
Emails From Schmidt And Sergey Brin Show Agreements Not To Hire Apple Workers - sgy
http://www.businessinsider.com/emails-eric-schmidt-sergey-brin-hiring-apple-2014-3?utm_content=buffer7d246&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
======
firstOrder
> Meg called to talk about our hiring practices. Here is what she said. Google
> is the talk of the valley because we are driving salaries up across the
> board. Then Eric Schmidt says: > I would prefer Omid do it verbally since I
> don't want to create a paper trail over which we can be sued later

So Silicon Valley execs were illegally conspiring to drive down wages, and who
knows how much more was done outside of the paper trail mentioned.

Then we have an article discussion yesterday and blog posts etc. in the past
few weeks about how companies can't find great engineers, and how we need
immigration law changes that blocks Mexicans etc. but brings in more engineers
to drive down engineer wages etc.

Maybe if CEO's weren't illegally conspiring to drive wages below their market
value, there wouldn't be a so-called "engineer shortage"?

I mean it's risible. They conspire illegally to drive down wages, then whine
that not enough people want to work in this field where wages have been
artificially and illegally deflated.

~~~
icambron
Colluding to hold down wages is terrible and I hope they get in a lot of
trouble for it. But this doesn't follow:

> Maybe if CEO's weren't illegally conspiring to drive wages below their
> market value, there wouldn't be a so-called "engineer shortage"?

What illegally driven-down wages mean is that the shortage is _more acute that
previously thought_. That's because the main way to measure the relationship
of supply and demand is through price; i.e. the more the salaries grow, the
less supply there is relative to demand. So if salaries have been held down,
some of that evidence was masked.

Secondly, it means that non-giant companies could be competitive in making job
offers, whereas perhaps in a more free labor market they might not be able to
compete salarywise with Google, Apple, Microsoft, etc. Thus, as seen from say,
a startup's vantage point, this check on the upward price pressure actually
kept the supply of affordable engineers up.

So I remain sympathetic to the there-aren't-enough-programmers line of
thinking, and certainly don't think of this as hypocritical or antithetical to
that line. Of course, that doesn't excuse any of Google's behavior here;
they've effectively stolen a great deal of money from all of us through
illegal collusion, pocketing the money that an honest market would direct into
the engineers' bank accounts. I hope there's hell to pay.

Edit: I suppose it's theoretically possible that if the salaries went up to
their natural levels, then people would pour into the field, and perhaps
that's what you're trying to say. I think that's very unlikely, since software
engineers are already paid a great deal more than most fields, so these people
are either people who don't care about money unless it's a _lot_ of money, or
they're people who instead chose to be doctors and lawyers. I'm sure more
people would say, "hmm, maybe I should be a programmer", but you have to ask
why those people aren't doing it now. As economists might put it, this is a
structural problem, not a market problem (I hope I'm using those terms right).

~~~
TheCoelacanth
> What illegally driven-down wages mean is that the shortage is more acute
> that previously thought. That's because the main way to measure the
> relationship of supply and demand is through price; i.e. the more the
> salaries grow, the less supply there is relative to demand. So if salaries
> have been held down, some of that evidence was masked.

Not really, price ceilings have a well-known effect of causing shortages
because purchasers who should have been priced out of the market use up some
of the supply. If the price had been allowed to rise naturally, those willing
to pay the higher price would get what they need.

~~~
legutierr
You also can't look at the market statically. Higher wages will create
incentives for new people to enter the profession, increasing overall supply
(and eventually putting some downward pressure on salaries once again).

~~~
anigbrowl
That's true in theory, but I don't think there are a lot of people ignoring
the tech sector because median pay for a competent engineer is only ~$100k.

Sure, you can find examples of people who went into other areas, but given the
very low barriers to entry (put some good stuff on Github repeatably, no
industry requirement for an advanced or even undergraduate degree if you have
talent, no unions or guilds, no competency certifications required to practice
software engineering), I don't think there's such a big pent-up supply.

~~~
meric
I live in Australia and work in a small company and $100k just isn't enough to
entice me to go over to the US to work for Google et al; It isn't that much
more than what I make now, plus I get to live close to home. And yes, I can
choose to move to US if I want, due to the E-3 visa.

I'm sure there are a lot more people like me.

~~~
robrenaud
Even the bottom level full time software engineers at Google in the US make
more than 100k in total compensation.

~~~
meric
I've only just graduated from university last year, so...

------
peeters
This is appalling to read, and it's frightening how blasé they are about
blatantly illegal and unethical non-competition. Yet, I think the article
misrepresents Schmidt firing the recruiter:

>Here, Schmidt relates a phone call he had with eBay CEO Meg Whitman and then
orders his own recruiter to be fired because that person tried to poach the
COO of eBay.

Reading the email, it doesn't seem like the recruiter was fired for trying to
poach the COO; it seem like he was fired for lying to the target about the
position (as Schmidt calls them, "falsehoods"). Don't forget recruiters
usually get a significant finder's fee, and are not above misrepresenting a
position to generate interest.

------
andy_ppp
Ah... So it was always "Be Evil" and fuck over your employees. It always
amazes me that these people love free markets, until it's expensive and then
they break the law deliberately to pay slightly less than the fair market
price to the best and brightest.

Effectively stealing from their employees to give to their shareholders just
blows my mind.

~~~
doktrin
It's important to not gloss over Apple's role in this. Based on the emails
that I have seen, they were the driving force behind these agreements.

Yes, Google's "don't be evil" mantra is tempting low hanging fruit. They
dropped the ball here, but so did most of the valley. Nobody should be getting
free passes in the court of public opinion.

~~~
andy_ppp
Very true... I feel that if workers tried to steal billions of dollars from
the rich they would get thrown in jail. The other way around and we're
_trained_ to believe that's preposterous.

~~~
n09n
>I feel that if workers tried to steal billions of dollars from the rich they
would get thrown in jail

Why is that? All evidence points to the contrary. Take for instance, the
collapse of the housing market a few years ago. Not only were the borrowers
not jailed, most people even blame the bankers.

~~~
wavefunction
The bankers' entire business of lending is predicated on their understanding
of risk and proper extension of credit dependent on that risk. To extend
credit as they did to people who were obviously not credit-worthy is to
abandon the main responsibility of their profession and for what? Short term
personal gains via "performance bonuses" based on volume?

The bankers deserve blame and jail time for endangering the entire economy
with their short-sighted greed.

~~~
vidarh
Exactly.

For some perspective: In the UK, if a bank extends credit to people who were
obviously not credit-worthy at the time of applying, based on the information
available to the bank, not only is the debtor not at fault, but the debts can
in many cases be wiped out by the courts. And it happens regularly - people
have had entire mortgaged just struck off because the banks were found to have
acted irresponsibly when giving them out.

The banks here have a _legal responsibility_ to understand their customers
ability to repay, and to not extend credit that is likely to cause their
customers substantial financial hardship.

The reasoning for this is that there's a massive information symmetry - most
people do not understand the full risks, and are easily seduced by the thought
of a new house and possibly smooth talking real estate agents to look at think
in the most rosy way possible, while the banks know very well the hard data on
what financials are likely to cause defaults when you take into account risk
of unemployment, budgets, unexpected repairs, likely interest rate movements
etc..

------
zaxxon
Just gonna throw my perspective out there, since I was a firsthand witness to
this stuff.

I started at Google in 2005 as an ordinary software engineer, and I've not yet
left them. Back then, Google recruiters were constantly bugging employees for
referrals. But this "no poaching" thing wasn't some weird dirty secret among
execs -- it was just sort of a common knowledge thing, and nobody seemed to
think it was a big deal. "Oh, we have a gentleman's agreement with Apple not
to poach them and vice versa -- so give us the names of your friends to reach
out to, but not if they already work at Apple."

AFAICT, the reason I (and my coworkers) never thought of this policy as
illegal is probably for two reasons:

1\. Hey, poaching back and forth would create a lot of disruption and churn
and mess up both companies' ability to get things done. Let's not start a
pointless war.

2\. We, as programmers, are ridiculously overpaid already. How could anyone
possibly be "taking advantage" of us at these salaries? The notion seemed as
absurd as a Programmer's Labor Union!

Again, the idea was not to _poach_ , not to avoid hiring. If somebody from
Apple applied for a Google job of their own will, that was fine.

In hindsight, I /guess/ I understand how this looks like evil collusion to
keep salaries down... but really it seemed like common sense and civility at
the time. At least that's how it was sold to us. It was sort of like the
nuclear policy of Mutually Assured Destruction: "the only way to win is not to
play." It's the same attitude that still explains why giant companies don't
(typically) begin patent wars -- there's no point if everyone ends up
destroying each other.

~~~
icambron
You were duped.

> We, as programmers, are ridiculously overpaid already. How could anyone
> possibly be "taking advantage" of us at these salaries?

Overpaid by what metric? Compared to society at large, you make a lot money,
yes, but you're also contributing significantly to one of the most profitable
companies in the world. Google has a profit of about a million dollars per
employee per year; why aren't you capturing more of that? [1]

If you're not taking that money home, someone else is. What do you bet those
people are the ones telling you this is all in the name of civility?

[1] E.g. [https://signalvnoise.com/posts/2283-ranking-tech-
companies-b...](https://signalvnoise.com/posts/2283-ranking-tech-companies-by-
revenue-per-employee) I confess I don't know the numbers for 2005, but it
should be easy to look up.

~~~
usaar333
> Google has a profit of about a million dollars per employee per year

Revenue, not profit. Profit is closer to $250k

~~~
icambron
You're right that my source was the wrong thing for that (I wasn't careful
enough in my quick search). But profit per employee per year is much closer to
a million than 250K. Here's the source I should have used
:[http://csimarket.com/stocks/singleEfficiencyeit.php?code=GOO...](http://csimarket.com/stocks/singleEfficiencyeit.php?code=GOOG)

Note the numbers are _quarterly_ , so that comes out to $900K. I was off a
bit, so point taken, but my original point mostly stands, I think.

~~~
usaar333
Where is that source getting data?

Using Google finance:
[https://www.google.com/finance?q=NASDAQ%3AGOOG&fstype=ii&ei=...](https://www.google.com/finance?q=NASDAQ%3AGOOG&fstype=ii&ei=e3AwU7DDDonfiAKD1gE)

Google made almost $13B in net income last year. They had 47,000 employees in
Dec '13.

That's about $275k/employee in net income.

~~~
icambron
Hmm, yeah. Maybe they erroneously used gross profit (which is useless here). I
cede the point.

------
yonran
The collusion allegations sound serious, but I believe the pando.com article
has a couple misunderstandings and is overly sensationalist:

1\. It is not illegal for a company to have its own “Do Not Cold Call” list.
If you know that poaching your allies’ employees is likely to jeopardize the
joint projects, you may choose not to poach your allies’ employees. If you
know that poaching your competitor’s employees will likely provoke them to
poach your own employees, you may both choose to avoid the mutually assured
destruction. As far as I know, it is only illegal to collude with your
competitor to make such a list. But it appears that Google did have illegal
agreements.

2\. One of the quotes from a Google memo, “Most companies have non-solicit
agreements which would limit or prohibit a candidate from asking a coworker to
interview with us as well,” appears to have nothing to do with anticompetitive
behavior. Instead, it probably refers to non-solicit agreements that employees
often must agree to when joining a company that prohibit the employee from
poaching one of their coworkers for a time after leaving the company. The memo
warns not to pressure employees to violate contracts they have signed with
their prior employers.

------
thrownaway2424
Interesting choice of subjects in the headline. I see that Saint Steven's
reputation is still off-limits. My reading of the first two emails is that
Jobs was a raging asshole in every facet of life and business.

------
ucha
The same way the SEC opens insider trading investigations based solely on
market data - eg. unusual volume of transaction preceding a major unplanned
announcement - a government body should mine employment data from LinkedIn for
example and investigate cases where there are very few employees switching
jobs between large corporations.

This is even more unsettling when you realize that Google, Apple and such have
employees that generate revenue in the range of a million dollar per head yet
pay a average salary that is 10-20% of that. They end up with absurdly large
piles of cash that banks and financial institutions never see because they
compensate their employees more fairly.

~~~
mschuster91
How do you quantify in a team how much money a specific employee generates to
the company?

~~~
ForHackernews
Does it matter whether you get the granularity down to a single individual?

If a 10 person team builds a product that delivers $100 million in revenue for
a company, and the team members are paid $90k on average...then they're pretty
underpaid.

~~~
mschuster91
Well, this might be working for a team of 10 elite-class programmers... but
what about those working to support them?

Like, IT maintenance staff, HR, accounting, marketing etc.

Without either of those, the programmers would not earn a single cent. Now,
how do you determine how to pay the support staff? What do you do when one
group of HR staff works for a stellar, 100M+$ team and another HR staff group
works for a 1M+$ team? Pay the same? Pay different?

~~~
nitrogen
How replaceable or irreplaceable are the support staff in this scenario?
What's the ramp up time for a new member of the support staff compared to a
new member of the team in question?

------
fatjokes
I have to say, the only person that disappoints me in all of this is Sergey
Brin. I guess I kind of expected everybody else to be a douche, but he's
fostered this free-thinking Tony Stark/Ironman persona and this just makes him
seem like a coward, who caved the instant Steve Jobs came-a-ranting.

------
unfamiliar
As I understand it, they were still allowed to hire from each other, they just
agreed not to poach employees from each other. That doesn't sound so
unreasonable to me.

~~~
dangero
I can see your point. Even without written agreements there are unspoken
agreements amongst friends in this regard. For example, if I own a small
business, and so does one of my friends, it goes without saying that him
poaching my team would feel like a stab in the back.

What I find interesting in this whole story is the value that these executives
put on the teams they have built. Of all of the things that Steve Jobs could
be worried about as the CEO of one of the largest companies in the world, he's
spending his time stressing about losing a few engineers to Google? As an
engineer this makes me happy, but I still find it a bit surprising.

These executives knew an agreement like this would have to be delegated to a
vast number of people. To me this means they didn't think it was a big deal. I
say that because if they were doing something they viewed as extremely illegal
they would have been concerned that someone in the delegation path would blow
the whistle. Seems to be a crisis of perspective at that top.

~~~
com2kid
> he's spending his time stressing about losing a few engineers to Google?

That is the amusing part! The agreement explicitly excludes engineers.

From the article:

"3\. Additionally there are _no_ restrictions at _any_ level for engineering
candidates."

(emphasis theirs)

This was about sales and management.

~~~
morpher
Why was this downvoted? The discussion in these articles has all seemed to
ignore the fact that engineers were explicitly excluded from the agreements.

~~~
magicalist
Because it's wrong? That line is in the "Restricted Hiring" part of that
document. The "Do Not Cold Call" section didn't include that caveat.

------
gamegoblin
I'm not very knowledgable of this sort of thing -- what have other professions
historically done to mitigate this sort of thing? Unions? Licensing boards?

~~~
rayiner
Class action lawsuits.

I find this agreement and the Facebook sponsored stories feature baffling.
They remind me of when Korean companies have gotten caught up in price fixing
and invoked the excuse "we had no idea this would be illegal!"

~~~
selmnoo
Huh? "Facebook sponsored stories feature"?

~~~
rayiner
[http://m.huffpost.com/us/entry/4574644](http://m.huffpost.com/us/entry/4574644)

~~~
selmnoo
Oh. Yeah. That's how SV works. (I didn't know about this particular story
though... must have missed it).

It's basically just another variant of a dark pattern.

They're everywhere. It's basically what fast growth is all about. It's about
skirting some rule that you know very well is illegal or at least unethical --
and later when you get caught doing it, saying "Ooops!!! I didn't know this
was illegal, LOL!"

Go to [http://darkpatterns.org](http://darkpatterns.org) to get more examples
of dark patterns. Facebook in particular is expert at it, e.g. see
[http://darkpatterns.org/library/privacy_zuckering](http://darkpatterns.org/library/privacy_zuckering)
\- the clear lesson to take away for startups is, don't give a fuck, do
whatever unethical shit you can do to attain a large userbase, get big, get
funding, and then either a) deny any wrongdoing was ever done, or b) justify
it with some excuse like "we were young :)" or "we didn't know!" Sometimes you
have to pay a fine, but you can be assured that the fine will be smaller than
the profit made/growth achieved by some particular action. It's a winning
strategy.

p.s.: Here's a fun challenge: try to turn off targeted advertising on an Apple
device. Can you do it? (fwiw, it's much easier to do on iOS7 vs iOS6).

------
abalone
Like many of you I am one of the engineers that's covered by the suit and may
stand to benefit from it.

Having said that, I want to play devil's advocate for a second. It's just my
natural reaction when the press embeds big unquestioned assumptions in
reporting for the sake of sensationalism -- namely that this is obviously
"illegal" and nefarious behavior. Because, after all, it kept down wages for
people like me who might otherwise have been more actively recruited.

If your reaction is OF COURSE IT'S ILLEGAL, just hold on a second. Try to
think about the counterargument rationally, even if it's against your personal
interests. (That's what I'm doing.)

There do exist many precedents for agreements and restrictions on seemingly
"competitive" behavior that is deemed "unfair".

Let's consider a related example from another domain: countries "dumping"
cheap goods into foreign markets. For example, China is accused of "dumping"
subsidized steel into the U.S. market, which hurts the industry here. The U.S.
steel industry works with the government to put in place tariffs that block
the practice.

So is the U.S. steel industry being anti-competitive here? Have they engaged
in an anti-competitive pact with the U.S. government conspiring to keep up the
price of steel here?

Well, on the surface, _yes they have_. But the distinction is that "dumping"
is meant to describe a particular form of competition that is _short term_ and
_unsustainable_ in nature and designed primarily to destroy competing
business. It is meant to isolate a specific practice that actually hurts
competition in the long run.

So, what about the practice of poaching employees from competitors? Well think
about it for a minute.

What is the value of a Safari engineer to Google's nascent Chrome team? The
truth is, it's a _lot_ more than just that engineer's skillset. There's also
the value of _undercutting Apple 's Safari development_. That's HUGELY
valuable to a competitor.

So, I just wanted to put it out there that at first blush at least, that the
practice of "poaching" may actually have an anticompetitive angle. Just like
with "dumping", you have to look beyond the immediate act
(restricting/boosting prices) and examine the particular practice it's
attempting to curtail.

~~~
icambron
If you were arguing that Google was hiring all those people in a way that was
_short term_ and _unsustainable_ , you might have a point. But unlike the US
steel example [1], you haven't made such an argument. You've just argued that
competition can damage companies, which of course is part of the point.

One way to look at anti-competitive rules is that the point isn't to protect
companies at all. In the steel case, the point is that dumping will destroy
the American industry and then--this is the crucial part--China can hike up
its prices way above current levels because there's no competition. If China
couldn't do that for whatever reason, then that would be great for American
consumers, who would benefit from cheaper steel, and--in principle at least--
the competition rules would do nothing about it. In other words, in theory,
the law doesn't care about the American steel industry; it only cares about
the long-term well-being of steel consumers, which requires sane pricing. That
industries have co-opted that in all sorts of ways to ironically entrench
their positions in anti-competitive ways should not distract you from the core
purpose of the rules.

So applying that here, since the rules in question are meant to protect the
workers, the problem would be if Google were hiring all these people to
destroy Apple and then be able to slash salaries, since no one would have
anywhere else to go. Since that strikes me as implausible, and at the very
least not established, I can't see how we can think of Google's poaching as
anti-competitive.

[1] I'm not sure I buy the US steel argument either, but that's a separate
discussion.

~~~
abalone
It's a slippery slope for sure. And given your skepticism of even the US steel
case, I can imagine where you stand on that slope. Which is fair.

But to complete my devil's advocate argument, "poached" offers could in fact
be unsustainable in the long run. It may be worth it to Chrome to add a $100K
signing bonus to a Safari engineer. But they're not going to be paying them an
extra $100K above market year over year.

If there actually were a poaching war kicked off, you can imagine that the
value of inflicting targeted damage on competing teams, and protecting teams
from such damage, could balloon to a very large amount. Theoretically all the
way up to expected profit, if there were no other mechanisms to prevent it.

This could have a chilling effect especially on startups entering competition
with deep-pocketed big companies. They could just poach the best talent with
offers the startups couldn't match. That's exactly like a big chain engaging
in loss-leader tactics to destroy local competition.

You could maybe also draw a parallel with what's going on with patents right
now. It's a huge tax on development, especially to startups.

Now that I think about it, this could very well backfire on all of us. Anti-
poaching agreements among companies aren't the only way to prevent this sort
of thing. If they get sued over that (which is targeted at the practice of
poaching), what companies may start doing is figuring out more restrictive
covenants in employment contracts. Exclusivity clauses, etc. I'm a little
scared to think what they may come up with and standardize if their attention
is focused on it.

~~~
arg01
I'd love to see those contracts. They either have to put in a nice big juicy
monetary penalty(If it's not your new employer will cover it) that each year
at your pay review you can point to and say you obviously think me leaving is
worth this much why am I paid 2-20% of it, or they chuck in a non-compete
which are often unenforceable (unless they continue to pay you) or doesn't
really matter to the hiring company as they can stick you with an unrelated
project as they're not looking to capitalize on your skill as much as screw
the other company. Really the only way I see it working is with deffered forms
of payment which means more equity or performance bonuses. Maybe I'm just not
imaginative enough.

~~~
abalone
See right there, that "imagination" is what I'm talking about: companies
figuring out a way to shift compensation into long-term rewards that
disincentivize employees from considering unanticipated competitive offers.

The problem is you seem to think it's only additive and therefore great for
employees. Hey, more bonuses, more equity.

But if _everyone_ adopts it as a standard operating procedure, it could lead
to a lowering of base salaries. So then we get paid like salespeople: little
salary, mostly performance based. Do you want that?

Bottom line, it could be opening a can of worms. My personal philosophy is
that it's rarely good to be righteous and inflexible. It often backfires or
escalates a situation.

------
confluence
This is real theft. I applaud my free market overlords for such setting fine
examples of Machiavellin psychopathy and systematic duplicity, where they on
the one hand lament the "shortage" of engineers and the failure of the
education system, whilst simultaneously depressing the wages that should have
been demanded from the fruits of that self same system.

Fuck. These. Assholes.

------
aaronbrethorst
To quote Stringer Bell. Again.

"[I]s you taking notes on a criminal fucking conspiracy?"

Setting aside issues of ethics and legality, I cannot believe that any of
these people would ever commit _any_ of this to electronic record.

~~~
therobot24
one of the best quotes from the series

what's more astounding is that eric deliberately says in an email to send the
message orally so they don't get sued

------
yuhong
"Brin appears to not know what the nature of the agreement is between the two
companies."

I still remember a HN thread which suggested that Larry/Sergey fire Eric
Schmidt for this:
[https://news.ycombinator.com/item?id=3523513](https://news.ycombinator.com/item?id=3523513)

~~~
dangrossman
That's two weeks before the no-hiring agreements were put into place.

------
briantakita
Since this has market-wide effects, it seems fair to compensate _all_
engineers working in the bay area during that time period.

------
ForHackernews
From 2006

> he was sure we were building a browser and were trying to get the Safari
> team

Well he wasn't wrong...

When did work start on Chrome? First release was in 2008.

~~~
jfoster
... and "i told him we were not building a browser". I can see 3
possibilities:

1\. That was a lie. Perhaps I'm naive, but I would expect him to say that he's
not going to discuss the Google product line-up.

2\. They were not building a browser, but Steve's accusation got them thinking
about building a browser.

3\. They were not building a browser, but later decided to build a browser.

~~~
mike_hearn
Er, did you read the email? Brin explicitly says they have people working on
Firefox and were thinking of making a modified version of it, but hadn't made
the final call yet.

------
kaonashi
I'd like to see criminal prosecutions here.

------
naveenspark
Not sure why this is ruffling so many feathers. There are thousands of great
tech companys to work for that aren't on any Google, Apple or EBay "no-hire"
list and vice versa. I fail to see how a few big companys agreeing not to
poach talent from each other artificially reduces the total compensation
ceiling industry wide.

~~~
skaevola
It was more than a couple of top tech companies:

[http://pando.com/2014/03/22/revealed-apple-and-googles-
wage-...](http://pando.com/2014/03/22/revealed-apple-and-googles-wage-fixing-
cartel-involved-dozens-more-companies-over-one-million-employees/)

------
w_t_payne
Since our employers are clearly not above playing juvenile dirty tricks,
what's to stop us engineers returning the favor?

Other professions (Doctors, Lawyers) use legislation to restrict the supply of
labor and drive up prices, so why should software engineers be any different?
We currently make ourselves vulnerable to manipulation and abuse in a way that
no other profession has been stupid enough to do for centuries.

We should lobby aggressively for legislation requiring professional
accreditation for practicing software engineers, as well as for the provision
of training and documentation services. We need to shut down the technical
MOOCs, as well as efforts like stack overflow and code academy. All of these
things, whilst seemingly noble, do our profession grievous harm.

------
cromwellian
The behavior seems slimy (otherwise there'd be no need to be all cloak-and-
dagger about it), but the interpretation seems sensationalist (Pando: "Price
Fixing!"). As far as I can tell from the evidence, this was a 'no cold call'
agreement, not an agreement not to hire people who apply or to set their
wages, perhaps with the exception of high level managers or executives, most
of whom, if they wanted to demand higher salary, could leak or threaten to
leave for another company, and who are often under other constraints. In fact,
it's not even clear this is about wages per say, but the disruption that comes
from breaking up team and concerns over intellectual property/trade secrets
leaking.

I'd be pissed if I applied for another job and was turned down purely because
of my previous employer. But I'm not phased by avoiding cold calls. I still
get loads of emails trying to recruit me and they're mostly annoying. If I
decide to switch jobs, it'll be because I initiate it, not because of HR reps
phoning me.

If you were around during the last dot-com boom, you may remember the
ridiculous poaching that went on, startups offering insane signing bonuses and
other perks, employees changing jobs after only a few months on the job. I
worked for a company once that had $100+ million in Softbank funding, and
funneled a huge amount of it through headhunters which received a bounty on
each hire, and were incentived to bribe prospects to quit their current job.

I'm not sure this is healthy for the industry as a whole. There's already an
apparent bubble in asset prices and cost of living in the Bay Area, and while
it seems good for some tech workers in the short term to have salaries pumped
through the roof, I'm not sure it's good for the overall tech economy, or the
economy in general.

I'm somewhat sympathetic to the notion that companies want to avoid aggressive
and invasive poaching on each other's workforces, it could turn into mutually
assured destruction. If I had a startup, I'd be pissed of someone came along
(and poached my employees instead of an acqui-hire) that I spent significant
amounts of resources recruiting and training.

To read some of the press articles, you'd think this was the Grapes of Wrath
or something, that poor tech workers, the ones who drive around in luxury
busses and pay $3000-5000/mo for studio apartments in SF, are woefully under
compensated. I wonder if this was a story about Goldman Sachs and JP Morgan
conspiring to keep down the compensation of Wall Street money managers through
no poach agreements, we'd have the same coverage.

Here's analogy. Let's say there is an employee marketplace. Employers list
jobs for offer and salary. Employees list skills, availability, and asking
salary. If the employers don't conspire to artificially restrict the offers
and salary prices listed, would we say this is a competitive market with no
price fixing?

Ok, now let's say that besides listing the jobs and prices, Employers activity
solicit buyers. With stocks regulated because of issues
([http://www.sec.gov/answers/cold.htm](http://www.sec.gov/answers/cold.htm)).
But let's say employers cold call the employees and tell them to 'buy' a
particular offer. Then at some point, the companies cease using sales forces
to go out and cold call people to buy these offers. Instead, employees must
come to the market of their own accord and bid on them. Is this really price
fixing?

If all brokers stopped calling you trying to get you to "Buy XYZW", you
wouldn't consider them trying to manipulate the price of XYWZ.

~~~
Curmudgel
>If you were around during the last dot-com boom, you may remember the
ridiculous poaching that went on...

>I'm somewhat sympathetic to the notion that companies want to avoid
aggressive and invasive poaching on each other's workforces...

>If I had a startup, I'd be pissed of someone came along (and poached my
employees instead of an acqui-hire) that I spent significant amounts of
resources recruiting and training...

I find the term "poaching" in this context to be disgusting. Employees aren't
game captured by underhanded or illicit tactics. Employees are human beings
that think and make decisions for themselves, and talk of them being "poached"
as if it wasn't their choice is offensive.

>There's already an apparent bubble in asset prices and cost of living in the
Bay Area

House prices are artificially high because of NIMBY zoning laws set by the
very wealthy , and NOT the tech employees in question. The strata of middle
class are being pitted against each other by the wealthy.

> and while it seems good for some tech workers in the short term to have
> salaries pumped through the roof, I'm not sure it's good for the overall
> tech economy, or the economy in general.

When a company keeps the money instead of paying its employees, the money is
funneled to stockholders, who are in general richer and fewer in number than
the employees. Are you seriously suggesting, in spite of the abject failure of
trickle down economics, that giving money to the middle class tech workers
instead of the wealthy (owners of the company, and shareholders) is bad for
the economy?

>To read some of the press articles, you'd think this was the Grapes of Wrath
or something, that poor tech workers, the ones who drive around in luxury
busses and pay $3000-5000/mo for studio apartments in SF, are woefully under
compensated

"No poaching agreements" ineluctably means THEFT. $10,000 a year extra is a
_lot_ of money for tech workers and their families. The victims were skilled
workers that were deserving of the pay stolen from them. Your suggestion that
we shouldn't empathize with any victims of theft if they're not destitute is
fatuous and offensive.

~~~
fecak
>I find the term "poaching" in this context to be disgusting. Employees aren't
game captured by underhanded or illicit tactics. Employees are human beings
that think and make decisions for themselves, and talk of them being "poached"
as if it wasn't their choice is offensive.

The word "poach" by definition isn't exclusively tied to animals, but rather
refers to property or other potential resources associated with another.

~~~
johngalt
Got it, not animals... _property_

~~~
fecak
Take your pick. "To take without permission", or "to catch by trespassing on
private property", is that better?

Feel free to be outraged by the practice of collusion, but is it worth getting
upset about a vague slang industry terminology?

[http://dictionary.reference.com/browse/poach](http://dictionary.reference.com/browse/poach)

------
lucidrains
Meanwhile in medicine we need the AMA to keep physicians in short supply so
the wages stay high...

------
zxexz
Whatever happened to "Don't be evil" :(

------
radoslawc
Genentech ([http://www.gene.com/](http://www.gene.com/)) is also on "do not
cold call" list. How this company is related to google's business profile?

------
nppc
Now lets talk about "Don't be Evil!"

------
stretchwithme
I personally don't care if employers agree not to hire each other's employees.
People are free to make agreements if they want to, just as employees are free
to not work for them. There's nothing immoral about it.

Are you free to use the power of the state to try an boost your salary? I
don't think you should be able to do that. But apparently many people do.

~~~
doktrin
> _People are free to make agreements if they want to, just as employees are
> free to not work for them._

No, they're not. This is anti-competitive wage suppression. It's illegal.

> _Are you free to use the power of the state to try an boost your salary? I
> don 't think you should be able to do that. But apparently many people do._

Pretty sure that's illegal too.

~~~
n09n
You're pretty sure raising the minimum wage is illegal?

~~~
doktrin
The original statement clearly implied government corruption. After all, those
raising the minimum wage don't earn it themselves. Thus, they're not "using
the power of the state to boost their salary".

~~~
stretchwithme
What I was referring to was trying to prevent people from making agreements
that make it easier to keep their employees. Putting a stop to that would be
using the state as a way to make more money.

And, yes, those lobbying for something are a different group than those
approving. But I bet if I lobby for something you don't like that gets
implemented, I'd be responsible for it, if not wholly responsible.

------
nicolethenerd
Genuine question - I see a lot of references to the fact that this practice is
"illegal", but what law is it violating?

~~~
fecak
Antitrust law such as Sherman. [http://www.justice.gov/atr/about/antitrust-
laws.html](http://www.justice.gov/atr/about/antitrust-laws.html)

------
zacinbusiness
I'm confused about this entire situation. If I own a company in the US then
it's my right to not hire from someone else's company if I so choose, yes? And
in the case of tech giants then there is a lot of proprietary tech knowledge
that can exist in an engineer's brain that may make him or her a very
strategic hire for my competition. So, if I'm paying an engineer $100K and
Google sees fit to hire them away for $200K then, sure, it's in the engineer's
interest to tell me because then I would need to offer $250K to keep them. And
this isn't because they have suddenly become more valuable, or because the
engineer has suddenly developed new skills, it's simply a game of strategy and
money that could potentially hurt both businesses. So, it makes sense to me
that companies would agree to skip the drama, and just agree not to poach
talent from each other. And, honestly, how many Apple designers, Google
engineers, or EBay executives have gone hungry because of these non-compete
agreements? When you're playing in that league then you are already extremely
well compensated. So, is it simply a matter if principal? Why exactly is it
illegal? These are honest questions.

~~~
asdfologist
It's illegal for the same reason that it's illegal for companies to collude to
fix prices. You could apply your same arguments.

~~~
zacinbusiness
I guess so. But also it doesn't seem that companies are artificially keeping
wages low. I mean if an engineer at a tech company isn't happy with his salary
then he wouldn't have taken it in the first place, right? It's not the same as
a person taking a job at a grocery store because they simply don't have other
options. Top talent gets head hunted all the time. So if they want a better
salary couldn't they just go somewhere else that pays it, as long as it's not
a company that's part of the agreement?

~~~
asdfologist
Not necessarily. Keep in mind that the wages at the big tech companies affect
wages at other firms. If the big techs drive down wages, then wages will go
down at the smaller firms as well.

~~~
zacinbusiness
Ah yeah that's a good point. And I guess it's in the big tech's interests to
keep smaller companies under staffed.

------
pazimzadeh
It's interesting that Microsoft is barely mentioned here. Perhaps it's just
because they are not in the Bay area?

~~~
ucha
They are. Have a look at the last document.

------
peterwwillis
_" Additionally, there are no restrictions at any level for engineering
candidates."_

Basically their agreed upon policy says that they can hire any engineers they
want, but you better not hire one of our managers! What an indictment of the
higher value attributed to managers over engineers.

------
aalpbalkan
Here's an earlier story about this:
[http://www.theverge.com/2012/1/27/2753701/no-poach-
scandal-u...](http://www.theverge.com/2012/1/27/2753701/no-poach-scandal-
unredacted-steve-jobs-eric-schmidt-paul-otellini)

------
zpk
Don't be evil,...except when it comes to hiring & labor practices.

------
curiousquestion
Watch talk by Lawrence Lessig SCALE 12x:
[https://www.youtube.com/watch?v=D3O1MC1AqvM](https://www.youtube.com/watch?v=D3O1MC1AqvM)

------
pasbesoin
Employers "conspire" to hold down wages -- "bad".

Employees "conspire" to raise wages (unions) -- "bad".

Keep in mind the multiple dimensions upon which "privilege" acts -- including
those of perception.

In other words, you think people should be "free" as "individuals" to earn
whatever they are worth. Well, at its simplest, that is what you are going to
get. You are ALSO going to get employers to work against this. Welcome to
"libertarianism".

In other other words, I'm suggesting that we are all members of society, and
that our personal interests do not lie solely in our own, personal
remuneration.

------
walshemj
So how many Google share holders does it take to put a motion of "no
confidence in the board" on the order paper at the next Google AGM.

~~~
thrillgore
Given the amount of specializes stock that Larry and Sergey hold (over the
other shareholders, essentially giving them the reigns for the time being),
it's a futile effort.

~~~
walshemj
But makes the issue public and shows up the nature of the "dodgy" stock
classes.

And it woudl mean that the board woudl have to stand up and either defend what
they did or admit they are law breakers.

BTW the FTSE threw out a company with restrictive stock classes out of one of
its index's only last year - the Daily Mail trust.

------
higherpurpose
Maybe this will bring end-to-end encrypted e-mails to Gmail, so that when they
do discuss such things in the future, it's all encrypted properly?

One can hope.

~~~
fixermark
I'd have to check my US law, but I'm pretty sure that a major corporation
encrypting its internal emails and then trying to claim to a court that it
can't produce documents under warrant because they're encrypted doesn't let
the e-mail owners "win..." It gets them thrown in jail for contempt of court.

If you want some evidence to back that hypothesis: the e-mails you're talking
about right now are encrypted. They're encrypted inside Google's servers. But
it doesn't matter in the face of a court order. It's not like the Justice
Department accessed these files that are being reported on with wireshark.

------
doczoidberg
This is good news for every entrepeneur who is developer. Why? Because it
shows that you are worth more than companies pay for you!

------
lucb1e
I remember having heard news about companies not hiring from each other a few
years ago, I don't know for what exactly. I suppose to not try and steal each
other's knowledge by buying people. I'm not sure which companies it were back
then, but Apple and Google are very likely candidates. What changed? Why is
this news now?

------
mavdi
Well hello Sergey Brin.

------
bignoggins
a

------
benihana
Wait a second. These emails[1] (not the commentary around them) seem to say
that the big tech companies in the valley agree not to _recruit_ employees of
other companies. There's a big difference between recruit and hire. It seems
to me like they've all agreed it's pointless to just poach each other's
employees.

Eric Schmidt says the practices are zero sum. In my opinion this is exactly
correct. If all the big companies just move each other's employees around,
nobody benefits. If instead they all agree to look outside of the talent
that's already been recruited, everyone (including developers) benefits. New
talent keeps coming in, and developers not in big tech companies have a shot
at working at places their parents will recognize.

1\. [http://pando.com/2014/03/22/revealed-apple-and-googles-
wage-...](http://pando.com/2014/03/22/revealed-apple-and-googles-wage-fixing-
cartel-involved-dozens-more-companies-over-one-million-employees/)

~~~
michael_nielsen
"If all the big companies just move each other's employees around, nobody
benefits."

The companies may not benefit, but the developers certainly will! Not just the
ones being moved around, either --- it'll raise market prices, and so _every_
developer will benefit, even those who don't move.

~~~
fixermark
Honestly, an engineer who is unhappy with their salary can pretty much walk
down the street to the next company in the Valley. They don't need recruiters
calling them to remind them of that.

I think drawing a line from a handful of non-recruitment agreements to price
depression in the specific world of the software engineering industry requires
more than hand-wavy assertions based on generalized economic theory.

------
emcfarlane
This is the free market. People choose what they think they are worth. If you
don't think Google is paying you enough, quit. Deals with companies to avoid
poaching have a cost themselves. This doesn't need more government interaction
this needs people to value their work, to think.

~~~
andy_ppp
I'm not sure why this is being down voted... because it disagrees with your
view?

I don't agree with the statement but it does represent a possible solution -
all companies involved in this should have their employees go on strike!

People think this idea is ridiculous because they've been told it is over and
over and over again. Are unions really evil or are they ever more necessary to
balance out the insane profits companies are making?

Just some questions worth thinking about before you arbitrarily down-vote
someone...

~~~
emcfarlane
Thanks, just to clarify I'm against unions as they come with a large political
power which I think is undeserved.

My statement merely aims to say that I don't think there is anything currently
wrong. These companies make billions. They could easily afford to pay larger
salaries. Why should they if people will work for less? Why isn't everyone's
salary like Eric Schmidt?

~~~
fixermark
To expand a bit on the thought of unions in the Software industry...

Step 0 would be to convince software engineers that other software engineers
who don't perform up to the same level as them should be protected for the
good of the working-class engineer, instead of kicked to the curb to make room
for a more productive engineer.

A bit of a hard sell, as engineers tend to see themselves as co-owners of the
solutions they create and hate to see their work fail to launch because
they're saddled with bad coworkers.

------
mschuster91
I am wondering what happens when one mails directly to the mentioned
addresses.

Or, what 4chan/other trolls could potentially do with it.

Publicly disclosing internal matters for the courts is bad enough, but PII
like internal mail addresses should be redacted before release!

~~~
brey
I think it's reasonable to assume that the 'sergey@google.com' mailbox already
has something to filter out the crazy.

