Funny thing about so-called free market advocates who find themselves as guests on a lot of cable TV financial shows. They talk the talk, but then you find out that they don’t always walk the walk.
Now, don’t get me wrong — I’m an unrepentant capitalist myself with very firm libertarian leanings, which means I favor limited government intrusion into our boardrooms and bedrooms. On the other hand, I also appreciate the need for reasonable regulation and the fair administration of justice. Finding a way to balance all of those sometimes competing beliefs presents quite a challenge.
Which brings me back to all those big shots who mouth off about free markets, capitalism, American entrepreneurial spirit, and, the like. Funny, isn’t it, how so many of those folks turn out to be hypocrites. The first chance they get to rig a deal or the system, why all their high fallutin’ free market passion evaporates.
Consider the following circumstances:
agreed not to cold call each other’s employees. Generally, the off-setting company to the agreement was placed on the other company’s internal “Do Not Call” list, which instructed employees not to directly solicit employees from the covered firm.
Cold Call Freeze
On September 24, 2012, Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar settled with the Department of Justice concerning allegations in a civil antitrust Complaint that they had entered into non-solicitation agreements involving their highly-skilled employees. Rather than merely understandings formulated and enforced at the lower echelons of the cited organizations, the Complaint alleged that the agreements were formed and actively managed by senior executives. Apparently the C-Suites saw eye to eye.
In the high technology sector, there is a strong demand for employees with advanced or specialized skills, and among the principal means by which high tech companies recruit such candidates is to solicit them directly from other companies via “cold calling.” By restricting cold calling and putting in place what basically amounted to a ceasefire against poaching, the cited companies allegedly engaged in anticompetitive non-solicitation agreements. Although the Complaint alleged only that the companies agreed to ban cold calling, the settlement more broadly prohibited the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees.
For More Details, see these source materials inUnited States v. Adobe Systems, Inc., Apple Inc., Google Inc., Intel Corporation, Intuit, Inc., and Pixar
Missed One
Oops . . . the Antitrust Division seems to have missed one. On November 16, 2012, the Department of Justice / Antitrust Division filed a civil antitrust lawsuit in the Northern District of California against eBay Inc., alleging that beginning no later than 2006 and lasting at least until 2009, eBay and Intuit entered an illegal agreement that restricted their ability to actively recruit certain employees from the other company, and for some period of time even restricted at least eBay from hiring any employees at Intuit. Seems that the two company were frequently in direct competition over retaining the services of computer engineers, scientist, and other specialized employees covered by the non-competition agreements. In 2007, eBay agreed that it would not recruit Intuit’s employees. eBay’s recruiting personnel were instructed to not pursue potential applications that came from Intuit and to throw away such resumes.
You remember Intuit, don’t you? It was among the six firms cited in the 2010 Complaint. Looks like poor old eBay got snared into the cold-call cold war and agreed to the same brokered deal about no poaching. The 2012 antitrust lawsuit asserts that the Intuit / eBay agreement eliminated competition to the detriment of affected employees, who were likely deprived of access to better job opportunities and salaries. Notably, Meg Whitman, then eBay’s CEO, and Scott Cook, Intuit’s founder and executive committee chair, are alleged to have been intimately involved in forming, monitoring and enforcing the agreement. Again, the C-Suites seem to have seen eye to eye.
The antitrust lawsuit seeks to prevent eBay from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies. Intuit, of course, was already subject to the 2010 settlement noted above and it was not deemed necessary to name that firm in the new complaint. The theory is that the relief the obtained in the previous settlement with Intuit is sufficient to prevent the firm from entering into these types of agreements. The investigation by the Antitrust Division of the eBay / Intuit non-competition agreement arose from the division’s December 2010 lawsuit against Lucasfilm for entering into a similar agreement with Pixar.
Bill Singer’s Comment
You may enjoy a stroll down memory lane to May 25, 2010 when then California Gubernatorial candidate Meg Whitman appeared on CNBC’s “The Kudlow Report” and, among other things, complains that California is”losing too many jobs overseas and to other states.” Whitman promises an innovative “plan to create two million private sector jobs by 2015.” (about 2 minutes into the tape)
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