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Emails From Schmidt And Sergey Brin Show Agreements Not To Hire Apple Workers (businessinsider.com)
581 points by sgy 1193 days ago | hide | past | web | 321 comments | favorite



> 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.


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

How does someone this stupid rise to such a high position of wealth and influence? Are we talking luck here, or are Faustian bargains involved? Where do I get some of that action?

I'm only being half-facetious; this is weapons grade stupid. "Let's take this conversation offline because we'll get sued or indicted if it gets out." Yeah, that will totally work in a grand jury room.

If low IQ isn't the explanation, and I don't see how it could be -- given the respect and reputation we all accord Eric Schmidt for his other achievements -- what is? Drugs? Mental illness? Distraction? Forgery? Did he fail a saving throw versus reality distortion on one of his walks on the beach with Jobs? What?


I like "weapons grade stupid" as an adjective but I would not use it with regard to Eric. Eric is actually quite smart and also quite politically savvy. The other folks in this equation made a few missteps.

You can be sued over lots of things, whether or not they have merit, and keeping things verbal is one of the "standard" techniques of defending against that. In this case, were this the only document in the pile, Eric would be in a position to either not recall the conversation he had with Omid, or deny its content. Further he would argue that it is a general state of mind for a CEO that they don't want to create paper trails over anything that could be construed by a litigious opponent as evidence if misdeeds.

The problem in this case is that there is a bunch of other circumstantial evidence that makes it pretty clear that everyone on Google's EMG was on the same page with respect to this particular policy. I note however that Google has yet to settle in the class action, so they may still believe they can defend their position.

That said, the "valley" has always been a really small place with regard to hiring. If you work here for any length of time a tapestry of opinions about you will be formed and those opinions will affect to a larger or smaller degree who offers you work and who doesn't. Is that legal? I don't know. There are folks I have decided to never work with again, and people for whom I would change jobs in a heartbeat. Is my private 'blacklist' and 'whitelist' of good and bad co-workers legal? As a generic engineer? What about now that I'm a VP and perhaps these folks are trying to get a job at my company? Do you know how many people are sued each year because someone suspects (or knows) that they told a potential employer that they personally wouldn't hire them? My point is that people and employment and fuzzy criteria is a fertile ground for lawsuits, so paper trails are always bad.


>> keeping things verbal is one of the "standard" techniques of defending against that

That's all fine and dandy, but what is 'weapons grade stupid' is to not only have the conversation in email, but then to use a key word like 'paper trail' to lead any investigation straight to his conversation. And in that exact email, say WHY he wants it done in-person. I mean, 'paper trail' has to be up there with 'take this offline' and 'this is sooo illegal' for phrases that serve up incriminating evidence on a silver platter to the DOJ.

A non-WGS response would have been, "Come up to my office: we'll discuss further."


Indeed. My wife works for a legal discovery company, and this is exactly the sort of thing that plaintiff's attorneys hope to discover when they requests vast troves of corporate documents.


The reference to "sued" leads the conversation astray. Substitute "prosecuted" for "sued" to see the full spectrum of ignorance here. Conspiring with a competitor to fix costs may be deemed a "contract in restraint of trade" under the Sherman Act. The CEO of a company should know this at some fundamental level, under the category of "things that could send me to jail". Yes, most anti-trust violations are settled with fines and only companies are fined, but violations are a felony and can result in individual fines of up to $1 million (written back when this was a lot of money) and, more significantly for Eric Schmidt, in jail terms of up to 10 years.


Well in this particular case Google and the rest have already been prosecuted and fined for the criminal misconduct. The criminal case was settled in 2010, this particular story is really about the on-going civil litigation where Google is named as a defendant in a class action suit. Some of the defendants have already settled.


> That said, the "valley" has always been a really small place with regard to hiring. If you work here for any length of time a tapestry of opinions about you will be formed and those opinions will affect to a larger or smaller degree who offers you work and who doesn't.

Reminds me of another industry-centered town in that part of the country. How do people feel about Silicon Valley becoming the next Hollywood?


Its always been like that, there is a joke that you stop a random person on the street in LA and ask them how their screen play is coming, they will look at you suspiciously and ask "How did you know I was working on a screen play?" and similarly if you ask the random person in the Bay Area how their business plan is coming, they will respond identically.


I'm nowhere near his stature but I would absolutely never write anything like that in a corporate email. It's, as parent said, "weapons grade stupid." I don't know how the Chairman of Google cannot understand that everything he writes in email can and will be used against him following discovery in one of the thousands of lawsuits they are facing at any given time.


No, "weapons grade stupid" is very appropriate in describing Schmidt's email.

I have friends who testified for Microsoft in the DOJ trial in the nineties. Schmidt testified for the DOJ and was well-aware of what happens with corporate email.

He might be smart, but he did a very stupid thing. Whether it amounts to a slip-up or hubris, time will tell.


Personally, I don't like anti discrimination laws for similar reasons.


Being a really smart person doesn't mean being smart in all respects. There are plenty of cases where someone highly-accomplished has turned out to be a complete idiot in something that's not their area of expertise. Think of William Shockley and eugenics, Henry Ford and fascism, Orson Scott Card and homosexuality, Steve Jobs and not being a dick, or Freeman Dyson and global warming.


Einstein and economics comes to mind as well. People need to stop turning off logic and criticism of people tagged as "smart". It relieves cognitive burden, but at a considerable cost.


Aw... Eric Schmidt. I suspect Larry and Sergey would have done a couple times better had VCs not shoved a CEO down their throats. Controlling for company trajectory vector at the time they joined, Eric Schmidt is in the ballpark of John Scully.

I never had a feeling that he's a smart guy watching him talk (in contrast with Larry and Sergey and Zuck) and I generally despise his attention-whore attitude and kissing ass in political circles.

And everyone knows not to use lex.


> Aw... Eric Schmidt. I suspect Larry and Sergey would have done a couple times better

A couple of times better than what? Being multi billionaires and leading one of the most powerful and most respected companies in the world?

Most experts agree that picking Erick Schmidt as CEO was instrumental to Google's success.


Um, it says right there in the headline that Sergey was complicit in this too.


Read the article in more detail.


Not who you replied to, but:

Brin seemed pretty complicit in it. He didn't make the final decision to appease Jobs, but he asked for a temporary stay in recruiting Apple employees and obviously agreed with Schmidt's decision to ban all recruiting.


Um, perhaps you should? The article makes no inference that Schmidt had a bigger role. In fact, the article mentions Brin more often than Schmidt.


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

I actually started another thread discussing this exact topic: https://news.ycombinator.com/item?id=7455116


I don't see your point. Ok, so Jobs talked to Schmidt before talking to Brin. Either way, Brin continued the practice and actively promoted it.


Eric has a BS in CS from Princeton, and MS + PhD in CS from Berkeley. Seems like he has an inner geek, and I would argue that he did a good job at Google.


Uh, it's called a mistake. Smart people make them too.


Do you remember what he said to justify Google's privacy policies?

"If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."

The irony must be pretty painful.


He didn't say that to "justify Google's privacy policies". He said it specifically in response to a question on whether you can trust Google in the face of government investigation.

> "People are treating Google like their most trusted friend. Should they be?"

> "I think judgment matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. But if you really need that kind of privacy, the reality is that search engines, including Google, do retain this information for some time. And it’s important, for example, that we are all subject in the United States to the Patriot Act. It is possible that information could be made available to the authorities."

Which, in light of the the legal lengths the federal government will go to get their hands on every bit of data--let alone the illegal lengths they'll go--is a pretty important warning.

But we didn't talk about that, because the internet and the media operates on sound bites. It mattered what Eric Schmidt may or may not have approved of (that statement literally takes no position either way), not the important point he made immediately afterwards. Not a lot of PGP and OTR discussions on the internet that day, just knee-jerk "oh the irony!" contentless posts.


You're right, this was before the new Google privacy policies. But he did say that phrase in order to downplay Google's own responsibility in retaining search information. More importantly, propagating the idea that you should only care about privacy when it comes to things "that you don't want anyone to know" is irresponsible, and it's worrying that it comes from the single biggest handler of personal information in the world. Bruce Schneier said that a lot better than myself: https://www.schneier.com/blog/archives/2009/12/my_reaction_t...

About the new privacy policies, here's another interesting part from that same interview, which to my knowledge hasn't been transcribed anywhere:

But Eric Schmidt says protecting user privacy is Google's top priority.

- Where does all my search info go?

- Well first place our privacy policies are fully disclosed on our website and it's all written down very carefully. The most important thing we do is that after 18 months, the search information that you entered is so-called anonymized, it's literally gotten rid of and we can't go back and track it back to you.

Two years later Google would overhaul the privacy policy and get rid of most safeguards, including that "most important thing". Today, Google could retain your search data for any length of time or use it in unrelated products for any purpose they wish. So much for privacy being "Google's top priority"...

(To be clear, I'm not blaming Eric Schmidt since he was no longer CEO. I just want to highlight the striking fact that his whole defence would fall apart.)


The question itself wasn't about government investigation, Schmidt himself added that. If the context around the question was about that, you should include it.


The documentary explains the issues of government investigation right before that, but it's impossible to say whether it was an editing decision made after Schmidt chose to mention the government or whether the interviewer specifically asked about that.


Haha, yes that quote is hilariously fitting.


> > 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 > How does someone this stupid rise to such a high position of wealth and influence?

What is stupid exactly?

Saying "We should discuss this verbally so we don't risk to get sued" is not illegal. It's not even acknowledging doing something illegal. You could even argue in court that you are explicitly taking an action to not do something illegal.


You could even argue in court that you are explicitly taking an action to not do something illegal.

You could argue that, but you'd have to be pretty deluded to think anyone would believe you.


> You could argue that, but you'd have to be pretty deluded to think anyone would believe you.

It doesn't matter, courts need to prove you're guilty. My point was that this sentence in an email doesn't get the prosecution any closer to that goal.


It doesn't matter, courts need to prove you're guilty.

True, but you don't have to be quite so helpful.


It's stupid to put that request in writing.


> what is?

Maybe the fact that so few executives ever receive any negative feedback (jail, fines, firing, etc).


Eric Schmidt is considered one of the genuine genius of his generation.

I think you thought to much into that line.


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).


> 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.


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).


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.


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.


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


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


There are a lot of people like you even in the US. Cost of living in California is part of the issue. Tech companies could find the talent for less pay if their workforce was located outside the most expensive areas.


Wall Street pays much more. Anyone looking for the most lucrative sector to cash in mathematical talent would pick finance if choosing purely based on salary.


100k is a lower salary (adjusted for inflation) than high school dropouts were making in the dot-com boom doing things like server administration for companies like Go/Disney.


That's not the point, though you're right. The point is that $100k is still a lot of money when the median is ?$47k. What are all these people doing instead of accepting a measly $100k to be software engineers? I don't think 4100k jobs are so easily available in the US that people are just turning up their noses at it, but that there may be other reasons (like lack of appropriate skills) for the lack of supply. Of course more people will try to enter the profession if salaries are allowed to rise to a market equilibrium, but SW engineering skills aren't a simple commodity that people will just automatically acquire in accordance with the laws of perfect competition.


Too bad that bubble popped.


TheCoelacanth is looking at the market over the short and medium term, which is the correct way to look at it if we're arguing over whether there is a shortage today.

Furthermore, it's not like quantity supplied is perfectly responsive to price. It takes time for new people to enter the industry.

Talking about the long-term is rather pointless because technically, from a theoretical standpoint, everything is supposed to equilibriate over the long term. All shortages self-correct over the long term. Again, this is theoretical.


As the saying goes : In theory, theory amd practice are the same.


You don't seem to understand-- most people simply don't have the ability to think about things in a way that is STEM friendly.

It's not an option for them to re-train, they don't work that way.


You should probably cite something to avoid getting downvoted.

e.g: http://www.bricklin.com/wontprogram.htm


I don't think that explanation quite works. There are two cases:

1. Companies in the Google/Apple/MS cabal

2. Other companies

Companies in 2 can always just pay more for what they want, since they're not governed by the cap. If they did that, of course, they could pull a bunch of people away from 1 and the price level would keep rising. That didn't happen because (mostly) only companies in 1 are able to pay at near the cap level anyway. So there might be inefficient hoarding, but it's just companies in 1 hoarding from each other.

It doesn't analogize exactly to, say, anti-gouging price caps for gasoline in a snowstorm (which, I agree, lead to terrible shortages and inefficient allocations), because this is equivalent to the gas stations setting a price floor (people shop at places with the lowest prices but work for the place with the highest wages). And then some gas station down the street opens a gas station with prices lower than the floor...


Have I missed some news, or is your inclusion of Microsoft in the cabal erroneous?


From the article (quoting Pando):

> ... what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP

You can also see Microsoft in the screenshot of Google's "Do not call" list.


Sure, but look at which category the companies complaining about shortages are in.


I assume you mean 1. But if they're complaining they can't get enough engineers, it can hardly be that they're also hoarding them, right? At the very least, the companies that are a) paying the most and b) looking for ways to access a larger labor pool have got to be using the engineers they have at near maximum efficiency. Otherwise, those would be weird levers to pull. They actually are the companies that in an honest market get the engineers anyway; they already pay at the top of the market. That they've dodged paying for it in full doesn't change that.


If you look at it from a more negative perspective though, lobbying for more H1-B visas is an even more effective way to decrease engineer compensation, because you can reduce your salaries further by increasing the pressure on US engineers by threatening them (implicitly or explicitly) with losing their jobs to cheap foreign labor. One could easily argue it looks like two sides of the same coin: using every dirty trick available to avoid paying engineers according to their actual value to the company


I'm completely willing to believe that big companies have poor intentions when lobbying the government. H1-Bs are just more market distortion. (I personally believe we should just hand software engineers green cards at the airport and remove the cheapness from foreign labor. More engineers, but without the bullshit.) I'm just saying it doesn't make the engineer shortage less real. All the ways you hold down salaries are ways that companies are dodging honestly dealing with a legit shortage.


If a company in category 2 (in the above ) pulls enough weight to make a significant change, then the companies in category 1 will add this company and pull it into category 1.

Said company would gladly go along since it benefits as well.


The lower price will further reduce supply, by encouraging potential employees to move to better paying alternatives, outside the domains in which salaries are being fixed.


The bigger problem is that these companies all want "rockstars" at age 22 AND ones that will be "company men".

Neither Bill Gates nor Steve Jobs would get in the DOOR at a tech company today. They didn't finish college... Or the RIGHT college. Their own companies would buy their startup and boot them.

It's a culture of childishness that they have so much money and resources they don't have to value WISDOM that employees might bring. In fact they actively ROOT OUT those employees in their hiring processes.. That's why all the games.. They don't want employees that won't play. They have myopic NIH syndrome hard.


> Neither Bill Gates nor Steve Jobs would get in the DOOR at a tech company today. They didn't finish college... Or the RIGHT college.

It helps a bit if you are filthy rich at the beginning.


Jobs was many things, but not filthy rich at the beginning.


Neither Bill Gates nor Steve Jobs would get in the DOOR at a tech company today.

Oh, I have a feeling they'd squeak by, somehow.


Technically.. wouldn't they start their own companies and be in charge of the door anyway?


> 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.

Actually, it just gave the non-engineers more leverage. If the engineering rates where higher, there would be more engineers who would be founders. Engineers would have a larger % of the startup, since non-cash compensation would have to be offered.

Also, the artificial deflation caused some engineers to be stuck in a bad job.

That's why I won't be anyone's employee. It's a bad deal for me. It's a bad deal for many engineers who are employees right now.

Unfortunately, it took me a while to learn the game. There's a business side to being an engineer. You don't learn that being an employee. It's against the interest of the management to have their employed engineers think that way.


>What illegally driven-down wages mean is that the shortage is more acute that previously thought.

No, it just means the sense of entitlement amongst tech CEOs is even greater than previously thought.


I used to be a full time software engineer for a major tech company in the US, but quit after one year. The low six figures salary wasn't enough incentive for me to stay at that job, given how much I disliked the nature of the work.

But if the salary was higher, there is a good chance that I would have worked at that job for longer than I did. So I think salary does affect labor supply, and the supply of engineering talent is not as inelastic as you may think.


I think your edit hits the nail on the head in regards to higher salaries attracting more people to the profession. I've posted about this a few times here on HN if you care to look at my comment history but basically the efforts our politicians and our bosses go through to bring in foreign workers and suppress wages results in signalling to potential entrants into the tech employment market. If you take a smart person (which we've acknowledged tech workers are, because gosh, we need to drink from the global talent pool to find such smart people), and they have many options including protected professions that are definitely more lucrative and don't have any of this downward pressure, what choice do you think this smart person would make?


If I read it correctly then they are not holding wages down as such, but are trying to avoid employee poaching. Raising wages might be a result of active competition, the question is how much. My guess it would relate to only a small set of exceptional individuals.

Rules for wage negotiation for ordinary employees have generally much bigger impact.


> If I read it correctly then they are not holding wages down as such, but are trying to avoid employee poaching.

Well then you are not reading it correctly. What does it say?

>> Google is the talk of the valley because we are driving salaries up across the board

Schmidt says as plain as day, in e-mails that escaped his admitted attempts to remove a paper trail, that this is about holding down wages. He says it as plain as you can say it. I can read this, and the other HN readers can read this in black and white. That people like you feel the need to deny this happened when they have been caught red-handed says more about you then it does about what happened.


I'm not taking the route of personal insults as I believe this type of comments should not be in HN in first place.

Yes, I read it very well. Schmidt indeed mentioned holding the wages down, BUT from the context it's clear they mean those who are targets of employee poaching. And that's certainly not everyone - quite the opposite, only exceptional individuals or strategy hires.


Then again, policy means you can't, like, make more than your boss or anything like that.


This is true and of course it's hard to quantify how much wage impact this had on the numbers. But since the companies' explicit goal in these poaching rules was to keep salaries in check ("we are driving up salaries across the board"), I think it's safe to say it was substantial. Poaching usually requires giving the poachy a raise.


Switch tech companies a couple times. Note what happens to your salary.

Hint: It doesn't go down.


> 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.

Amazingly short-sited argument. It forces people to either accept a low paying job in a field they love, or find another field just to make ends meet.


High price isn't simply a signal that there's not enough supply, it's also the mechanism that increases the supply. If engineers get higher pay, more people will choose an engineering career (rather than management, law, medicine or other high paid professional careers Edit: or Wallstreet, which does pay top dollar for math geniuses to create new derivatives that bring down the economy).

The companies themselves have created the shortage they're complaining about.


No, you measure a shortage by the number of unfilled vacancies.


The brilliant Ivy League kids that go into finance are still going into finance. The pay after 3 or 4 years of experience is way better than in the software industry.

When Harvard grads start choosing Google over Goldman Sachs, I'll believe in the engineering shortage. Now excuse me while I return to my 10 hour Craigslist odyssey to find an affordable Bay Area apartment...


There's not nearly as many Wall Street jobs as there used to be, which is why a lot of these smart college grads end up in in S.V. chasing VC money to start companies...


Plenty of CS majors do.

I'm not even sure if finance beats CS pay for those in the top-tier, especially on a per-hour worked basis. It may be hard to track as so much comp in finance is bonus and so much in CS is equity.


It also means that tech giants do not really value the product and output of their engineers. They're willing to screw them over.

It also means that the deflated salaries/compensation may have led to managers/business/finance decisions being all wrong - investing in some projects but not others and skeweing the technical landscape. Im thinking of things like GWT or dartlanguage, and the like, which if engineer prices would have been correct probably would not have been made at all.

The conspiring to lower compensation has hurt the field and profession of software engineering as a whole.

This shortage of "engineers" is another excuse to make government pay for education or take more immigrants and pay for them, their health care costs, language education etc, to make tax-payers pay for recruiting engineers to the tech giants.


> It also means that tech giants do not really value the product and output of their engineers.

I think the opposite. It is not in the best interest of "the product and output" for engineers to keep switching jobs every few months to get increasingly greater salaries for the same work. It creates incentives to not care about the product.


What has switching jobs to do with this?

How many lawyers do you see switching jobs every few months?

Anyway software engineers shouldnt care about the product once the project is completed - the job to take care of the product is with devops or maintanence people. Development, and thats it.


It's all propaganda. There's no engineering shortage. They're all just trying to flood the market with more engineers from all around the world.

It's all propaganda plastered with a nice marmalade of feel goody "let's help the immigrants", or "everything great about our country came from immigrants", or other such variants of rhetoric. It's actually very smart, because it plays to the tune that people dance to.

That said immigration policies do need to change, and immigration is indeed a good thing for this country. Attracting talent is a lot of what makes this country great, but we need to be careful with the fine print of such policies as to not destroy our own economy.


> That said immigration policies do need to change, and immigration is indeed a good thing for this country.

I want them to change too... but in a different way. I'd rather that we take the unwanted and wounded, the homosexuals threatened to receive capital punishment in Uganda, the atheists who worry for their lives in Saudia Arabia, the homeless in Mexico yearning for just a small improvement in the access of opportunity (no matter how small of a step it may be). Let the Indians keep their talented engineers -- let them improve India, god knows it's got enough problem of its own, don't send them to us here so they can make another silly app. Let China keep its engineers, so they may one day create technologies that truly challenge the great firewall.

Seriously, is it just me who sees this aggressive attempt of siphoning the world's talent as being opportunistic and predatorial? This is not the spirit of America that Emma envisioned, this isn't something to be proud of.

    "Keep, ancient lands, your storied pomp!" cries she
    With silent lips. "Give me your tired, your poor,
    Your huddled masses yearning to breathe free,
    The wretched refuse of your teeming shore.
    Send these, the homeless, tempest-tost to me,
    I lift my lamp beside the golden door!"


Idealistic and well-intentioned. But there's little opportunity in many places for Engineers to be fully used. Its a positive good for humanity to get the most out of talented people. That can happen in America.


> Its a positive good for humanity to get the most out of talented people. That can happen in America.

I seriously, honestly doubt this.

Consider the main force behind FWD.us: Mark Zuckerberg.

You're telling me the most positive good for humanity to get out of talented people is at Facebook, where the most valuable people to the company are those who optimize advertisement algorithms that exploit cognitive biases of a population already being challenged in all sorts of horrendous ways?

I really don't think your perspective is getting things right. If the engineers want to make great apps for Android or iOS, they can make it sitting in India or China or Brazil or wherever.


Who says Facebook will be where they end up? Will the legislature make a 'facebook' law? That's disingenuous.

Silicon Valley is definitely a place where talented people can find their own, and thrive.

Americans move there, to take part in the opportunities only available by meeting and visiting personally. Its a second-rate experience to try to do it from afar (this from a guy that is 2000 miles from SF), especially if you've never been there and have no contacts.


Highest delta to GDP is not the most good for humanity.


In this international world, lots of things invented in SF end up helping people all over the world. It doesn't have to be about the money.


> Let China keep its engineers, so they may one day create technologies that truly challenge the great firewall

Aha! Eric Schmidt had to just write a clever email like this instead and he would be applauded instead of criticized. To Apple: We would rather that you keep your Engineers - god knows you've got enough problems with your services! We will keep ours in return!

I guess if the huddled and poor learn programming, get good at it and start working for less - that'd be the right time to send them home to fix problems in their homeland and look for other huddled and poor - lather, rinse, repeat and all of world's problem magically disappear. Hey "the other" people are malleable masses with no ideas/likes/visions of their own - we can do as we please with them. Oh and they all, being Engineers have absolutely magical powers to solve any problem you throw at them - Terrorism, poverty, energy, hunger - you name it and they will solve it no matter how much oppression and apathy and violence confronts them!

Yeah, you made it sound idealistic but it's hypocritical and has no chance of working. It isn't far fetched to say that if the Engineers in China/India saw a way to make great opportunities happen in their own homeland to further their and their country's interests, they would never migrate to whole another continent in the first place. It isn't easy to migrate you know.


>Let the Indians keep their talented engineers -- let them improve India

It's all about the choice, isn't it?

Me staying in my home country doesn't improve it anyhow.

Those who try hard to improve it somehow tend to end up in jail.


Emma was never elected, never had to make a payroll, etc. She was a young woman who won a poetry contest.

So using a short poem as a way to justify the complete overhaul of American immigration policy seems a little odd.


I love how the discussion has gone from wage fixing to keeping out Indians and Chinese in the name of improving their countries. FYI, Indians and Chinese engineers come here because they are just as powerless as your atheists, homosexuals etc in their countries (but not discriminated against directly).


We should give American citizenship to everyone in the world with an IQ test below 80. There is no way this policy would cause any social problems.

Can't make a living in the information economy? Uncle Sam wants you!


There's no engineering shortage. They're all just trying to flood the market with more engineers from all around the world.

You could argue that this is the actual natural order of things. Let the free market decide the value of an engineer, not arbitrary government regulation. It is the Silicon Valley way, after all.


Government control of immigration is a natural consequence of government establishing and defending a border. If you want to take the free market to its logical conclusion, we should get rid of that too, and leave Silicon Valley to its own devices vis-à-vis fending off hostile foreign actors. Historically that sort of thing has not worked out well.


Note that the products/services made by these immigrants are sold globally, not just in the US. Google, for example, acquires more than 50% of it's revenues from outside the US.

If you don't object to google's selling it's services across the world on free-market principles, it'll take a rather large leap of (il)logic to constrain the employment to be restricted to the physical location of the HQ of this global company.


Movement of residents is fundamentally different than movement of goods. Moreover, nothing constrains Google from hiring people in locations outside the US to service those markets.


Free market is strongly against "Cartels". Because, yeah, ceo-cartels are another way of arbitrary regulation. See them as a "maximum wage fixed" and you get why.


UH, CEO collusion is the same as "arbitrary [executive] regulation"....

The free market is what the actual value of the engineers is - not how the CEOs choose to work together to suppress prices.


Oh, I know. I wasn't disputing that. Just making an observation on perspective - that the current system of limited immigration is not the fairest, but it's in the interests of developers today to resist it being changed.


The natural order of things is that we have a process in place to create and change government regulation. If someone thinks that process is inflexible or arbitrary doesn't given the prerogative to break the law to get around it.


The natural order of things is the formation of powerful groups that ruthlessly exploit their environment. Ironically the Free Market needs governments to provide the institutions in which it can operate.


> we need to be careful with the fine print of such policies as to not destroy our own economy.

Au contraire. Many Americans and Europeans would get a huge and valuable smack with the clue-bat if there were no immigration restrictions, and if licensing schemes designed to create arbitrary shortages of e.g. doctors were eliminated.


I think immigration policy will eventually be nonexistent, but before then many things need to happen. The developing nations need to achieve a certain quality of living across the board so that the people there don't all just decide to get up, and leave.

Economies need to become less decentralized, and more global in their scope. Which arguable is very much a reality today, but I think this is simply the beginning.

And there's a whole host of other developments that need to happen, but I believe eventually will happen in the coming decades. We'll see a more homogenous world, yet also a more diverse one.


This is prima facie collusion and corruption. These executives should be fired and prosecuted for fraud and collusion. If it doesn't happen, it means our society endorses corruption and encourages this, and we'll see more bad behavior.


It won't happen. Our society does endorse corruption as long as its profitable enough.


Our society also endorses torture by imprisoning the people who exposed it and letting the ones who did it be free...and there are more examples of worse things than this that "our society endorses".


My understanding is the DOJ has closed their case. There won't be any prosecutions.


It could happen at the state level. And many of these co's have physical nexii all over, not just CA.


The whole "immigration reform" is a continued effort by these companies to import cheaper labor...

Don't be fooled by altruistic PR coming from Zuck and others...


This may be heresy on HN but this actually proves the engineer shortage. If there wasn't a shortage, they wouldn't need non-poaching agreements.


Isn't one of the common arguments that they're isn't a shortage the companies just aren't willing to pay enough to get people interested. I mean when I think make BIG money in IT I think startup and all the risks involved or management rather than high level engineer. That will have an effect on who joins the industry.


It supports the idea that the cost of finding someone of similar criteria among the unemployed, or taking a less skilled programmer and investing in them, exceeds the cost of finding them among one's peers.

That's not necessarily a consequence of there being an engineer shortage. You'd expect much the same behaviour if most people who emerged from uni, or worked commonly in IT, didn't have the criteria they were interested in.


Not really... Because companies in Silicon Valley poach employees on purpose to interrupt other companies. It's a real problem in a lot of industries.

I'd note you don't see Microsoft in this because they stayed in Washington and bought employment laws they like. So they can force employees to sign non-competes in Seattle while they poach from California that won't allow companies to do that.

Working in an auto state, I've seen that in other industries and it's actually kind of sickening. In the auto industry it's in bad taste to do that. Many auto suppliers have no-poaching in their business contracts. Which ties up a lot of the industry because everybody does business with everybody. As an EMPLOYEE you can apply to another job, but recruiters aren't allowed to cold-call between companies.

I've worked in an office where we would get cold call agents during work. They'd call all the extensions in the office and it was just offensive being put on the spot like that. I can't imagine working at Apple or Google and getting calls like that... And the work environment becomes "awkward" for the rest of the day because everybody knows everybody got a call... There's nothing good about that type of hiring practice.


"I'd note you don't see Microsoft in this"

Micrsoft was one of the (many) companies listed with which Google had similar non-poaching agreements.


A developer is pretty well paid when compared to other professions regardless of the price fixing scheme. I'm not sure fixed pricing and developer shortage are linked.


Software engineer's salary is nothing compared to doctors, lawyers and financial traders who enjoy protections from their organizations and a reputation of "being just expensive".


Lawyers and financial traders, maybe. Doctors, not so much (at least in the US). The NRMP is a far more effective wage-fixing cabal than anything anyone in silicon valley could ever dream up, and it's 100% legal.


> Software engineer's salary is nothing compared to doctors, lawyers and financial traders who enjoy protections from their organizations and a reputation of "being just expensive".

Not really all that true, for the professions as a whole, except for medical doctors, who are far above any of the others.

Per the BLS Occupational Outlook Handbook [1], 2012 Median salaries for various professions:

Securities, Commodities, and Financial Services Sales Agents: $71,720

Software developers: $93,350

Lawyers: $113,530

Physicians & Surgeons: >$187,200

[1] http://www.bls.gov/ooh/


In the valley I think I'd rather be a software engineer than a doctor or lawyer if I wanted to maximize my expected career earnings.


I should point out that your Expected career earnings has nothing to do with your profession and everything to do with what you actually do.


Yea, to the contrary, they're actually trying to decrease the upward price pressure of the natural market.


They decreased inflation immediately prior to a major period of financial instability. We all owe them a debt of gratitude for the foresight demonstrated. Corporate tax cuts for all involved as reward.


The income and standard of living for software engineers in Silicon Valley is so high that low wages are not the constraining factor in engineer population.


I have long told recruiters that I'd need something in the $250k range to even consider working as an engineer for a corporate tech shop. The work is brutal. You sell your mental life to hippie robber barons who write emails in all lowercase while siphoning enough energy out of you to buy second-hand nuclear icebreakers for personal yachts.

None of them has yet taken me seriously, but thankfully this reduced the number of calls I was getting.


> I have long told recruiters that I'd need something in the $250k

I wish more people were like you.

Disclaimer: I do the same.


The average salary for a "software developer, applications" in San Francisco is about $111K a year. In San Jose, it's a bit higher, at 116K a year.

http://money.usnews.com/careers/best-jobs/software-developer...

The median price for a 3br house in SF is (I used zillow's numbers for this) 1.1Mil.

(btw, check the pay for the other "top 10" professions in high cost areas like SF. It does make economic sense for top students with good options to choose other fields).


Why do we keep bringing up these issues as if they were mutually exclusive?

The whole conspiracy has not been driven by a desire to bring down wages (most of the involved company can pay the price), but by the instability caused by an already existing shortage.

Yes, driving down wages only makes the issue worse, and lobbying for migrant workers whilst doing so is extremely hypocritical.

But at the end of the day it's a symptom of the problem, not the root cause.


Read the policy. It's basically against poaching executives. It specifically says that anyone at the individual contributor level (ie developers, designers, testers) are all fair game. At the executive level for these places, salaraies are probably $300K-$30M range. I feel like depressing their wages isn't a pressing issue for this country.


In your rush to bash illegally-colluding tech execs for the engineer shortage you seem to have missed the end of the article where the policy is posted. From that document:

"For each of these 'Restricted Hiring' companies...

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

The majority of the companies included were just on a "Do Not Cold Call" list, but Google would actively recruit people from those companies based on referrals, and of course based on applications.

So, if you worked at Apple and applied to Google, Google would actively recruit you.

I fail to see how this policy has anything to do with an engineering shortage. It may well be deemed illegal, but it's certainly not as bad as you're making it out to be.


This is an interesting fight to watch from here on the sidelines, given that many employees were colluding to drive up wages - here on HN, we had people boasting about having a stable job, then hearing about a job at another BigNameCo, and applying for it just to drive up their own wage. No intention of leaving their own company, and that it was turning into a routine process rather than the odd here-and-there.

I'm sure there will be apologetics, but it's not like one side was behaving ethically.

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.

This field where wages are still significantly above mean values? Where are these engineers going to go en masse for better wages? Into medicine? Hello for another 10 years training. Law? Already overstaffed, and wages are similar for most anyway. Finance gets some, but isn't going to hold them all. If the engineers are in the career for the dollar, restarting in another career that will pay more is going to be difficult as a group.


You are comparing a legal practice that demonstrates real market value to an employer - i.e. here is a document that shows another participant in this market is willing to pay me $X for what I can do - in a salary negotiation to an illegal practice which distorts the market by decreasing competition.

A legal practice which increases competition and increases the allocation of resources to productive individuals can't be compared to an illegal practice which decreases competition.


Are you suggesting US law requires companies to aggressively try and poach each others staff? That would be remarkable and amazing if so. What if you aren't particularly interested in staffing a large recruiting division, and don't cold-call anyone? What if you think cold-calling is like spam and just feel it's not something your company should do? Do you get in trouble for holding down wages?


No, he is suggesting that making a mutual agreement not to do so is illegal, just like a whole range of other actions that have price setting effects are legal when a company does it in isolation but illegal when multiple companies collude to affect the pricing.


Ah, counter ethics with legality? It's legal in some jurisdictions to confiscate the property of a person and sell it before that person has seen the inside of a court. There was an article recently on HN about that, but Jello Biafra spoke of the problem as far back as the 1980s. Using your litmus test, this activity must be ethical because it's legal.

I do not think it's ethical to scare the other party by threatening actions that you have zero intention of carrying out.


The agreement explicitly excludes engineers.


>we had people boasting about having a stable job, then hearing about a job at another BigNameCo, and applying for it just to drive up their own wage. No intention of leaving their own company, and that it was turning into a routine process rather than the odd here-and-there.

Regardless of your opinions about the morality of this practice, there's no basis for calling it collusion.


Sure there is - people here on HN were openly talking about colluding with their friends in other companies to do it.

It's not to say that all engineers were doing it (which I think is a salient point), but in all these arguments, the engineers are painted as naifs who had done nothing as a group to merit this. To be clear, I don't agree with the ethics the companies displayed, I just think it's unfair that the collusion between some engineers gets glossed over amongst all the outrage.


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.


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.


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.


Apple played an important role in this, but that's irrelevant. The fact that this is still going on holds equal wait on all the Silicon Valley giants. I mean who cares if Apple played a role in this. Oh right... We hate Apple...

The fact of the matter is these are companies that are self interested, it just so happens that a lot of their technologies agree with what many people believe. Decentralization of power, power to the people, internet, technology, rebellion against old ways, etc. etc. But we can never forget that these companies are exactly what was in the past, just in a new era with new toys.

If we're to make progress it's important to try, and do things differently.


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.


>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.


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.


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..


>Not only were the borrowers not jailed

Yes, that's because debtors' prison is considered immoral. Failing to pay back a contracted loan is not stealing, since the loan was given with the lender's consent and, had they done their homework and acted honestly, their exactly quantified knowledge of the risk of nonpayment they were taking on themselves.


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.


I worked there as well. The problem is that the kind of selective agreements are a form of market collusion that is enshrined as illegal in anti trust law. So even if it "makes sense" it also infers with market dynamics.

Finally, the notion that this was an individual thing and there were no class impact is not so. The reason is that these companies have "brackets" for pay. If you are at a certain job title you make $X - $Y and corresponding amounts for options etc. These companies are also very interested in equity among the employees so if prices start rising they will have to draw up the low end affecting prices across the board.

To the doubters, I point to the Facebook/google incident. Google was forced to give across the board 10% raises to every single employee because Facebook wasn't willing to sign anti poaching agreements.

It's interesting that arguments essentially from das kapital are being raised here. Wages vs productivity. Intrinsic ideas of fairness are universal (and possible primate, studies showed).

Google is in a weak position here.


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... I confess I don't know the numbers for 2005, but it should be easy to look up.


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

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


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...

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.


Where is that source getting data?

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

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.


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


That's still insane money per employee, and as far as I understand it, then most of their money making is coming from ads.

I would love to know how much they make per employee from that department alone...


A profit of $250k/employee-year is still easily enough to double or more than double a lot of people's salaries.


Just because you and 'some' of your coworkers thought programmers are 'ridiculously overpaid' doesn't mean all of your coworkers felt that way. As such, the suit is just that, for those other employees that felt gipped.

The way your leverage mutually assured destruction here is just sugar coating the very nature of collusion like the telecomm companies. When no one lowers prices and compete fairly, the customers (and by analogy the programmers) loses out. So it doesn't just /look/ like evil collusion because it /is/ evil collusion.

I just wanted to clarify to anyone reading this passage here.


"Google is the talk of the valley because we are driving salaries up across the board." "I would prefer Omid do it verbally since I don't want to create a paper trail over which we can be sued later"

It's evil collusion to keep salaries down.

Not discussing your compensation is another example of something we've been sold on as "common sense and civility" though it's illegal to restrict it.


"We, as programmers, are ridiculously overpaid already."

This must not have been true, if collusion was necessary to keep wages down.


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.


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.


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.


That's one sort of "fairly" - that employees should participate in profit sharing and that their compensation should be tied directly to the value they create (though should employees also share in the losses?).

Another kind of "fairly" is that Labour is its own market, and employees should be paid commensurate to their replacement cost.

Both are valid models, though the latter is much more common. The difference between which model is followed can often come down to the negotiation abilities of the individual employee (or their agents) and their relative scarcity. E.g. an extra for a hollywood blockbuster movie is paid the same daily rate as an extra on an independent art-house film - because it's easy to hire extras and they are interchangeable. The movie stars on the other hand are more scarce (at least those with marketable reputations are) and so can negotiate points on the gross.


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


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.


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?


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?


You pay replacement costs to all of your employees, so that you don't care whether they leave or stay. That way it depends on the market, not their worth to you.


Does Google give bonuses? Because I'd like to think they could afford to give a million to each of those people if that actually happened. If not cash, stock or something else. It's a hell of an accomplishment.

Bonus programs could cover rare events of massive success so employees don't feel so taken advantage of. Certainly if this team could regularly produce $100 million in revenue, they wouldn't be paid $90k.


Money not given to the employees doesn't vanish, it's allocated to the owners.

So no matter how you do it, you're quantifying how much some people are worth. Sometimes it's the employee, sometimes it's the owners.


Isn't the case for owners that the quantifying is "what ever is left over"?


I don't know and I doubt that can be done for a large tech company. I only mentioned averages.


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.


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.


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.


> 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.


That's extremely interesting, but how does it jive with the emails about the Safari team? The Safari team probably has some management, but I assume it does not have a sales department.


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


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.


Wow, this whole hubbub about them keeping down engineer salaries is completely disingenuous if that line applies across the board.


[deleted]


Because its an anticompetitive attempt to suppress employee wages?!


For the same reason as why big companies can not cooperate prices with each others. If they do, free market can not do its magic. Free market works only if there are many competing independent players, everybody knows everything and everybody can change who he is making business with at any time.


Indeed, I am even more confused about this now that there's email evidence. The agreement is about active recruiting not blowing off applicants.


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?


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!"


Huh? "Facebook sponsored stories feature"?


Presumably the parent is talking about when FB used users' likenesses alongside product endorsements in their friends' feeds, without the user's knowledge.



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 to get more examples of dark patterns. Facebook in particular is expert at it, e.g. see 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).


Isn't it illegal?


Blatantly, and has been so for a long, long time. I might be able to buy that Brin circa 2005 was unaware of that, but not Jobs, Schmidt, or Whitman.

Edit: It's been clear at least since Nichols v. Spencer International Press in 1967, and arguably since Radovich v. National Football League in 1957.


Yup. This type of stuff is a major no-no and is taught as such in pretty much every entry-level econ and business class. All of these executives know better and were simply trying to skirt the system. There's going to be a huge settlement over this.


And significant recognition of the issue goes back to at least 1776's The Wealth of Nations by Adam Smith:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."


Those awful unions. Oh well, back to illegally depressing wages


I don't know the U.S. justice system really well, but from the e-mail it seems E. Schmidt was aware of the illegality of their actions, being worried about being sued and a paper trail.

Doesn't that make this an 'aware' and 'intentional' crime, therefore the only resolution would be for him to go to prison for some time? Is it really possible for someone to settle their way out of this with a general prosecutor?


who will the settlement be with? i.e. who will get the monies?


I believe there were settlements with the Justice Department, there's also a pending class action lawsuit. The class is all of the employees of the relevant companies during the relevant time period. (I.e. Apple, Intel, Google, Intuit, Pixar, Lucasfilm and Adobe technical employees from 2005 through 2009.)

Unfortunately, the US class action system is somewhat corrupt and in many cases the suing attorneys get the lion's share of the money, while the class members get injunctive relief, a coupon, or a nominal payment. Or sometimes they get nothing at all, and a charity gets the money (this is called a cy pres award).

More information about the class action lawsuit:

https://www.hightechemployeelawsuit.com


Bradley laid it out well, but I would go even farther. This million employees had significant wage suppression effects for the _entire_ market, not just the employees that were working at the firms in question.


I'm surprised this is illegal. I worked for one company, and was offered a job by another. However, after accepting the offer, their legal department came back to me and said they could not hire me after all, due to having an agreement with my current employer that they cannot hire an employee away from the other within a two year period. My understanding was that this was a contractual agreement between the two companies. How can they have a contract for this if it is illegal, is it different than what Apple and Google did?


Call me a dreamer but creating a startup is one way around this.


One way this problem has usually been prevented is by having a competitive marketplace, so it's not really dreaming to suggest that startups can be part of a solution.

But it's tough to shake up markets that tend toward oligopoly, and the big players can simply acquire any threats before they can deliver a punch in order to maintain the status quo.


Professional organizations, Unions, Licensing. Don't be anybody's employee. You lose much leverage & tend to get stuck by being an employee.


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.


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.


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.


> 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.

I agree that would be seriously problematic and run afoul of at least the intent of the rules, but I haven't actually seen any evidence that it actually happens that way. And in the meantime, anti-poaching agreements clearly do undercut salaries; that's why they were--at considerable risk to the companies--implemented in the first place.

On your last paragraph, I have two thoughts: a) at least that would be above-the-board and could be evaluated by potential employees, and b) while employment law varies considerably state by state, it's generally not the case that the employer can enforce arbitrarily restrictive clauses. I know in Massachusetts, enforcing a non-compete requires meeting some reasonability requirements [1] and AIFAK California is even more pro-employee on those things. Just because you sign it does not make it so.

[1] http://ask.superlawyers.com/massachusetts/non-compete-agreem...


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.


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.


Fortunately, I think Steve Jobs is dead by now.


There's a major distinction in kind between the two examples you give: one of them is conducted in the open and involves input from society at large - ie, acting through the government.

If the execs didn't think what they were doing is bad, why did another major CEO refuse citing that it's probably illegal? why did they take efforts to hide it from the public and employees?

Tariffs aren't done in secret, nor is there a lack of public input on the practice.


The main problem is that this is done behind your back. Thats your life they are basically agreeing to control.

There should be no issue in people hiring from each other and thus no need to make agreements behind everyones backs.


"There should be no issue in people hiring from each other..."

These internal policies did not restrict hiring for the most part, they just restricted cold-calling and active poaching.


In my world it's makes no different. My employer deciding how other people may approach me. I don't even know what to say.


"Poaching" as an anti-competitive angle is the same as saying a sales pitch to another company's customer is anti-competitive. Customers don't belong to a company, and people don't belong to a company. The comparison to the steel goods scenario isn't appropriate, in that those resources are the property of a company.

Mostly, the last thing any of us wants is a select group of dominant companies making a collective decision for the industry.


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.


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.


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


"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


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


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


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.


... 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.


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.


I'd like to see criminal prosecutions here.


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.


It was more than a couple of top tech companies:

http://pando.com/2014/03/22/revealed-apple-and-googles-wage-...


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.


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). 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.


>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.


>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.


Got it, not animals... property


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


Money is only funneled to stockholders if it is used for dividends or stock buy backs, or indirectly, acquisitions. other possibilities are hiring more workers, spending more on capital purchases, doing more r&d, or making exterior investments.

Calling this theft when the tech workers (im not counting executives and high level salesmen) in question could apply for positions themselves if there were dissatisfied with their current compensation is hyperbole.


"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"

There has been plenty of evidence over the past 12 months that there was exactly such an agreement "not to hire people who apply".


Did you read to the end of the article? You know, to the part where the actual internal policy document is posted.

If you had actually read that far you would have seen that this was in fact a "no cold call" agreement for engineers.

If there is plenty of evidence to support your alternative claim, would you mind posting some? Because the original document posted in this article appears to show clearly that the policy was simply "do not cold call".


>Did you read to the end of the article? You know, to the part where the actual internal policy document is posted. If you had actually read that far you would have seen that this was in fact a "no cold call" agreement for engineers.

From the end of the article you just referred to:

>Google has agreed to the following protocol: 1. Not to pursue manager level and above candidates for Product, Sales, or G&A roles - even if they have applied to Google.

So yeah, Scott_w is correct in saying that there was an explicit agreement not to hire people who apply. It does not get more explicit than written in black and white on an official hiring policy memo.

Regarding engineers, the poster above you referred specifically to 'people', not the subset 'engineers'. He was correct in his statement and it appears that he did, in fact, read the article all the way to the bottom.


The crux of your argument is :

1) keeping wages suppressed might be a good thing for the regional economy and long-term health of the tech industry

2) tech workers are already well compensated

Those are fair opinions, but the behavior described is still illegal. This is one of those situations where we can't have it both ways.


He makes both of those points, but I think the point of hours argument is that the behavior we're seeing is tech companies agreeing not to cold call, and no other form of not hiring or price fixing, and that as long as this is limited to stopping cold calls it isn't illegal.


I believe it is illegal to have companies collude to not actively recruit ("cold call") from each other. It diminishes the market demand for those employees and indirectly suppresses their wage.


> tech companies agreeing not to cold call, and no other form of not hiring or price fixing, and that as long as this is limited to stopping cold calls it isn't illegal.

Yes, it's still illegal.


Point number 1 in Google's "do not cold call protocol" clearly states that manager level and above candidates from these firms are not to be pursued even if they have applied to Google.


No, that's the "Restricted Hiring" section. The "Do Not Cold Call" section says nothing of the sort.

The Restricted Hiring section is actually rather interesting. Why the ban on pursuing managers from Microsoft, Novell, Oracle, and Sun? Of note it says that only for "Product, Sales, of G&A roles", but pursuing engineering at any level is fine.


There's a lot being lost in the spin of these agreements as "price fixing". It looks to me like companies were also trying to prevent leakage of product plans, and minimize the disruptiveness/cost of high turnover.


> Why the ban on pursuing managers from Microsoft, Novell, Oracle, and Sun

Because the agreements quickly expanded to include those companies.


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


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


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


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


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.


> 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.


I wasn't arguing that its legal. I merely argued that there's nothing immoral about it. No rights to do anything are being violated. People are just agreeing to not exercise their rights.

And rights are not duties. We can exercise them or not.

Just because people are wildly successfully and in charge doesn't take away their basic rights, even if you don't like the outcome.

Everybody is still free to work with whoever will agree to work with them. There is no right to coerce others to do what we would prefer.


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


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".


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.


It's a little different when these are the primary tech giants in the field even offering those positions and they work together to keep your position at a lower salary. "Not work for them" would mean leaving the industry.


Yeah, oil barons could voluntarily agree on selling for 500$/barrel as well and you could voluntarily not buy from them. Same goes for cable companies or electricity vendors or any other monopoly. That would kinda suck if people controlling most of the resources (or all of them in given area) would agree to not compete. That's why it's immoral and illegal.


Compared to corporations, individuals are relatively weak. These laws are meant to keep power in check.


So the rich and powerful should be free to make agreements to lower salaries, but the poor and weak should be prevented from making agreements to raise salaries?

Too many on the right seem to think it's bad when the government does something but have no problem when corporations do the same. But in reality a government is just a bunch of people agreeing to act in certain ways, just as a corporation is.


Problem is employees are getting into agreements the full terms of which are not known. In effect part of their contracts/understandings are written in invisible ink- A non-compete of which they are not aware.


cartel =/= free market.


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



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.


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


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?


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.


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


Exactly the same argument, and exactly the same rebuttal applies to price fixing.


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


They are. Have a look at the last document.


"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.



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


Watch talk by Lawrence Lessig SCALE 12x: https://www.youtube.com/watch?v=D3O1MC1AqvM


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.


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.


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.


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.


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.


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.


I cannot believe they were discussing such sensitive issues in plain text!

I'd be worried to admit that I signed up for free pack of crisps from two different emails breaking T&C

My tweet: https://twitter.com/stefek99/status/448045158836097024

What the hell were they thinking?

I just wonder if anyone will go to prison... And how will stakeholders / stock market react?


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


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?


Well hello Sergey Brin.


a


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-...


"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.


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.


Nope, recruiting doesn't just move employees around, it drives up developer salaries.


Exactly. People wonder why salaries are so high in finance. Part of that is intense recruiting competition.

Finance pays out a fantastic amount of profits to the people generating them, i.e. the employees, rather than just the shareholders.


Except salaries aren't high in finance. Bonuses are high, and are usually based on performance.


Um less so now as the campaign against bonuses in the city has led to increases in contractual pay :-)


When you say "nobody benefits", you are leaving out the employees, who will see higher wages as a result of competition for their services.

In fact, if you only consider the companies (and not the employees), this kind of competition is negative sum, not zero sum, which is kind of the point.


I'm sure when Eric Schmidt was being recruited for Google from Novell[1] he didn't get a pay rise or better share options at all...

[1] http://en.m.wikipedia.org/wiki/Eric_Schmidt


Read it again - granted 14.33 million common shares at 30 cents each in 2001. The IPO 3 years later was at $80, opening in the markets at $100 - he made $1.43 billion that morning, in common stock alone.


Yes, I know, I was being ironical Gerry.


Irony doesn't read well in a text medium among people who may or may not have English as a first language.


Irony doesn't read well, but you see there is a comment by me pointing it out. It's also in the context of the previous answer obvious to most people.

Are you suggesting we on hacker news attempt to write comments for the lowest common denominator? I think a lot of people who have English as a second language (American's for example) would still enjoy a bit of irony.

:-)


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

1) Big companies 'move employees around' 2) Industry salaries increase as a result 3) Supply of engineers increases as result of increased demand signaled by the higher salaries 4) Everybody benefits from influx of new talent

The 'new talent' is going to come regardless. It's the salaries in the industry that determine the quantity and quality of those new entrants over the long term.


Not entirely true. The email at the bottom of the businessinsider article indicates that employees from MS, Novell, Oracle, and Sun cannot be considered for manegerial PSGA roles even if they applied on their own.


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

There's one group of people who do benefit from this - employees themselves. The positive feedback loop that comes of such zero-sum scenario raises the salaries of developers and also gives them an advantage when negotiating compensation.

I do side with the companies on this one - such practices waste lots of resources and reduce the quality of company's output, so the society at large loses.


What else is he going to say? That it's not zero sum and he and the other executives pursued this course of action to suppress wages for their producing employess while increasing their own compensation? THAT would be shocking.


> 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

My first reaction when reading this was "well, duh". However, I just noticed that the title of the piece is incorrect. That's BI's bad, they should know better.


Zero sum for the companies themselves, possibly, but certainly not for the developers. If companies have to compete over developers, then developer salaries naturally become more competitive and will increase.

It's an anti-competitive business practice, plain and simple.


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.


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...


It's being downvoted because it represents intellectually dishonest argument (missing the obvious problem with monopolies/cartels) while using "free-market" (the term with positive connotations for most people) to justify it. It doesn't help that this argument is main talking point of neo-liberal propaganda which make a lot of people's blood boil so it's difficult to resist emotional downvote.


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?


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.


paraphrasing a quote I can't remember or find by searching "you can avoid worrying about consequences but you can't avoid the affect of consequences." To your point, people can think whatever they want about how much they think they're worth - but it's the free market, with aggregated supply and demand that actually values the worth.


This is by definition not the free market. You need to go back to remedial free market school. I suggest one course of Adam Smith's Wealth of Nations (pay attention to Book 2, Chapter 2 especially) to start.

If the issue doesn't clear up within the week, please seek further guidance from a licensed professional.


Employees have to think of themselves as an asset with their employer aiming to minimize costs. Salaries are a negotiation with risk involved. It is a free market, with many competing companies aiming to reduce costs. Does a free market mean all companies can't communicate? The companies are still free to hire whoever they want. People are still free to work for whoever they want.

Thanks for the book suggestion, please feel free to quote more books without debating my comments.


> with many competing companies

obviously these companies were not competiting hiring engineers...

> People are still free to work for whoever they want.

whatever.


> obviously these companies were not competiting hiring engineers... ... They are competing for engineers! Why would they make these agreements? To benefit the company. Benefit/cost analysis.


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!


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




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