DOJ, tech companies settle on employee poaching

Tech companies will not be able to strike agreements preventing them from soliciting each other’s employees, thanks to a settlement last week between the U.S. Department of Jusice and six major tech companies, including Apple, Google, and Adobe.

The deal, which also covers Intel, Intuit, and Pixar, was first hinted at earlier this month as the culmination of an investigation into non-competitive hiring practices that began last year.

At the center of the probe were codified agreements between several of the companies not to cold call each other’s employees. Individual deals were struck between pairs of the companies, such as Google and Apple, Apple and Pixar, Google and Intel, and Apple and Adobe. Many of the companies maintained “Do Not Call” lists specifying other firms with which the companies had agreements, all created and maintained with the knowledge of high-level executives. According to the DOJ, the lack of competition produced by these agreements yielded poorer career opportunities for skilled workers in high tech.

The Justice Department’s agreement prohibits these non-competitive practices for a period of five years and goes beyond just the cold-calling prohibition, more broadly preventing any practices that would stop companies from soliciting employees from rivals firms.

The original investigation reportedly also involved other companies, such as Yahoo, Microsoft, IBM, and biotech firm Genentech, though none of them were specifically covered by the deal announced last week. The Justice Department says that it’s still investigating other cases of no-soliciation agreements.

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