Hey CEO: Your High Level Agreements Not to Poach Employees are Anti-Trust Violations…

If you've led an HR function of any size for any length of time, you've heard the following:

"I don't want to recruit employees from <insert company name> - I <insert "like the CEO", "like Steve", "know a board member over there"> and don't want to hurt them.  Just steer clear of <insert company name>." Monopoly

Sounds harmless.  It's not.  It smacks of anti-trust violation, and god help you if you're throwing emails or texts around about that.  Just ask Apple and some other Valley companies. From TechCrunch:

"TechCrunch has obtained evidence from the Department of Justice’s investigation in 2010 which was made public this evening for the first time. It appears to support the plaintiff’s case that the defendant companies tried to suppress employee compensation by entering into “no poach” agreements.

The evidence states that the defendants agreed not to poach employees from each other or give them offers if they voluntarily applied, and to notify the current employers of any employees trying to switch between them. They also agreed not to enter into bidding wars and to limit the potential for employees to negotiate for higher salaries.

In one particularly juicy piece of evidence from May 2005, Adobe’s CEO Bruce Chizen emailed Steve Jobs regarding “Recruitment of Apple Employees”. In the message, Adobe’s SVP for human resources writes “Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa.”

Additionally, documents state that there is “strong evidence that the companies knew about the other express agreements, patterned their own agreements off of them, and operated them concurrently with the others to accomplish the same objective.”

For example, Lori McAdams of Pixar wrote an internal email to others at Pixar  in April 2007 stating, “I just got off the phone with Danielle Lambert [of Apple], and we agreed that effective now, we’ll follow a Gentleman’s agreement with Apple that is similar to our Lucasfilm agreement.”

Ugh.  Conspiracy to restrict movement.  To keep salaries down.  On email - nice.

You think you're serving the CEO's wishes by executing the plan not to recruit and engage candidates from a company run by a "friend".  You're doing that - but you're also wading into one of the rare instances where an HR leader would be smack in the middle of an anti-trust lawsuit.

And while that feels big time (look ma - I've been named in a lawsuit related to anti-trust - just like Bill Gates!), it's overrated once you're there.  

May the best candidate win.  Seriously.

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