Engineers Allege Hiring Collusion in Silicon Valley

So their salaries were held down by collusion among the companies, then when they get to be 45, they start having a hard time getting hired, eventually not being able to get work in their field. So their ability to save money for when they get older is reduced.

http://www.nytimes.com/2014/03/01/technology/engineers-allege-hiring-collusion-in-silicon-valley.html?partner=MYWAY&ei=5065&_r=0

By DAVID STREITFELDFEB. 28, 2014

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.

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“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.”

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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.

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They certainly tried to keep their practices quiet. Eric E. Schmidt, then Google’s chief executive, said he preferred that the company’s Do Not Call list be shared orally, according to court papers, “since I don’t want to create a paper trail over which we can be sued later.”

In a similar vein, an Intel recruiter asked Paul S. Otellini, the company’s chief executive, about a hands-off deal with Google.

“We have nothing signed,” Mr. Otellini responded in an email. “We have a handshake ‘no recruit’ between Eric and myself. I would not like this broadly known.”

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In the summer of 2007, Palm Inc., a maker of hand-held devices, hired Jonathan J. Rubinstein, a highly respected former Apple executive who played a key role in developing the iPod. Apple engineers were clamoring to work with him.

Mr. Jobs proposed a no-poaching deal to Edward T. Colligan, Palm’s chief executive. Mr. Colligan responded that such a deal would be unfair to employees as well as “likely illegal.” Mr. Jobs then threatened to unleash Apple’s patent lawyers on Palm.

A patent suit “certainly had the potential for creating some havoc,” Mr. Colligan said in an interview. But he said he felt it was important not to bend.

“A lot of times you’re confronted with things that may be advantageous, but you have to make the critical decision that morally, it is not right,” he said, noting that Apple never did sue. “Unfortunately, this does not happen as often as it should.”