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Comment by jdross | Hacker News Reader

Apple is cutthroat in business too.

Tony Fadell, the inventor of the iPod and co-inventor of the iPhone, and later Nest founder, commented this in Stratechery about the lawsuit when filed:

"This is Apple’s typical tactic to scare Apple employees — either former or current. I heard this lawsuit was driven by the Apple board.

Steve threatened to file a lawsuit against Nest for poaching 80-100 Apple employees. He called me, screamed for a while with lots of accusations. Then I said, “Steve, it’s Apple’s job to retain its talent, not mine.” He stopped his rant and then we went on to talk about our families and vacation plans. We kept hiring…"

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Apple was the ringleader in the illegal anti-poaching agreements between SV companies a couple decades ago.

These companies (e.g., Intel, Google, etc.) also had to compensate their employees as a part of the settlement. Especially for people in engineering orgs, many of them received decent settlement checks.

No they really didn't. $5000 is not really decent considering how much they would have gained without that agreement.

The amount was dependent on their seniority and a lot of people received bigger checks. Regardless, we can all argue if any amount was sufficient to compensate for limiting peoples' movement among these companies back then....

I personally received a check. It was only a few thousand.

> anti-poaching

The term make it sounds like a good thing, however I do not know if this was really a net positive. It might have helped the companies but isn't this anti-competitive at the employee level?

It was mass-collusion between big companies to prevent people from exercising labour mobility. Poaching is illegal, i.e. theft from an individual or the crown; we shouldn't encourage treating people like company property.

Yes and they got in huge trouble for it. It was a massive scandal. The only reason Apple wasn’t made an example of was because all the other big companies followed suit and did the same thing. It was Steve Jobs that drove this monopolistic behavior that could have turned out much worse for Apple.

yes, which is why Apple got massively fined for doing it -- nowhere near enough to compensate all the depressed engineering salaries though.

And successfully at the time (illegally) squashed unionization efforts by software engineers

I think that's just standard across the US. But the unions are a people problem not a company problem necessarily. People can still form unions even with massive investments to squash them.. Europe has proven that. But the story told to all US workers SEEMS to be, you have to suffer and grind to make money.

I might be wrong but that's the impression I get when talking with US people about unions and workers rights.

Unions primarily benefit the weakest workers, and in places like SV, usually the top workers already are getting fat plates and others are pushing hard to get there.

Think of it like a football club holding a vote to flatten player pay. The benchwarmers will be falling over themselves to unionize, and the top players will be looking where to move too.

This is why union efforts fail, which many find perplexing. The most valuable players get better deals negotiating without a union.

https://en.wikipedia.org/wiki/NFL_Players_Association

https://en.wikipedia.org/wiki/National_Basketball_Players_As...

https://en.wikipedia.org/wiki/Major_League_Baseball_Players_...

https://en.wikipedia.org/wiki/Screen_Actors_Guild

Aren't all of these industries where the top workers get fat plates and others are pushing hard to get there?

I'll take the L, it was a poor example.

Generally when workplaces unionize, jobs are clearly delineated, and everyone in that role has a defined pay.

There is no reason pay has to be flat with a union. The highest paid members of MLBPA or SAG-AFTRA are paid 1,000x what the lowest paid members are.

Interesting point. I think there might be something special about sag given the way Hollywood does business. Everyone switches employers constantly as projects spin up and wind down. Having a mostly permanent role in an organization is super unusual - and I wonder if these roles (like a 20 year soaps gig or the simpson’s) have different stats on working on/off the card.

> Interesting point. I think there might be something special about sag given the way Hollywood does business. Everyone switches employers constantly as projects spin up and wind down. Having a mostly permanent role in an organization is super unusual […]

And yet all the major US sports have player associations/unions with minimum salaries. The players are hardly constantly switching, and when they do switch it's often not their own choice but rather their employer/team trading them.

What are you talking about? Unions don't mandate equal pay for all members.

If Silicon Valley had unions, employee stock options would end. And along with it, most of the incentive structure that drives innovation in the valley.

Not to mention the all remote workers available to fill in, both within the US and outside it.

Hollywood has unions and top stars and directors get points.

Why?

Bullshit lol

wasn't that just last decade?

If Tony and Steve were friends, that's not Apple being cutthroat. Cue: the chapter about poaching from friends in Ben Horowitz's The Hard Thing About Hard Things. If you cross that line and poach from your friends, expect to hear about it. Another example: https://www.reddit.com/r/EntrepreneurRideAlong/comments/1jgz...

It's worse. "Cutthroat" implies being ruthless but legitimate. So-called "poaching" is completely moral and legal, whereas trying to get others not to "poach" "your" employees is immoral and illegal.

There's a bright, clear line between targeted attempts to hire someone who has a job working for a competitor, and trying to get that person to take confidential information with them when they switch jobs. The latter is wrong and will rightfully result in legal action. The former is perfectly fine, and good for employees, which I'd wager still includes most of this site's audience despite the startup-founder focus.

Remember, employers don't own the people who work for them. They cannot be "poached." They can only be given a better offer. If your employee decides they'd be better off working for your competitor instead, then you have only yourself to blame for not giving them enough incentive to stay. Either up your game, or give them a friendly goodbye.

Eh, the kind of poaching OpenAI is accused of doing here is not normal recruiting. It is being claimed that they are giving specific instructions to exfiltrate Apple’s proprietary info & trade secrets.

I know, hence why I pointed out the very important difference between those two things.

I wouldn't describe this as "poaching." What OpenAI is accused of doing is industrial espionage and IP theft. It did this as part of hiring somebody away from another company, which is commonly (and IMO incorrectly) described as "poaching." But the problem isn't the "poaching," it's the theft. If they'd "poached" without the theft it would be fine. If they'd found a way to steal IP without hiring anyone it would still be bad.

I'm no OpenAI apologist here, but I appreciate this perspective. Apple definitely played their timing right for maximum pre-IPO damage. It gives them tremendous negotiating leverage on a possible settlement which could give them a chunk of OpenAI.

> [OpenAI instructing recruits to exfiltrate proprietary data from their current employer] gives them tremendous negotiating leverage

wolves in wolves clothing

how?

OpenAI did not launch any hardware (yet), and I don't think their IPO pricing hinges on them launching an iPhone competitor. To me, it looks like Apple wants to launch a similar AI hardware and is slowing-down the competition to be the first-to-market.

Funny thing: they are barking at the wrong tree here.

The risk is not hardware launch per se. It's the unresolved lawsuit from a powerful company that's hanging over OpenAI and what may be revealed if the case goes to trial and discovery. All that will get priced in by institutional investors. If OpenAI is shopping the IPO, it's likely among the first questions large investors performing due diligence will ask.

The worst scenario is OpenAI tells investors that the risks are low, there's nothing damaging, the costs are immaterial, and tries to push forward. Then the case goes to trial and emails, Slack messages, documents are revealed in discovery that run counter to everything OpenAI told investors. Court issues an injunction, awards damages, OpenAI has to dismiss execs, secondary lawsuits are filed, existing investors release letters they had no idea, underwriter backs out, etc. That outcome could crush an IPO.

I think it's notable that Apple is vague about what was actually stolen and what OpenAI has actually received.

I read into these PR blasts, lawsuits that Apple is sour about losing employees to higher salary opportunities, and is likely using lawsuits instead of higher salaries to retain them.

How is it notable? Apple’s complaint is that these are corporate secrets. If it wasn’t secret, there would be no case.

Also: https://www.cnet.com/tech/tech-industry/apple-google-others-...

> Apple is cutthroat in business too.

Sure. Also, don't care. Lets focus on the devil currently doing harm.

cutthroat vs blatantly breaking the laws and manipulating employees to break laws ...

Jobs had something to prove though. He was kicked out, brought back, he definitely wanted to ensure his legacy. But while I don't agree with it, I think it's harder to be an ethical company that makes it to a billion than a non ethical one. When shareholders are involved you don't have a choice really.. You're obliged to maximize their earnings.

> You're obliged to maximize [shareholder] earnings.

One of the most pernicious and harmful lies of the past 50 years.

Management is obliged to act in shareholders' interests. Executives are paid in stock. Maximizing earnings makes the stock price go up, which makes executives more money personally. So they're happy to let everyone believe they are legally required to make the stock price go up.

There is no law or court precedent making it illegal for management to de-prioritize short-term profit as long as they aren't hurting the shareholders interests and advancing their own.

Yes, but also the "executives are paid in stock" by certain people. If the stock price goes up, of course the executive equity will be worth more, but also if the executives make the certain people happy, the certain people can increase and otherwise adjust the amount of stock. So the stock price can be much about maximizing those very large shareholding certain people. That the price also changes the value of the exec equity is a thing, but the package is straightforwardly modulated as needed whether the price is high or low.

> You're obliged to maximize their earnings.

You're not though, legally anyway. Courts will generally not second-guess a board's business decisions so long as the board acted in "good faith" even if that decision results in loss for shareholders, or does something that does not maximize their returns.

Board just has to link the decision and the long term health of the company. But it's just that, health of the company which is legally distinct from the health or short-term desires of individual shareholders and investors.

Maybe a court won't, but there are lots of examples where activist investors have forced the CEO or board members out with a campaign focused on short(er) term results. And Wallstreet is notorious for only giving a public company 2 quarters to get anything done.

> You're obliged to maximize their earnings.

Sometimes I think it’s time to give shareholder supremacy a rest. If they don’t like what they own, they can sell it. But this is probably also why I’m not on a board of directors.

Interestingly enough, Apple at one point had that attitude even under Cook.

> “When we work on making our devices accessible by the blind, I don’t consider the bloody ROI,” Cook said. “If you want me to do things only for ROI reasons, you should get out of this stock.”

That was back in 2014.

But I do agree, it's time to normalize telling shareholders where they can shove it. If they don't like it, they can sell.

Ironically (and perversely) it's much easier to do this with exotic cap tables that keep voting rights and ownership effectively split. You needed a very valuable company to make this work and the most obvious example (Meta) is not exactly a beacon of corporate governance.

I don’t see how this is the case? The CEO can absolutely tell the board to shove it. The board can’t micromanage the CEO - they don’t have the levers to do that. So their options are few, and pretty much all nuclear along the lines of firing the CEO. Is the Apple board going to fire Tim Cook for making iPhones accessible? If they did, they’d find themselves fired by the shareholders.

> You're obliged to maximize their earnings.

This is not true. Fiduciary responsibility does not mean "maximize earnings". This one fiction has done more damage in the name of unfettered capitalism than anything else.

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