Google Inc., Apple Inc. and four other technology companies agreed not to limit their efforts to hire each other’s employees, a practice the U.S. Justice Department said can unfairly depress salaries.
Intel Corp., Adobe Systems Inc., Walt Disney Co.’s Pixar animation unit and Intuit Inc. are also part of the accord that halts agreements under which companies refrained from placing “cold calls” to lure workers from competitors, the Justice Department said yesterday. In a settlement filed in federal court, the department said the companies kept do-not-call lists to avoid such recruiting.
“The agreements eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees,” the department said in a statement yesterday.
The department conducted an antitrust investigation into recruiting and hiring practices that involved some of the biggest U.S. technology companies. The agency said it is continuing to investigate other “no solicitation” agreements, without giving details.
The settlement isn’t as broad as some in the technology sector expected, and it doesn’t include fines, said Robert Lande, director of the American Antitrust Institute, a Washington group that favors tougher enforcement.
The prospect of fines and other punishments “created lots of fear,” he said.
The companies may still be threatened with lawsuits from people who claim they missed out on higher-paying jobs because of the recruiting practices, Lande said. “For the six companies, it’s not over,” he said.
Spokesmen for Microsoft Corp. and International Business Machines Corp. said last week that they were no longer part of the investigation.
“Intel does not believe its actions violated the law, nor does the company agree with the allegations,” Chuck Mulloy, a spokesman for the Santa Clara, California-based company said in an e-mailed statement. “The company is settling the matter because it believes it would not harm the company or its ability to do business.”
The settlement won’t have a “significant impact” on business, said Diane Carlini, a spokeswoman for Intuit, based in Mountain View, California.
“We have agreed to disagree with the DOJ on the issue of any wrongdoing in this matter,” Carlini said in a statement.
Amy Lambert, associate general counsel of employment for Mountain View-based Google, said the company and “a number of other tech companies” had no-cold-call policies.
“While there’s no evidence that our policy hindered hiring or affected wages, we abandoned our ‘no-cold-calling’ policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of this settlement,” she wrote on the company’s policy blog.
Adobe’s recruiting practices didn’t violate antitrust laws, said Holly Campbell, a spokeswoman for the company based in San Jose, California.
“We have elected to settle this matter in order to avoid the cost and distraction of litigation,” she said in a statement.
The Justice Department said that in May 2005, senior Adobe and Apple executives agreed not to cold-call each other’s employees. Adobe was placed on an internal Apple do-not-call list, while Adobe put Apple on a list of “companies that are off-limits,” according to the department.
Starting in 2006
Apple and Google had each other on internal do-not-call lists starting in 2006, according to the department. The next year, Apple and Pixar agreed not to call each other’s staffs, and Google entered into no-cold-calling agreements with Intel and Intuit, the department said.
Zenia Mucha, a spokeswoman for Disney, based in Burbank, California, and Steve Dowling, a spokesman for Cupertino, California-based Apple, didn’t respond to requests seeking comment.
The settlement, if accepted by a federal court in Washington, would be in effect for five years, the department said.
The case is United States v. Adobe Systems, 10cv1629, U.S. District Court for the District of Columbia.