Maybe somebody with a legal education that eclipses mine can chime in here, but isn't this whole exchange just mired in liability landmines? For starters, Jobs is trying to coerce a non-compete clause out of Colligan. To the best of my knowledge, that is just flat out illegal in California. Then we have the pretty much blatant threat of unrelated patent litigation if Palm chooses not to cooperate with the aforementioned hiring policy. Shouldn't that be regarded as extortion?
Would love to hear an expert opinion on why this exchange even took place in any traceable from. I imagine an Apple lawyer would see Jobs type this up and just burn the whole place to the ground...
Philip let me address the three legal issues you seemed curious about.
1. Non-compete clauses are not exactly "illegal" in California rather unenforceable. They are put into agreements typically as boiler plate "I agree for a period of 'x' I will not work for a company that competes with employer or start my own." So if you were hired in California and went to work for a competing company in California, it would be safe to say if there was a non-compete" clause in the original contract the courts would not enforce it. However, these are multi-national corporations so non-compete clauses can be enforceable in a lot of jurisdictions outside California.
2. As it relates to the idea that Apple was trying to sign an agreement with Palm not to hire each others employees, anti-compete is between the employer/employee not two competing companies, so the companies have the contractual right to enter into these agreements. *This may be a general rule, but your gut instinct is right on because there are a number of exceptions that would make agreements between competing companies illegal, for example if they had an effect of price fixing.
3. Apple's approach of "threatening lawsuit" for patent infringement is not tactful, but not extortion either. Laws on this point can be very strict, for example you cannot necessarily threaten lawsuit, but Apple is within its right to send cease and desist with formal demand when it feels its patents are being violated. Naturally, part of a demand is agreement to not pursue the lawsuit if the demand is met. It may sound like extortion, but do not forget Palm does not have to agree to the terms of the demand (Palm might not even be violating Apple patents) and Palm can always take its chances in court and even if they lost they could still hire Apple employees.
Thank you for your detailed reply Will. Quite astonishing what kind of professional behavior is ostensibly permissible. To the layman, Steve looks like a total crook.
Thanks I tried to provide an objective legal analysis. That said, I think you raise a very important point just b/c something is legally permissible does not make it moral behavior.
I'm curious about this bit: Apple is within its right to send cease and desist with formal demand when it feels its patents are being violated. Naturally, part of a demand is agreement to not pursue the lawsuit if the demand is met.
Typically, for patent disputes, the demand is to stop using the particular technology in question or to enter a licensing agreement, is that correct? So would it be legally OK to tack on another demand that is clearly not related to the patent infringement? Such as, mutual agreement not to poach employees. Or do the demands not have to be relevant to the patent at all?
As bizarre as it sounds the demand can be outside the scope of the patent infringement. You are right, that typically a cease and desist would be along the lines of: 1. you are violating our registered patent(s), 2. we demand you cease and desist and/or begin paying royalties and past royalties calculated to be "$x".
However, you can be very creative and tack on other demands unrelated to the patent infringement. One very important point here, regarding settlements and settlement offers, parties to a lawsuit are prohibited from disclosing settlement offers/settlement discussions to the Court (again like all things in law, this is the general rule and there are exceptions, example if someone violates a settlement agreement and you sue to enforce said agreement obviously you disclose the confidential agreement to the court).
Fizx, this article is right on point, I would like to read the actual settlement, but without doing that here is my opinion:
>The Department of Justice has reached a settlement with Adobe, Google, Intel, Intuit, Apple and Pixar that prevents the companies from entering "no-poach" agreements for each other's employees.
So I would still say the general rule is these types of "anti-poach employee agreements" are legal but the DOJ has carved out an exception as it relates to ONLY these six companies, where they cannot enter into said agreements with each other. However, as you notice Palm was not part of the DOJ settlement, so without reading the Settlement itself I would still suggest Apple has rights to enter into such an agreement with Palm or any company not one of the six.
Fixing price of labor would be more along the lines of Palm and Apple coming together and agreeing not to pay their employees greater than "$X". This way it would not matter what company Employee goes to work because his salary would be fixed across the industry. (There are always exceptions, for example if you practice law you have to be a member of the State Bar making Bars natural monopolies - and Bars also fix the industry prices by setting the fees lawyers can charge. Yet Bars do not violate the Sherman Act)
Courts will distinguish that type of labor cost fixing from Palm and Apple agreeing to not solicit one anthers employees, which will keep their labor cost down, but this is not the prohibited behavior contemplated by the Sherman Act.
Yes, as you might recall Google was just under investigation by the DOJ and FTC for the last 2 years for potential anti-trust violations(Google recently settled this matter). Generally Google was accused of using its search power to gain an edge of market rivals.
An example of the type of alleged behavior, say you were in the coupon business and you bought ads on Google it would have cost "x", but Google used its knowledge of search and saw coupons was big business so Google created Google Offers and began buying its own ads effectively driving up the cost of your ads to "1000x".
So maybe your right, can anyone say Anti-Trust Act is used at all if some companies can set aside $500 million to make anti-trust investigations disappear? (Google is publicly traded so the $500 million set aside to settle this investigation is public record with FTC).
I'm no lawyer, but I'm pretty sure what Jobs was suggesting was some form of collusion. I don't know that his threats could be held up as extortion, but collusion is a prosecutable offense. My question is, what might be the statute of limitations on something like this? Does it disappear with the passing of Jobs, or could Apple still be held responsible for this?
That's exactly what he's accused of doing, although it's an anti-trust case, not collusion. This e-mail came out as evidence in a lawsuit where former employees allege that major tech companies agreed not to cold call each others employees, to the detriment of those employees. A Department of Justice investigation into the practice was settled a few years ago with the companies agreeing to discontinue the practice.
Since it's the company that's liable, not Jobs personally, it doesn't matter that he isn't the CEO anymore.
I'm sure Apple could be held responsible. What I don't know is if attempting to collude to distort the market is illegal or just actually making such an agreement. As the answer was no are Apple technically in the clear?
>Would love to hear an expert opinion on why this exchange even took place in any traceable from.
Notice that the initial contact came from Steve via phone, and the Palm email is intentionally saying "no" in a traceable form since they are not doing anything wrong. A "yes" would probably have been by phone. Steve also doesn't say anything incriminating in his email response, just vague threats.
"Then the Palm CEO sent a traceable 'no', in the hope that the Apple CEO would be intimidated into silence. Instead Mr Jobs consults with his lawyers on wording and replies 'I am well aware I threatened you, and here is my threat in black and white'." from the book 'When Elephants Play Chicken' by J.R. Hartley.
"Jobs is trying to coerce a non-compete clause out of Colligan. To the best of my knowledge, that is just flat out illegal in California."
Non-compete clauses aren't enforceable, but I don't think agreeing to them, or requesting that you agree to them, is in violation of any State law. It certainly was the case that every severance agreement that I've ever signed had a non-compete clause - which I happily signed as I was aware it was completely unenforceable.
There's nothing appalling about this. Apple has every right to defend its patents, just as Palm has every right to attempt to poach Apple's employees. Jobs offered an agreement and Colligan declined, so Steve threatened to take alternative measures to discourage Palm from poaching its employees.
If Palm had agreed "we won't hire anyone coming from Apple", that would be illegal under antitrust law. If they had agreed not to actively recruit Apple employees, that might be OK but would still look sketchy.
Agreed on the former. I don't think the latter would be sketchy considering anti-soliciation is quite often enforceable throughout the USA. Just not in California, so you resort to other means (that, yes, might run afoul of antitrust, but that's what you do when you're competing...)
"Jon Rubinstein is an American computer scientist and electrical engineer who played an instrumental role in the development of the iPod. Jon Rubenstein left his position as senior vice president of Apple's iPod division on April 14, 2006. He became executive chairman of the board at Palm, Inc., after private equity firm Elevation Partners completed a significant investment in the handheld manufacturer in October 2007."
"Anderson previously served as executive vice president and Chief Financial Officer of Apple Inc. from March 1996 through June 2004.[1] He took over the duties of CEO after the ouster of CEO Gil Amelio and before the appointment of Steve Jobs as interim CEO.[2] His responsibilities at Apple included oversight of the companies controller, treasury, investor relations, tax, information systems, internal audit, facilities and human resources operations.[1] On June 8, 2004, Anderson was appointed to Apple's board of directors. On October 4, 2006 Anderson resigned from Apple's board following a three month investigation into Apple's stock option practices.[3]"
What strikes me most is the absolute single mindedness of Jobs, especially in contrast to Colligan's appeal to empathy. This is not acceptable to Apple. What a way to talk!
Colligan goes to great lengths to establish commonality, using rhetoric like "Like you, ...", "...as you said...", "We can both try...", "...big enough for both of us...". He invokes individual liberty, "this is America!", rationalising and depersonalising his stance.
For Steve though, there appears to be one thing only: stop doing what you're doing. He belittles then intimidates, in clipped dismissive sentences. All Ed's appeals to reason seem to mean less to him than the mud on his boot. Stop. Doing. What. You're. Doing.
This should be Exhibit A in the case for patent reform. Patents are no longer a protectant for The Little Inventor; they are weapons that big companies can stockpile and use them to bully competitors.
With the smartphone market as hot as it is, wouldn't you expect to see thousands of companies making them? This is why you don't.
Interesting responses so far on HN I must say. It's a good thing for some here that Microsoft was found guilty for their bullying tactics because it gives people an out when comparing Apple and Microsoft, when in reality, in terms of aggressiveness they actually are/were one and the same.
I wonder if Mr. Colligan actually felt that way and was that principled/articulate, or if he either knew it was illegal or ran it by his lawyers to take the high ground in a letter which they thought would likely become public/discoverable later.
The fact that he sent an email follow up to a phone conversations means that 1) he had already decided not to become part of the collusion and 2) he wanted to leave a paper trail which would be made public if the collusion was ever detected.
If they've had off the record phone communication about the subject, the decision to follow that up with an email is a calculated decision. If he had decided to participate in the recruitment embargo, it certainly would not have been acknowledged in an email for all the discovery reasons that make this a compelling PR piece.
On the flip side, Steve Jobs comes off as being completely ignorant that this is discoverable. I don't know why he'd include threats in an email like this.
> If he had decided to participate in the recruitment embargo, it certainly would not have been acknowledged in an email for all the discovery reasons that make this a compelling PR piece.
Not so sure. For the companies that did participate (Google, Adobe, Intel, Intuit, Lucasfilm), there seem to have ben plenty of written documents circulating, including "do not call lists" of competitor's employees that HR was not allowed to contact.
I work at a level way way below that of an executive and I get minor communications which prompt me to seek legal counsel (thank goodness we can afford it). I assure you that he ran this discussion by his lawyers before responding to Jobs, he would have been a complete fool had he not.
This entire document seems like it was crafted to make Colligan look virtuous, and maybe he was, but if so, it was because his lawyers told him that it would be to his benefit.
Note that this document references a phone call that happened first, this call was totally undocumented and points to the fact that both sides were feeling each other out to seek a benefit, when it was clear that Palm held the poor hand, they started crafting a defense.
Yeah, it is a good point. He switches the medium from phone to email and does mention possibility of the whole thing being illegal. I his response is in a way more agressive than Jobs and the superficial politeness is just that -- superficial.
One thing that's always somewhat of a surprise to me is that as genius as a marketer as he was, Steve Jobs wasn't terribly eloquent. It's something I first noticed when watching his Stanford speech years ago and continued to pick up on throughut his various keynote addresses and leaked emails like the one in the linked document. His sentence structure was typically one-dimensional and vocabulary simple, which is probably why he was such an effective salesman -- he was easy to understand.
Being a strong, effective leader usually conjures up images of people who are prolific writers and great orators, or Bill Clinton-type masters of persuasion, but Steve wasn't any of that.
Don't confuse complicated speech with eloquence. Simple words and sentences can be tremendously eloquent when used properly. Being easy to understand is, after all, the whole point.
I'm not sure what you think of when you say "eloquent". I watched the Standford speech and other talks of him and the thing that always struck me was how eloquent and persuasive he was.
Also, great orators do use a simple vocabulary. Bill Clinton is not necessarily the right example, because he's a politician and bullshiting people with fancy words and long speeches are part of the job description.
Clinton's persuasive genius was on display in the last Democratic National Convention where he made clear what Obama had achieved, and the tactics the Republicans were using to try to stop him, in very clear, simple language everyone could understand.
I think Clinton and Jobs are more alike than different, in that respect.
I never listened to that speech, but as I was saying, great orators wrap powerful messages in a simple and clear language. And anybody that tried delivering speeches to an audience this way knows how difficult it can be.
Eloquence in terms of mastery over the English language. Steve definitely was persuasive, but not because of expansive vocabulary, carefully crafted sentences or even logical arguments. His passion conveyed much more meaningful messages, and actually, it's likely that his simple and direct manner of speech helped those messages come through with clarity.
How can you tell that he didn't carefully craft simple and direct speech to convey his passion with clarity? It's tricky to pin down cause and effect, but since so many people understood his passion through his use of English, I'd be wary of saying he didn't have it mastered.
I think he meant `not fancy`. Fancy speech is not the same as effective speech; rather, I'd say effective speaking is very much in the realm of eloquence.
My take after reading the two emails, was how many words it took for Colligan express himself, compared to how succinctly Jobs was able to make his position understood. I find the latter approach more eloquent (disregarding how distasteful the actual content was).
The thing is, I read Colligan's response as polite (even not counting for content). If I was dealing with Steve Jobs and I received an email as terse as his reply, I would be disinclined to deal with him. This is probably just my personal sensibility, not being a cut-throat business guy.
Eloquence is overrated; what is very hard to do is clear, concise communication. Steve Jobs was a master of that, and also a master of persuasion--not a coincidence.
Colligan's email was typical business-speak; about twice as long as it needed to be and full of useless fluff.
It's much harder to write like Hemingway than George R. R. Martin. Most people have to revise and rewrite several times to get their word count down and deliver a focused, clear message.
The orators in ancient Greece and Rome had a taxonomy of oratorical styles, from plain to ornate, and recognized that you could be successful in any style, and that certain styles were better suited to certain contexts.
Others are saying that the purpose of oratory is to communicate, but I would say the purpose of oratory is to persuade. Cicero has some complicated sentence structure, but if you can follow it, it delights the mind and just gets your blood moving.
So perhaps what you're saying is that Jobs was more like Lysias than Antiphon.
"I'm sure you realize the asymmetry in the financial resources of our respective companies when you say: "We will both just end up paying a lot of lawyers a lot of money."
I had the opposite feeling. Jobs was direct, concise and wrote in an unmistakable way. Colligan was writing "for the record" and used a lot of empty flowery language.
I don't find this email exchange appalling at all. What's appalling is the naive idealistic reaction here, that reeks of blindness to how business is practiced at scale.
I've been involved in this sort of anti-poaching discussion at senior levels before. It happens all the time, in many industries - particularly in jurisdictions non-competes are enforceable. When an executive leaves one place and goes to another (say a CIO or VP), they bring people with them. Often in violation of non-solicitation and non-compete agreements, which are a pain in the ass for everyone to enforce. So you do what you can to Stop. The. Practice.
In the case of California, Jobs didnt have a direct legal avenue to stop this so he wanted to use other threats to stop a competitor. That seems normal. If it was not legal, then his lawyers did him no favors. Immoral? Not at all. It's business.
The reaction here reminds me of Slashdot circa 98, clucking over leaked Microsoft memos. The hacker/open source idealism here seems way stronger than that of entrepreneurs or business people. Makes sense I guess.
Perhaps people love early stage companies here because they can ignore the dirtier parts of business after you have a product/market fit... like, competition.
Competition is dirty and messy. It's not a kid gloves "lets out innovate each other!" like you're toddlers in a sandbox not allowed to hit each other. It's about marketing negatively (see Samsung's anti Apple ads), aggressive sales and pricing (see the Nexus 7 sold at cost), stopping poaching (Apple above), and removing supply lines by buying them up (Apple with displays and flash memory).
Sure, business isn't JUST those things. It also is innovation. Preferably lots of it. But people here are a rather naive if they think most companies aren't spending over 50% of their time on the former. Apple is actually unique for their size in how much time it spends innovating rather than, to paraphrase Ray Kroc, "sticking a live hose in your competitor's mouth".
When two giants agree not to hire each other's employees in a particular industry (mobile) and a particular location (Silicon Valley), they do serious damage to those employees' wages and career paths. They've also violated antitrust law. See this example from Google and Apple, for example, which shows communication less outrageous than Jobs' email to Palm. http://www.cbsnews.com/8301-18563_162-57367924/google-apple-...
Exactly - see my comment below on this. Indeed, the more technically advanced / niche / specific the industry, the more disastrous these sorts of handshake no-poach agreements have on the salary and employment prospects of those that work in the industry.
I don't disagree with your point. I view this as a conflict of interest between managers and labour.
In this particular case we are talking less about general poaching and more about the poaching activities of an individual (Rubie) soliciting others out of personal relationships. I can see why many jurisdictions actually enforce anti-soliciting agreements, because this practice is very damaging.
On the other hand, broad based poaching collusion hurts labour, who should be protected by Uncle Sam.
The point is that, such a conflict is natural, and I'm observing that the HN crowd in these threads seems to be surprisingly supportive of government intervention. Maybe the libertarians are avoiding Apple threads.
I prefer to think of myself as a pragmatist. In certain situations, the business environment should be trusted to pursue their self-motivated interests because they are also the interests of consumers and the citizenry. In these cases, the government should not meddle.
However, in other situations, the business self-motivated interests are contradictory to those interests of their customers, employees, and their citizen neighbors. In these cases, the government needs to make sure that these businesses don't run amok and totally ruin the environment, the economy, and the market as a whole.
Those who take one extreme (no government intervention in either scenario -- what you call Libertarians) are no more virtuous that take the other extreme (the government must be involved in all forms of business activity). I hope we see more pragmatists and less dogma(tists) on HN. From what I can see -- these HN conversations do look balanced on the whole.
> However, in other situations, the business self-motivated interests are contradictory to those interests of their customers, employees, and their citizen neighbors. In these cases, the government needs to make sure that these businesses don't run amok and totally ruin the environment, the economy, and the market as a whole.
I dont think that's how many on HN view it and also to the point:
The bargaining chips Jobs is using to promote these anti-competitive practices only exist because of government intervention. If the government is going to provide companies with an effective monopoly (patents), under the argument that it (allegedly) promotes innovation, then they should be held accountable for balancing those forces when they are abused (in this case, abusing workers). I dont think that's contradictory in a "Pro when it helps me, anti when it hurts me way". Take out the Patents, and the problem (arguably) goes away entirely.
I agree with your take, overall, thank you. Much more eloquently stated than my OP, but I had not seen the pro-owner view stated so I went a bit strong in my advocacy for that POV.
Though I'm not sure I agree that HNers are particularly consistent on when they want government intervention. It seems driven from self-interest (intervene when it helps me, go away when it helps me).
Labour doesn't need protecting by Uncle Sam if there are no laws preventing cross soliciting and fair market value for their services.
And speaking of government intervention, are patents not a form of that? In particular, a form of government intervention being used here to try to prevent competition for employees?
Would the libertarian position not be to abolish both patents and also enforcement of any kind of non-solicit provisions, thus promoting a completely free market for workers and companies?
I'm not a libertarian, but I would think that anti-solicitation and non-competes are contractual matters. If you contractually agree to them, that's not coersion.
In practice, every jurisdiction is different in terms of enforcing non-competes. It's all about government intervention to prevent collusion among business owners.
What "stopping poaching" really means is that you don't want to pay your valuable employees what they're really worth. If a competitor needs your employees and offers them more than you're paying them, you have one legal option: make a more appealing counteroffer. Of course this costs money, and the Apple chose the illegal option of colluding with a competitor rather than the more costly (but legal and appropriate) option of making the counter-offer. What 'stopping poaching' really means is robbing your employees of the fair value for their labor.
Except this wasn't about illegal collusion to stop all cross-company hiring. It was (at worst) a potential antitrust issue related to anti-solicitation.
What you're describing is a conflict of interest that exists at the heart of capitalism. Owners want to pay less, employees want to make more. I don't disagree with labour fighting for their interests. But I don't think this was particularly appalling or immoral from the owner's POV.
I really can't grasp how there's any nuance here. It's really straightforward.
"What you're describing is a conflict of interest that exists at the heart of capitalism. Owners want to pay less, employees want to make more."
Sure, and if workers conspired to illegally appropriate the profits from the company for themselves they'd go to prison. Plain and simple, rightfully so. Somehow if the company conspires to steal higher-paying job offers from their employees that's not particularly appalling or immoral to you? It's one step away from taking the money straight out of their wallets.
This was about about limiting active solicitation based on insider knowledge of who works there and your past relationships. This is a COMPLETELY LEGAL contract clause in most jurisdictions in the USA and Canada, just not enforceable in California.
So, instead, these companies had gentlemen's agreements, which I've seen in almost every industry everywhere across four countries. Note it wasn't just Apple and Palm - Adobe, Google, eBay, Intel, Intuit all were in on mutual verbal executive-level non-solicitation agreements.
Does that STEAL higher-paying job offers? Not at all. Employees were still free to apply to any publicly posted job offer at any company. This was about dissuading recruiters (and former executives!) from calling former colleagues to recruit them.
And no, none of this is appalling, immoral, in my opinion. It is debatably illegal under antitrust law, as the DOJ complaints in the past have stated. But antitrust law is rather controversial, (by far) not universally supported and is often enforced on purely political grounds. You'll recall Microsoft's (non) punishment after the last Republican administration was elected, for example.
Of course, the former employees trying to seek class action status have every right to argue that they lost wages as a result of these practices, which might hold water... mainly because it's California.
I don't understand this jaded perspective. If we accept "business reality" as a default baseline, the measure of acceptable standard just gets shifted that much further. It's important to denounce this behavior, if for no other reason than we as a community need to make our ethical compass clear.
>When an executive leaves one place and goes to another (say a CIO or VP), they bring people with them.
Well, see, you treat people like property that can be "brought with them" rather than have their own mind, and you endorse collusion to restrict people's ability to move around. You should not be appalled that people object to being treated like that. We don't like sociopaths very much.
Could be wrong but I think you've got his argument backwards; I think he's saying that by allowing a company (by law or coercion) to prevent an executive from 'poaching' employees, you're treating those employees like property, rather than rational beings.
I think he's arguing that people should be completely free of coercion to choose where they work.
The sociopath is one willing restrict to someone else's choice for his own gain, or one who is willing to condone such behavior. Yes, that's what many businessmen or people in power do. No, it does not mean we have to like them or let them be. Mosquitos bite people too, and it doesn't mean we should like them or avoid making it harder for them to act on their predatory instincts.
Condoning coercion is not what a sociopath is, nor is it necessarily indicative of sociopathic behaviour, by any psychological standard.
Coercion is a pretty normal human activity, throughout history. You can't get rid of it (not even the utopian libertarian society would). The coerced usually don't like it, but that's to be expected.
Mainly the question is how a society limits the power to coerce. In this case, I'm not against Uncle Sam stepping in to prevent collusion. I just don't see it as immoral. A conflict of interest, yes. But I see this specific incident more about anti-solicitation, which is a legal and enforceable contract clause in much of the USA. In California, you have to try harder. Hardly sociopathic.
Something illegal isn't necessarily immoral either (see Pot legislation).
Morality is a mix of individual belief, faith, and community norms. My point is that what people find immoral here is pretty specious and of a rather isolated community.
You will just have to accept that a great many people will not respect the dirty side business, and rightly so. I understand that you've done what you have to do, and that's fine, I'd do the same in your shoes.
But there is nothing about petty human infighting that deserves praise. It's a huge (and unavoidable) waste of time. In an ideal world, employee poaching would be prevented by providing a better working environment and compensation. We don't live in an ideal world, sadly.
I do accept a great many dont respect the dirty side of business. I just find it fascinating they do so on a board that is in part dedicated to entrepreneurship and building scalable businesses that will almost certainly conduct such practices once they have scaled.
Morality is a science, tasked with answering the question: what ought I do in order to live the longest, best life I can live, given the facts of reality?
A patent lawsuit is just a tool they had available. Patents as they stand have defects for the broader economy but I don't believe they are immoral. Though some do, highlighting another grey line between legality (encouraged by the government too!) and morality.
You're right on the one hand that an agreement not to poach each other's employees is not wage fixing per se. But I think you miss the implication -- if none of my employees are enabled to work at another major employer in the same industry, you can in effect compel them to stay employed with you, and thus not have to compete against other employers for increased salary.
Think of it this way -- if you were a high level management that had specific and highly valuable expertise in the Mobile industry, but you were unable to seek employment at any competing mobile employer, you would not have any leverage to negotiate your salary. Hence while this is primarily a non-solicit / non-poach in specifics, it has an effect of depressing wage competition.
On to the note on patents, I think if US Government policy makers were aware of the fact that patents are NOT being used to guarantee innovation and competiton, and instead are being used as blunt instruments to PREVENT innovation by depressing the movement of expertise from one firm to the other, and are being used as huge bags of IP with which to threaten litigation... for reasons totally unrelated to the IP on which they are based... then the whole structure of patents are called into question.
Think of it this way: if Palm was truly infringing on Apple patents and causing true impediments to their business (the real reason for patents, no?), then Apple would sue them. But if instead they're being used as negotiation pawns to leverage decisions that have nothing to do with the IP. This would imply that the patents are really only useful as extortion-type negotiation leverage and not as intellectual property.
Basically, the IP behind the patent is only useful in that if you have enough of it, you can threaten another firm to do what you want them to regardless of whether the IP is truly useful to the firm in the first place.
I guess it depends if you view this as a general case of anti trust non-poaching or a specific case one of Jobs' inner circle soliciting his former colleagues. In California it's allowed, but not everywhere. Jobs was trying to use what he had available to dissuade the practice.
Might be anti trust, might not. I don't think it was immoral or appalling to try, assuming Apple's lawyers weighed the risk.
Maybe you didn't mean it that way, but defining an action as immoral based on a risk evaluation from lawyers seems to miss the point of the word entirely.
the that's how "business is practiced" argument and "competition is dirty and messy" doesn't mean that's the way it has to be or that its the best way.
What's appalling is the fact that people in power are attempting to take power away from individual contributors who need these types of checks and balances; that is to be able to leave one company and join another for better working conditions/wage/purpose if the market is to work effectively.
Interestingly, his megalomaniacal tendencies actually produced things that others might not have been able to get done. In other words, it became a bit of self-fulfilling prophecy to live in his fantasy world where everyone should do exactly as he thought they should.
As someone making his living in various forms of IT, knowledge of this kind of thing is difficult for me. I find it so disgusting that it's very hard to stomach recommending technical solutions, or even investing in the equipment I need, when I know that it will aid in the prospering of these companies that will then use it for such ugly, immoral actions. The problem is you slowly learn of this kind of thing from every tech company and soon enough you're just disgusted with the whole IT career. Unless you are very lucky with your job options, you can't just retreat into some happy corner where you program in Lisp on Linux servers all day long. You have to get over it and put it at arms length or face the fact your career is going to be much less fruitful than it otherwise would be.
It's just an interesting little footnote in the history of Apple's rise to handheld superstardom.
Ed Colligan sounds very reasonable and level headed in his responses to Jobs' threats and intimidation approach.
However, Mr. Colligan basically led his company into insolvency, failing to innovate, failing to support his customers, failing to properly leverage the once-dominant Palm market share.
I was there in 2004, a happy user of the mighty Palm T3 which to this very day has some superior features versus the Android and iOS handhelds. My wife still misses her Zire.
I gritted my teeth and put up with Palm's steadfast refusal to support Linux; jpilot and pilot-sync filled in the gaps pretty well.
Then Palm decided to innovate by abandoning the PalmOS platform entirely and going with WebOS. Did they support Palm apps? Sure, as an extra cost add-on. Friends with Palm WebOS phones traded them in for Android as soon as they could; the units were buggy and crashy.
So in the long run, the support and innovation award has to go to Apple, and in my opinion it has less to do with employee poaching than with visionary and intelligent leadership.
Certainly you can't build a great company without great talent, but poaching from your competitors is only a small part of the story.
Then there's the stigma of being the poachee. Is it advisable to be known as someone who will jump ship and join the enemy for a few more pieces of silver? Is loyalty of so little value? In my opinion, there's great value in loyalty to one's company. If you must jump ship, at least spend a year elsewhere before joining the competition. It's a professional courtesy thing.
> Is it advisable to be known as someone who will jump ship and join the enemy for a few more pieces of silver? Is loyalty of so little value? In my opinion, there's great value in loyalty to one's company. If you must jump ship, at least spend a year elsewhere before joining the competition. It's a professional courtesy thing.
No. But what if say... you hate your boss? You disagree with the coding (for example) style imposed on you? What if more money is just a (small) part of the story? Its not as though Jobs is arguing "Hey, you can take my employees, as long as you don't pay them more ". There are many reasons to leave a job, and any good interviewer will ask you why if you are jumping ship.
> If you must jump ship, at least spend a year elsewhere before joining the competition. It's a professional courtesy thing.
IMHO, not a reasonable expectation. Going to a competitor, you are presumably taking your experience with you. By not going to one, you are presumably throwing it away - why is that a good thing (for innovation or personal success)?
It would be great if we all worked for companies that really cared about us. Those companies are few and far between, and my guess is they don't fear employee attrition as much as the bad employers. Or, perhaps that fear of attrition is why they are good to their employees at all. Either way, I don't think the issue is nearly as simplistic as you're making it out to be.
Why the current meme for examining Steve's entrails? Is anyone surprised at this exchange? One of Steve's lifelong obsessions was a wildly distorted idea of employee poaching. As someone who worked at two different companies that received these kinds of communications from Steve, I can say that he usually only struck out at companies he knew well, like Palm. Ed probably doesn't know it, but Steve actually threatened Palm in much the same way years earlier. He did the same sputtering act about prceived poaching with Motorola around 2005, which took some stones, since at the same time he and his guys were busy playing MOT like a pinball machine to teach them how to make phones and how to do business with AT&T. But that's another story. In both these instances, lawyers were dutifully involved, but the execs involved mostly just laughed it off. Steve being Steve.
He was great at portraying the public image of an ambitious hippy and a visionary who seeked innovation. But in reality he was a bad tempered and egotistical attention seeker with a narrow mind and thus had to do everything his own way.
None of his innovations were invented by him. Not even in the early days (Wozniak deserves the real praise there). His hippy attitudes only extended as far as was convenient for him (he claimed that money was never a motive, yet he was one of the most ruthless CEOs who added the highest mark ups on their products than any other company in the technology sector). He didn't even extend his hippy attitudes to his own work force as he was a complete bastard to anyone who wasn't working themselves to death. And then there's the way he treated his own family - absolutely disgraceful.
What Jobs had going for him was his ability to switch on his charisma when he needed to. This is what lead him to recruiting some of the brightest minds; this is what helped inspire them to create the products they did; and this is what helped convince the millions of devoted followers that Apple were anything more than just another 'megacorp'.
I think you're right that I'm being unbalanced. I just get so sick of reading about people crediting him personally for all the great technological breakthroughs that I was probably over compensating with the aforementioned rant.
I see this as exploitation or price fixing in some way!
Let me elaborate. Lets say Steve Jobs was paying an Engineer $100K at Apple. That skill set might have been worth atleast $120K to Palm. So Palm decides to hire him giving him a decent raise to join ( a good incentive to join). Lets say Palm gives him $120K. Now Apple which secretly knows that the engineer is worth a lot more to Apple will have to throw in more than Palm, say they will have to offer 150K$ to draw him back. Palm might again counter offer and this kind of bidding might go on until the Engineer get his true value(In a way market is deciding the engineer's worth) - But what is happening here is that Steve Jobs is kind of colluding with Palm to "fix the price" of the Engineer without market deciding so! There by saving/making a boatload of cash (money saved is money earned)!
Sure, what I am saying is probably not the book definition of price fixing, but I would think that the motive/sentiment is very similar!
I disagree. Poaching is frowned upon in every industry. That said, it is likely the Palm CEO wasn't aware that the 3 employees they hired were poached. He probably thought they came on their own. Which just goes on to show how out of touch with reality he must have been (ironically, since it was Jobs who was known for his Reality Distortion Field). I mean, who in their right mind would leave Apple and join Palm, of all places?
There is nothing wrong with poaching (and it is certainly not illegal). It is frowned upon the same way as "talking about your salary" is frowned upon, and usually for the same reason: it leads to increased leverage for employees. By creating fictitious mores around these two activities, employees have less of an understanding of how well or badly they are being treated (less insight into the market for their talents). If you are making twice as much as me because I am a better negotiator, you may continue without a fuss for years if you never find out. Creating a culture about not talking about your salary is thus highly valuable to an employer. Similarly, if I am a good employee and too distracted by working, I may never realize that the going salary for a company is now X times what I make. Another company contacting me may make me aware of this, and thus it is equally beneficial to attach false stigma to this practice. There is (or was at some point) a similar amount of stigma about being disloyal to your employer (thankfully this has more or less disappeared).
If it is so absurd that someone would leave Apple for Palm, then why did they care and threaten so much?
>>There is nothing wrong with poaching (and it is certainly not illegal).
I've always found it unethical. It's similar to going to a girl who has a boyfriend and saying "hey baby, I know you're dating Mike, but I would be such a better boyfriend for you..." Whether or not you would actually be a better boyfriend, or whether it is good for the girl, is quite besides the point.
This line of reasoning requires the belief that a company has some special claim to you, which I find pretty distasteful. The company doesn't own you, you are not an indentured servant. You didn't sign a contract saying you'd work there for life. And more importantly, they will certainly fire you as soon as they need to. This is in no way analogous to a committed marital relationship, where the entire idea is lifetime exclusivity, or dating when you are theoretically working towards that.
>>This line of reasoning requires the belief that a company has some special claim to you, which I find pretty distasteful. The company doesn't own you, you are not an indentured servant.
Neither does your girlfriend. You are not an indentured servant to her. But the fact that you are dating her means that there is mutual trust on both sides, similar to that in an employee-employer arrangement. Poaching undermines that trust.
edit: not sure why I'm getting downvoted. "Don't downvote simply because you disagree" was an unspoken rule, I thought? If you have a disagreement, voice it.
The employer-employee relationship is a contractual agreement regarding the exchange of money for labor. Are you going to argue that that is similar to dating? Hopefully not. The day I have to pay my girlfriend to be with me is the day I won't be offended if someone tries to "steal" her away.
Employer-employee relationships are asymmetrical and purely business oriented. There is no "trust" on their side, I can guarantee you that - that is why they have you sign NDA's when you work on secret things (I have yet to find a company that just trusts you to keep it all secret). That is why it is so beneficial for them to rely on you believing in precisely these sorts of analogies: they have lawyers and contracts on their side, you are left with believing in "loyalty" and "trust".
The fact that you equate contractual work between a corporation and a person to a loving relationship between two equals is quite demonstrative of my original point.
>>The employer-employee relationship is a contractual agreement regarding the exchange of money for labor. Are you going to argue that that is similar to dating? Hopefully not. The day I have to pay my girlfriend to be with me is the day I won't be offended if someone tries to "steal" her away.
You don't have to pay your girlfriend to be with you, since presumably she also gets various benefits from dating you. Whether the transaction happens via money or some other medium such as care and attention is quite irrelevant.
I find it unbelievable that you are claiming there is no trust in employer-employee relationships. On the contrary, if you examine the basis of such relationships you'll find that the employer is giving you a job in the first place because they trust that you will be able to do it, and you are taking the job in the first place because you trust them that they won't screw you over.
Also, to address some other things you said previously:
>>You didn't sign a contract saying you'd work there for life.
I also didn't sign a contract I would date my girlfriend indefinitely. Note that I said girlfriend, not wife.
>>And more importantly, they will certainly fire you as soon as they need to.
Same thing with relationships: one person will break up with or divorce the other as soon as they feel like they aren't getting what they want or need out of the relationship.
>>This is in no way analogous to a committed marital relationship, where the entire idea is lifetime exclusivity, or dating when you are theoretically working towards that.
Again, I never said marriage. I said trying to poach a girl who is in a relationship (not marriage) is unethical, just like trying to poach another company's employee. If said employee comes seeking you out, then fine. But actively recruiting them because they work for Company X is huge bullshit, and I am saddened that so many intelligent people here try to justify it by claiming it is somehow good for the employee.
Its really weird that you decided to address my last comment more than my current comment, but whatever:
1. I brought up marriage (again, in my last comment), only to tie it to dating as an often expected outcome. In other words "these things apply to marriage, and since dating is usually used as a vehicle towards marriage, they thus apply to some degree to dating".
2. The reason dating is different is because there is an actual expectation of love, exclusivity, and longevity. There is absolutely no contract involved, thus these become the primary axis of the relationship. For example, note that if it is explicitly an open relationship, then the particular expectation of exclusivity disappears, in which case these actions would be legitimately considered "less scummy". With employment, there is a contract, and the other factors that you believe are influential to the relationship exist solely in your mind, and I will re-iterate, are in no way reciprocated by your employer. You will receive a bad surprise someday when you find out that the employer has no such notions of loyalty to you.
Finally, I am now really curious about your mindset. You seem incredibly insistent that employer-employee relationships are A LOT like dating. You believe that another company trying to hire you is like someone trying to steal a girlfriend. It only follows that you looking for other employment would be analogous to going on OKCupid behind her back? Is this how you feel as well? Do you think that employees should only try to find jobs after officially quitting and thus suffer possible windows of unemployment? Or is that the arbitrary point where the analogy ends in your mind?
"You will receive a bad surprise someday when you find out that the employer has no such notions of loyalty to you."
This is a very important point. I've seen lots of people who have worked for years at a company laid off with no notice. One day they come into work and hear: "Pack your personal stuff in this box, hand over your company ID, and your manager will escort you out of the building."
The power differential is everything. By not addressing this in your comments, your opinion comes off as very light-weight and people are probably reacting to that.
Two relationship partners have roughly equal power, or failing that at least not a 100x or more disparity. This makes it a terrible analogy. The whole point of labour laws is to address this disparity.
>Poaching is frowned upon in every industry by the companies who want to exploit people without worrying about competition.
FTFY. Labor is a market exactly like any other. If I buy Chevrolet for years and then suddenly switch to Ford because they offer a better deal was I "poached"? Such a nonsensical concept.
If you don't want people "poaching" your talent, pay them better. If you can't afford to then that's just the market efficiently allocating resources.
Talk to any senior manager and you will see their attitude manifest. The problem really is we are still largely ingrained in the feudal mindset. Employment is treated as a favor done by the company to the employee, and by that virtue employee is bound to life long slavery to the company. Hike, promotions are all treated as gracious favors from the company to the employee.
I agree, except for this: imagine Company X will pay twice as much for engineers who currently work for a competitor, specifically because they want to get the competitor's knowledge.
The competitor can try non-complete clauses, but those may not hold up legally. They can threaten to sue former employees who betray secrets, but it's pretty hard not to use or at least be inspired by what you've learned in a past job.
I don't see a good solution to this, but I can see why one would be upset by such "poaching."
That said, "do what we want or we'll sue you for patent infringement" is an inexcusable tactic.
>specifically because they want to get the competitor's knowledge.
This is covered by NDAs and if you can prove these were violated you can get something done about it. I've seen this happen.
>The competitor can try non-complete clauses, but those may not hold up legally.
I should certainly hope they wouldn't be held up legally. It's bullshit. The worker has a chance to make twice as much money. They shouldn't get blocked because some company thinks we're still in slavery times.
If it really matters so much to the company, they could just pay those workers double themselves (since, by definition, that's the market rate of those workers now). Moving is always a bit of a pain so if they're not already very unhappy they might even take less than double just to not have to move.
>They can threaten to sue former employees who betray secrets
If they can prove the NDA was violated they will sue and they will win.
>but it's pretty hard not to use or at least be inspired by what you've learned in a past job.
What you learn on the job is yours. This is known and completely accepted. If this were not the case then a Senior programmer would make the same money as a fresh-out-of-college Junior programmer.
You may find this extreme but some of us believe a programmer should get some kind of residuals for anything they write for a company the way authors/musicians/movie stars/sports players do for their work.
>>FTFY. Labor is a market exactly like any other. If I buy Chevrolet for years and then suddenly switch to Ford because they offer a better deal was I "poached"? Such a nonsensical concept.
It's more like Ford figures out who owns a Chevrolet, and contacts them saying "psst, don't you hate your Chevy? Why don't you buy a Ford instead, we're so much better!" I don't know about you, but I find that sort of thing very creepy and unethical.
Why is your target market "people who already have cars" and not "people who don't have cars and have a much higher likelihood of being on the lookout for one"?
Because car owners tend to replace their cars regularly. People who don't own cars often don't own them because they don't need them, don't want them, or can't afford them.
But this is a derail. The point remains, 'poaching' is a misnomer. It's offering competitive wages and communicating your desire to buy skilled labor at a higher rate than your competitors. It's a virtuous thing to do all around, and it's criminal to conspire against the workforce in order to profit at their expense.
no, it's not. there is not an unlimited supply of good and experiences people on the market. if you wan't to succeed you have to get them, somehow. it's competing for ressources, it's a good thing. it's frowned upon only if somebody good is "poached away", but not if you convince somebody from the competition to work for you.
> who in their right mind would leave Apple and join Palm, of all places?
If I'm remembering right, Palm basically had a standing offer to double the salary of anyone who worked on the iPhone at that point in time. That looked pretty attractive to some people.
Apple aren't exactly renowned for giving people a say in development, save a few royal elite. If your an untouchable at Apple, but are offered a good role at Palm, why not take it?
It's the old sentiment of would you rather live in a decrepid shack on a fancy road, or a grand house on a normal one.
You can be great at eating dirt, doesn't mean you should do it.
Especially with the 'financial resources' comment, he was being politely reassured that the recruitment is purely in Palm's technology interests, and Jobs comes back with a 'we're doing better than you' remark.
How some people think he's a saint (or for some a deity in his own right) is truly beyond me.
The point wasn't really "we're doing better than you" but rather that Apple could easily afford to throw away a lot of money so that Steve could get his way.
The difference in writing styles and the impact thereof. This really stood out to me.
The Palm CEO seems to really be on the defensive the whole time, even while countering the patent threat. Jobs, on the other hand, was short and deliberate.
Yea, the Palm letter clearly had been reviewed by someone in his corporate counsel. They probably coached him on what points to hit on that might look good to a judge one day.
This is surreal. Even though Steve Jobs is an inspiration for me, I actually agree a lot with Ed Colligan here.
A couple thoughts:
- It's definitely possible for both companies to have awesome teams. No one person is going to make or break either team.
- Employees should have a right to work where they want to. Part of this means that if I am a skilled employee, I'll get offers to come work for other companies. If I engage in a conversation, then it's perfectly alright for the company to actively recruit me. On the flip side, if I decline, they should back off. But, at the end of the day, it should be my choice. Both the company and employee need to win (which might be hard at times).
- Part of living in a free, capitalist, democratic society is the beauty that if an employee tries to leave, you can try to persuade them otherwise. This can be done in a variety of ways, but it comes down to taking the more appealing offer (that doesn't just have to be pay and title, but can also be the values of the company or the employee's lust for working at a particular company or their freedom to have a little less bureaucracy and instead experiment with new ideas, etc. etc.)
- I love the jab at the end, where Ed claims that Palm is not interested in getting or using confidential Apple information and also informs their employees of their duties to their previous employers
I think before people jump on the bandwagon they should think about Jobs state of mind when he wrote this.
iPhone just launched and still vulnerable. Senior staff going to a competitor and also Personally poaching staff and being involved in the interviews etc.
Let alone Jobs health issues etc.
Im not saying that Jobs was right, but we have the benefit of hindsight to see that the iPhone worksed, there was no guarantee of that happening.
I'll bite. Whatever's Steve Jobs' state of mind was, it was still wrong.
What if you were looking to change jobs or would have jumped jobs given the offer proposed. Is it right to limit your recruitment because Steve Jobs was sick or worried about a project? What if the project wasn't the iPhone, but the Apple Newton? What if the destination company wasn't Palm, but Google?
The circumstances surrounding the situation don't absolve Steve Jobs of what he tried to do.
A lot of companies were in on this pact, and I think they should all be punished.
Steve was pretty consistent on this issue, he talked google and many other companies on this. This is what makes him "bad". He did it willfully and repeatedly.
I think what really irks me about the whole case is, that it's a free market for competition, but it's more free for corporations than employees.
I rarely jump into HN comments any more. There's little more than snide in them these days. For what it's worth, I think yours is the only original comment in here thus far.
This sentement has come up semi-frequently in the past (almost) four years I've been a member of the site, and I lurked for months prior to creating an account. From my perspective, the site has trended towards mass appeal, but not at a very quick pace. The articles on the front page today aren't all that different from the ones I remember being on there four years ago. The level of discourse ebs and flows. Sometimes it's really good; other times it isn't.
None of these things seem to be working very well. They may alleviate a portion of the pain temporarily, but the baseline level of quality throughout the community still feels way off to me compared to what I see in the old threads.
As a sidenote, I like the explanations in this post about why digg, reddit, and slashdot went sour:
At any stage CEOs / founders throw their weight around in a mosh pit of entrepreneurialism. If someone they bounce into falls over or steps back, they know they are onto a winner and push harder. Get thrown back and they bounce randomly in another direction.
This sort of threat is common - it is useless to imagine it might be a potential partnership, there is no gain in it for Apple, it is just pushing in a mosh pit - push back then concentrate on making great products - the only thing that counts in the pit.
He's asking for his competitors to stop offering his employees more money than he's paying them. He has all the money he needs to make counteroffers and keep his employees in the fold, but he wants to deny them their fair market value so he can keep that money. It's exploitation of the people who are building his business and it's essentially stealing from them.
I, Ed Colligan (ex Palm CEO), swear to god this happened:
steve: let's not hire each other's employees anymore, m-kay?
ed: thanks steve, but no thanks.
jobs: have you seen our patents and pile of cash, ed?
you're entering a world of pain.
5 year olds are direct because they don't know how to sugar coat and spin things yet. It's not exactly a bad quality in adults. I'd rather someone just be direct with me than writing 8 paragraphs just hinting at something and hedging their bets carefully choosing every word to maximize their wiggle room. I'm at the point where I will respond to that type of e-mail with a very short "tell me exactly what you want from me" type of response. I won't exchange a dozen e-mails trying to drag the reality of a situation out of someone anymore.
Companies, or even countries, are remarkably childish when they have disagreements. Just read a bit of history and see how incredibly petty, uncompromising and unreasonable a lot of the diplomacy between countries in the WWI/WWII era was.
I think this is very interesting, but I don't have any good suggestion why this happens.
This is one of the cases where it is hard as hell to infer what tone Steve Jobs wanted to reply back with.
It sure sounds assholish but it is very well possible he knew that Palm was actively poaching and blatantly disregarding existing NDAs. Palm's CEO writes a fairly well measured e-mail but it is still a political dance.
>very well possible he knew that Palm was actively poaching
Which isn't illegal, immoral or wrong in any way.
>and blatantly disregarding existing NDAs
Do you mean NDA here or non-compete clauses? NDAs should certainly be adhered to but non-compete clauses should be illegal and certainly never enforced.
The tone doesn't matter.
Context is of course of importance but let's face it, even if with a good lawyer you can defend almost anything. Steve Job's attitude is clearly set on death and destruction to his enemies lol.
I'd have to give it up for Steve - ruthless and firm! No doubt Apple has done so well. Love the guy! Especially loved the part where he says "asymmetry ... " and "you guys felt otherwise - patents" ... Haha! love the Jobs style!
Employees are mercenaries anyway - I think Steve did the right thing as the founder.
Maybe somebody with a legal education that eclipses mine can chime in here, but isn't this whole exchange just mired in liability landmines? For starters, Jobs is trying to coerce a non-compete clause out of Colligan. To the best of my knowledge, that is just flat out illegal in California. Then we have the pretty much blatant threat of unrelated patent litigation if Palm chooses not to cooperate with the aforementioned hiring policy. Shouldn't that be regarded as extortion?
Would love to hear an expert opinion on why this exchange even took place in any traceable from. I imagine an Apple lawyer would see Jobs type this up and just burn the whole place to the ground...