Engineers Allege Hiring Collusion in Silicon Valley


NY Times:

Engineers Allege Hiring Collusion in Silicon Valley

SAN FRANCISCO — Tech companies love new ideas, unless they belong to someone else. Then any breakthroughs must be neutralized or bought. Silicon Valley executives know all too well that a competitor’s unchecked innovation can quickly topple the mightiest tech titan.Just how far Silicon Valley will go to remove such risks is at the heart of a class-action lawsuit that accuses industry executives of agreeing between 2005 and 2009 not to poach one another’s employees. Headed to trial in San Jose this spring, the case involves 64,000 programmers and seeks billions of dollars in damages. Its mastermind, court papers say, was the executive who was the most successful, most innovative and most concerned about competition of all — Steve Jobs.

The suit shows how more than two years after his death, Mr. Jobs still casts a long shadow. It also offers a portrait of Silicon Valley engineers that differs sharply from their current caricature as well-paid villains who are driving up the price of real estate in San Francisco and making the city unbearable for others.
Instead, the court documents portray the engineers as “victims of a conspiracy” who were cheated by their bosses, said Joseph R. Saveri, a lawyer for the plaintiffs.
“These are the engineers building the hardware and software that are the lifeblood of the technology industry,” Mr. Saveri said. “But they were prevented from being able to freely negotiate what their skills are worth.”

The actions described in the suit were first uncovered in an investigation by the Justice Department, which concluded with an antitrust complaint against a half-dozen companies. In a simultaneous settlement, the companies agreed to drop the no-poaching practice. The settlement did not preclude the programmers from pursuing their own case against the companies, and the class-action lawsuit quotes emails and other communications from some of Silicon Valley’s biggest names.

Mr. Jobs was particularly worried about Google, which was hiring rapidly and expanding into areas where Apple had an interest. In 2005, for instance, Google’s co-founder, Sergey Brin, tried to hire from Apple’s browser team. “If you hire a single one of these people that means war,” Mr. Jobs warned in an email, according to court papers.
Mr. Brin backed off, and Google and Mr. Jobs soon came to an informal agreement not to solicit each other’s employees. Apple made similar deals with other companies. So did Google.
By 2007, when a Google recruiter slipped up and contacted an Apple engineer, Mr. Jobs immediately complained. To appease the Apple chief, Google fired the recruiter within an hour. Mr. Jobs’s control extended even to former Apple engineers. When Google wanted to hire some, the suit says, Mr. Jobs vetoed the idea.


Big wheels keep on turnin’


As an engineer myself, I’m sensitive to the potential for big business to collude to keep our expertise low paid.

But the articles don’t really show that. What they show is a mutual agreement not to send headhunters after the each other’s experts. That’s rather different than refusing to review resumes submitted by the other guy’s engineers. IMO, agreement not to use headhunters against one another should be permissible as polite business competition while refusing to consider competitor employee APPLICANTS should be subject to anti-trust prosecution. I’m not sure they really had a solid case here. Actively trying to hire away a competitor’s employees is a razor edge away from industrial espionage in an innovation heavy field.


I am a software engineer. And while it is conceivable that business may collude, it has never been my experience in my 20+ years in the industry that this is the case. I’ve worked in Silicon Valley, Seattle area, TX, and now–thankfully–in eastern WA. And with all the employers I’ve worked for–from the 40,000+ behemoths to the lowly 10 employee startup–never has there been any apparent effort to collude.

And besides, so what if the Silicon Valley companies were colluding? There are tech companys all over the country. Silicon Valley isn’t the only place where well paid software engineers are located. Seattle (cough, cough Amazon, Microsoft, Google), Texas (Austin and Dallas), Boston, and Research Triangle Park. And there are other areas with smaller, but just as well paid locations, such as Minneapolis, Sacramento, Portland, and Atlanta.

And if you are an excellent engineer, you could get a job at any of these locations and the company will pay to relocate you. If the engineers in this article are as wonderful as they claim to be, they would have no problem finding jobs outside of the bay area that pay at least as well and they wouldn’t pay a dime out of their own pockets to move.

Amen. And I seriously doubt that had any of these engineers submitted a resume to a competitor, that their resume would have been filed away in the shredder.

Even to this day, though I’ve been happily employed by a company I like and in a location I love for the last 5 years, I get 2-3 calls/emails a month from headhunters, for positions all over the country with a full relocation package. In the engineering world, headhunters are part of territory.

As a side story, about 10 years ago, I got a call, at work no less, from a headhunter for a direct competitor to my employer. I had resumes on the usual internet web sites, had worked with headhunters in the past, and had the typical hiring contacts. I asked how he got my work number and why he called me there. He responded that he called the company switchboard and asked for me, and if perhaps I wasn’t interested that I could transfer his call to another engineer in my department. I told him no thank you, and immediately emailed my supervisor the name of the guy and what he did. Turns out that our competitor had been for months trying to lure people away, and hadn’t been having too much success with the traditional methods, so this was a new tactic. It didn’t help them that most of us were strongly connected to the area, and moving to Boston wasn’t terribly interesting. But they did manage to lure a few away, and found they were given outstanding packages (full relocation, housing assistance to sell their homes, daycare/tuition reimbursements for children, etc).

If one is a good engineer, they can go almost anywhere they want and make very good money doing it. I have a college buddy, never married, that has bounced all around the country, and has made a very good run of it financially. His goal then was to be retired by 40. Of course, he is now enough of an expert and experienced enough that he makes a very good living and despite not needing the money, he enjoys what he does. So he keeps working. And I guess without a family, he doesn’t have the same pull away from work that others have.

Anyway, the point is that I too think these guys are wasting their time, the companies’ time, and the court’s time. If they are as wonderful as they claim to be, they could have left Silicon Valley and gone to other companies outside the area at any time.


Fixed that for ya! Some of the rest of us in the older engineering fields aren’t always so appreciated…


Well, I have a degree in electrical engineering and started out working for a large integrated circuit manufacturer doing standard cell design (designing logic cells out of transistors). I was in an “older” engineering field, and actually had to do real EE work (calculate currents, design for manufacturing considerations, etc). But even then being a competent software guy was necessary, as we were all working on computers and writing programs to support our electrical design effort. Our end product was unrelated (directly) to computer software, yet we had to do a lot of it just to design, verify, and validate our designs.

Of course, of the years, I’ve transitioned from doing transistor level design to writing embedded firmware for devices, but I like to think I’m still “old school” since I started up to my elbows in transistors. But even where I work now, our mechanical engineers are writing programs to assist their development efforts. Our manufacturing engineers are programmers as well, since much of manufacturing is automated. And even the hardware engineers (what we mean by electrical design) are writing automated tests.

Perhaps the only engineers I can think of that probably aren’t steeped in programming might be the oldest of the engineering professions: civil engineers. But even then I bet there is still a considerable amount of computer knowledge necessary to manage design tools.

Now, with respect to the article, I suspect most of the folk that are part of this suit are software engineers. And software engineers are probably the most portable/mobile of all the engineers. But in my experience, even electrical engineers (at least the low voltage type that are probably part of this lawsuit) are in demand, and good ones can easily go just about anywhere they want.


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