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Judge Lucy Koh yesterday ordered Tim Cook to testify in a lawsuit over whether Apple (AAPL),...
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Friday, January 18, 5:58 AM ETJudge Lucy Koh yesterday ordered Tim Cook to testify in a lawsuit over whether Apple (AAPL), Google (GOOG) and other hi-tech companies breached antitrust laws by agreeing not to try to poach each others' employees. Erich Schmidt is also due to appear in the trial, as is Intel's (INTC) Paul Otellini. Lawyers for the five plaintiffs in the case reckon that damages could reach hundreds of millions of dollars.
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This news story has 22 comments:
For the like of Google, Microsoft and Apple (who produce $1000,000,000 of new cash weekly) this is a bit of a non-issue.
Shareholders may have a different take on that.
Any such agreement not to poach each others employees, seems to fall short of this commercial regulation. If anything, agreeing not to steal each other employees keeps costs to consumers down by allowing the companies to avoid heavy retraining costs and trade secret leaks.
I don't know what a judge is going to do, but without more, I don't think this sounds like an anti trust violation.
If HR knew you recruited someone who the company worked with, it was deep sixed and told never to even think about doing it again.
Companies often have working relationships with competitors. That working relationship is far more important than any single hire.
It's not at all clear to me that agreeing to act in the spirit of one set of laws constitutes a restraint of trade that should result in large fines being levied collected by the government.
Where is the illegality, the employee should resign first and work out his notice period or go without pay in lieu, but then the new employer will check with the old who will say why the person left - outcome - high and dry no job! nothing illegal.
Perhaps you would like to change the laws, so they need your personal approval to file suit. Write your Representative.
It has to be filed before it can be dismissed.
I don't doubt plaintiffs succeeding at a first trial, especially if by Jury. However, I fail to comprehend what it is about no compete and confidentiality contracts of employment, and the open job market -- even if the big techs have a no poaching back room agreement, -- what this has to do with anti trust. I spent 28 years under very tight employer contracts and for good reasons. 1. I had a stable career by contract agreement and 2. The value of my creativity could not be compromised by less scrupulous employees, at least not without breach of their contracts. In any enterprise with highly proprietary technical, trade and brand secrets, the goodwill foundations of shareholder value has to be staunchly protected. It would be a breach of fiduciary NOT to negotiate no poaching policies.
If this action should maintain any standing in ANY court, then yes, the govt can and will use it to exact tribute. With this potential case Her honor Judge Koh faces yet another thorny litigation ... rife with very real threats to free enterprise and the defense of intellectual property.
I am long AAPL.
I don't think there's any merit because poaching is an attack which requires an aggressive act. It could be viewed as an enticement to breach of contract, because there is a "no compete" clause in the contract.
It is not the poaching which is involved, but the agreement itself. Is there a written agreement, or is it a "gentleman's agreement" ?
In any case, the result of a decision against the companies would be disastrous to American business. Can't imagine the present Supreme Court ruling against business (or, for that matter, Judge Koh, who may just rule the suit as frivolous, after going through the correct motions).
I would not wish to be whoever is financing this suit. Hundreds of millions and years of litigation, a Dickensian onslaught.
I wouldn't be surprised if SJ sent an e-mail back to HR telling them not to bother him with it. It was probably easier to hit "delete"