government regulates economic matters.
Count me in as one hardline anarcho-capitalist / libertarian who is opposed to government intervention in something like this. I oppose anything like "government" that purports to do anything more than act as a collective extension to our innate right to self-defense; and take the Zero Aggression Principle seriously.
A government is nothing but a concentration of power.
In this case these companies are creating a centre of power that is defacto no different from if a de jure government had stepped in with rules against poaching - they represent such a huge market power that their collusion results in a very real exertion of power on everyone else.
Being against government intervention without being against corporate intervention is either naive or hypocritical depending on what your basis for it is - history demonstrates just how willing unchecked corporations are to oppress and restrict individual rights in the face of lacking government intervention.
In other words: If you take away the government intervention without also weakening corporate power, you're replacing a master that is at least subject to some oversight with warring masters that would not be.
If you reduce government sufficiently, there wouldn't be any corporations, as corporations are an artificial construct created by the State. Whether that would be a Good Thing or not is an open question, but don't make the mistake of believing that libertarian views automatically equate to (accepting|endorsing|liking) big, evil, greedy, abusive corporations.
Also never mind that corporations, as we know them today, would likely never become as large and powerful as they do, without the corrupt collusion between corporations and government.
As for oversight of government... please. That sounds good in theory, but in practice it's all but nil. It took an unprecedented Internet-powered mass movement just to derail SOPA/PIPA... and they'll almost certainly come back later, sneak in the back door (attached to a defense spending bill or something) and become law. And this is the same government that assumes the power to simply label someone a terrorist and disappear them with no due process.
I'd prefer to reduce the influence of both government and $BIG_MEGACORPs in my life, but since governments reserve for themselves a monopoly on the use of force (well, until they contract it out to Blackwater or whoever), I'd rather start there.
If you "reduce government sufficiently" without reigning in corporations at the same time, there is nothing to prevent the organization of de facto corporations.
Corporations are an artificial construct of a state, true, but the only reasons it was "necessary" to invent them was that the states of the time did have enough power to otherwise enforce laws directly on the members of makeshift, de facto attempts at structuring something like a corporation. Reducing government power might remove de jure corporations, but it does not take away the ability to structure de facto corporations. The lack of legal recognition don't stop crime syndicates from organizing, for example (not that I mean to imply all corporations are as bad as crime syndicates).
> Also never mind that corporations, as we know them today, would likely never become as large and powerful as they do, without the corrupt collusion between corporations and government.
That presupposes that a new mechanism is put in place for keeping them in check, or you're taking away the one thing that presents them from setting themselves up as de facto governments.
Note that we agree on minimizing government. But I find the idea of doing so without popular control of corporations abhorrent - at least the governments I've lived under adhere to a basic system of justice, but large corporations unchecked by threats of force from the public - whether directly or through a government - would have no need to.
> That sounds good in theory, but in practice it's all but nil.
I have far more insight into what my government does than what I can legally get into most corporations. So while popular oversight of governments by no means is great, popular oversight over corporations is far worse, and what little there is is only there because of government intervention.
> but since governments reserve for themselves a monopoly on the use of force (well, until they contract it out to Blackwater or whoever), I'd rather start there.
By doing so you're just transferring that power to the richest corporations, unless you at the same time dismantle them.
Libertarian views assume that free markets regulate themselves basically due to perfect competition. (Trying to keep this short and simple.)
Realistically, you do not always have perfect competition and you have problems with monopoly, oligopoly, etc. Firms are potent enough that their decisions can manipulate markets, and in this it would be labor markets. (Perfect competition assumes that no single firm can manipulate markets.)
Libertarians oppose a government presence in markets because they believe the result is inefficiently functioning markets, and we are all worse off.
In this case, the firms are manipulating labor markets so that they behave inefficiently to the advantage of the manipulative firms and disadvantage of labor. (This is usually where people try to justify labor unions as a counter to the influence of firms.)
I guess this practice is clearly illegal if employees are not aware of this when they are hired. This is like a secret clause to their hiring contract, and that restricts their freedom to move to other positions. Even if California does not consider the practice illegal, there is a clear "abuse of power" case here.
I've turned down positions at two of the aforementioned organisations in favour of much smaller companies (<50 employees). It's worth it. It's better to be a well known and respected employee in a small company than a fungible cog in a corporate machine.
The article doesn't mention an important fact: All of the defendants named in the suit are based in California, a state that does not enforce non-compete agreements (with some minor exceptions).
Assuming that these companies agreed not to hire each other's employees, we have a make-shift non-compete agreement, in effect (though not as efficient or encompassing).
The biggest issue I have with this case is that these types of antitrust laws exist in the first place. In the absence of fraud, this is a victimless crime. To pay damages implies that the offender took something away from the victim, that they need to be "made whole" again.
These employees freely agreed to their compensation packages and received those. They weren't hired elsewhere because those employers freely chose not to after balancing the benefits of recruiting them against the risk of losing current employees.
If these companies are really screwing over their employees it seems like a great opportunity for other companies to tell them no thanks to their no-hire agreement and start poaching.
Even a very strict libertarian should agree to the obvious harm here: the compensation package with Google that the employee negotiated in good faith has a covenant which was not disclosed to them and is materially against their interests, namely, that signing on the dotted line forecloses future avenues which you might want to pursue. Not only were employees unaware of that, they would have active reasons to believe it would be impossible, because the laws under which that contract was negotiated say in big bold letters that provisions like that are repugnant to the state's sense of justice and will be voided even if spelled out.
There's a credible case for allowing people to sign away future opportunities in return for compensation in the present day, even if their counterparty has excessive leverage in that negotiation. I don't believe it, but I wouldn't think less of you if you do. There's no credible case for the moral righteousness of secret conspiracy against one's own employees' interests which acts to implement a term that you cannot ask for and expressly deny having sought.
It's structurally similar to abuse of overtime. I happen to think you should be allowed to trade more than 40 hours a week in return of an amount of money you find motivational, if that floats your boat. In some jurisdictions, that is illegal. Even if you disagree with that policy, if you're negotiating a contract in those jurisdictions, you're going to assume as part of your offer that you're only agreeing to 40 hours a week for the same reason you assume that negotiating a contract will not secretly obligate you to give them your kidney. If they then stick you with more than 40 hours a week, that's an abuse, even if you don't agree with the law: if you had been aware of the work routinely requiring more than 40 hours, you would have priced that in, but instead you priced it on the assumption of 40 hours in the mistaken belief that that was an externally imposed maximum.
Those are fair points, although I did qualify my statement with "In the absence of fraud". If the employment agreements forbid the behavior then that would be a clear case of fraud. When it comes to implied expectations, I'm not sure it's so clear. My understanding is that bilateral agreements with no-hire stipulations are not explicitly illegal, although the court may rule a specific agreement is depending on how it affects competition in a market. So how many employees actually assumed no non-hire agreements when they signed on and was that a reasonable assumption? I think that's a difficult question to answer.
Either way, I hate that the focus is on the "letter of the law". If this were a patent troll case, or Hollywood copyright, or if SOPA had passed, how many people here would be demanding damages or jail time from the defendants? They would be guilty of breaking the law just the same, and the plaintiffs could also claim that they need to be compensated for their losses (cost of filing for patent, "lost revenues" from pirated material, etc.)
I have to say, though, that my initial post was poorly worded. As I was writing it, in my mind, I thought I was railing against antitrust laws in general and describing how non-hire agreements in the abstract were victimless crimes. Reading those statements again, it seems more like I'm just talking about this particular case. That's totally my fault, I apologize for that. I tend to get worked up about issues like this and have to do a better job of choosing my words, or even stop myself from ranting in the first place.
Assuming that these companies agreed not to hire each other's employees, we have a make-shift non-compete agreement, in effect (though not as efficient or encompassing).
Contracts never trump state law. If they say it's illegal a handshake between a few companies doesn't make it not illegal.
In the absence of fraud, this is a victimless crime. To pay damages implies that the offender took something away from the victim, that they need to be "made whole" again.
You're company doesn't value your work and you'd like to leave to work somewhere else, preferably in the same area with the same or greater pay, only you can't because your employer has conspired against you. See who the victim is now?
These employees freely agreed to their compensation packages and received those.
Well, they agreed to everything except that non-compete that is completely illegal and not in their contract.
If these companies are really screwing over their employees it seems like a great opportunity for other companies to tell them no thanks to their no-hire agreement and start poaching.
Apple and Google have a market cap bigger than most developing countries. They can keep raising the salary offer and shut you out. You can convince some of their employees to leave as long as it's not about the money, but for most people it's about the money.
Could they just have people sign non-competes perhaps? If you want to work there, it's just part of the package. Seems like a fair trade off to me, and everything is above ground.
I'm not a lawyer, but I believe non-compete clauses in employment contracts are not legal in California.
Restrictions against non-complete clauses and against forcing employees to assign all intellectual property to employers (even from personal projects) are part of what makes Silicon Valley what it is.
I think non-competes must be enforceable in California since I've been slapped with one while working for a CA-based company. That said, I suspect that they're not easily enforceable or frequently enforced.
It seems to me that the idea behind this was not fundamentally price-fixing but eliminating the kind of disruption to projects (and inevitable leakage of ideas and technology) you'd get from having people hopping around from company to company. Price fixing may well have figured into it, but I doubt it was the main reason.
"Veridian does love its money." Veronica (Better Off Ted)
Not a fair trade, and impossible to enforce. There's plenty of case law saying that a non-compete that prevents a person from making a living in his profession is null and void.
Apple and Google could be argued to be "competitors for talent", but if you work on one product at Apple and move to Google and work on something different, there's no state in the country that would consider that a violation of a non-competition agreement. To my knowledge, non-competes are only successfully enforced over trade secrets and client lists.
