Strategic CIO // Executive Insights & Innovation
Commentary
4/11/2010
09:38 AM
Bob Evans
Bob Evans
Commentary
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Are IBM, Google, Apple, Etc. Conspiring On Hiring?

The Justice Dept. believes IBM, Google, Apple, Intel and other large tech companies are attempting to hold down compensation for some employees by agreeing not to recruit from each other. If you ask me, this is a clear sign that the employees at Justice have way too much time on their hands.

The Justice Dept. believes IBM, Google, Apple, Intel and other large tech companies are attempting to hold down compensation for some employees by agreeing not to recruit from each other. If you ask me, this is a clear sign that the employees at Justice have way too much time on their hands.From a Wall Street Journal news article about the investigation:

The inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others' employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies' hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits.

After a probe that began more than a year ago, Justice Department investigators have concluded that such agreements do raise significant competitive concerns, according to the people familiar with the matter. . . .

Such agreements are "very close to the line," said Melissa Maxman, an antitrust lawyer at the law firm Cozen O'Connor. "They're not agreeing on price, but they're kind of agreeing on costs." Skilled computer scientists with some management responsibilities, for instance, often make base salaries of $180,000 to $210,000. Compensation for the most sought-after workers typically soars far above that and includes bundles of stock options and bonuses.

It's an interesting article and well worth reading, but I can't help wishing I were saying that about a novel instead of a news article. The Justice Dept. isn't commenting, so at this point it's impossible to know whether it is pursuing some solid evidence or just doing busywork.

But it's hard to imagine an industry with greater employment ability than that offered by the major IT vendors, particularly at the scale of the four enormous and aggressive companies mentioned above. Perhaps I'll end up eating my words if, later this year, the Justice Dept. comes out with some real proof that these massive global companies (Google's 2009 revenue of $23.65 billion makes it by far the smallest company among the four I've mentioned) operating in countries around the world-in IBM's case, about 175-somehow managed to orchestrate a scheme whereby they refused to hire great talent out of concern for raising their personnel costs.

I'm betting that if Justice ever announces a public investigation into this, it will amount to nothing more than 12 or 18 months of sound and fury, signifying absolutely nothing. And then those "trust-busters" can get back to looking elsewhere for some phantom cause designed to keep them occupied.

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