Steve Jobs threatened patent suit to enforce no-hire policy: filing | Hacker News Reader

Steve Jobs threatened patent suit to enforce no-hire policy: filing

reuters.com

168 pointsarpit78 comments

I love how this no-poaching debacle really shines a light on the hypocrisy of some much beloved tech mega-corps.

Google and Apple execs may shower employees with perks, but at the end of the day, top execs still treat most of their labor like a statistic to be optimized and exploited for maximum value rather than human beings. The only difference is some of the tech companies have realized that happy employees are good employees.

Which I guess is progress. But what i'd really like to see more common decency and respect of the rank and file employee by senior management.

Colluding to not hire employees of your friends company is extremely disrespectful because it means lower employee wages over-all, and it's using the dominant position of an employer to limit the options/free-will of your employee to protect their own profits.

> The only difference is some of the tech companies have realized that happy employees are good employees.

I wonder if it's even that positive, or they've just realized that, in the current Valley employment climate where many people have alternative employment options, happy employees are the only not-quitting employees.

A free muffin or breakfast sandwich shouldn't offset a bad salary.

> Google and Apple execs may shower employees with perks

On some level this is designed to make it easier for you to be at work longer. Why add an extra 30 minutes to your lunch break by driving off site when the cafeteria(s) can give you the same options/quality (and are free in some cases)? Need to leave at 5 to make it to your dry cleaner before it closes? Don't worry... we have in house dry cleaning.

They gave us 10% raises in the name of retention. This also happened right around the time they killed the no-poaching policies. That sounds like the kind of insurance they needed now that the no-poaching policies were gone.

Come on, lawyers, someone prove that this cost us all 10% of our salaries for the duration of the agreements. Then have them do the numbers and cough up that much money they didn't pay us because we magically weren't being wooed by these other companies. I could stand to make quite a bit from this, and a bunch of my friends could, too.

It's more than 10% that it has cost us. There are a lot of ripple effects and multipliers, not only related to pay, but also to working conditions, autonomy, and quality of work.

That said, in the long term, the companies that engage in these collusions lose because non-participants have a larger talent pool. Cartels like that are only stable if they can muscle out or absorb non-participants, and it seems unlikely for technology employment.

More onerous is the collusion among VCs, both on the discussion of terms, and in their tendency to think as a group about who they like and who they don't.

Doesn't the same reasoning apply to VC's? Are there any huge barriers to entry the VC market that I'm not seeing?

It seems to me that most VCs want to become part of the club that already exists, not compete with it. This is probably coming out of the assumption that the most well-known VCs get the best deals. I don't know how accurate that is.

I wish this point was raised more in the fawning articles about how great a place Google is to work, and how generous the 10% raise was, e.g. http://www.slate.com/articles/technology/technology/2013/01/...

Finally, here's his true color. "Don't do this or I will sue you" is the most unimaginative, terrible, desperate statement one could make to enforce their unfair superiority over others, especially given the fact that this person was known to be a lot more creative and intelligent otherwise.

The other side of the coin are comments like this. "Finally, a new narrative!" This is just as lame as those that canonize him outside of his direct accomplishments. Steve Jobs had two MAJOR successes (Pixar and Apple). He was highly competitive and did aggressively oppressive things and had moments of integrity. I just wish everyone would stop trying to color his biography like they had to write a movie synopsis of his life in a a sentence.

Id argue that is the real lesson here. Be OK with being inconsistent relative to circumstance, if you believe that all great men held firm to their "codes" then you will fail in your emulation of greatness.

TL;DR Life's messy, people can't be summed up in a characteristic , Steve Jobs was a dick and a hero.

The problem I have with this analysis is that there's an implied justification for being a dick as long as you're successful in the end. Too many people have taken this as the lesson of Steve Jobs.

Who's trying to justify their dickishness with the example of Steve Jobs?

I meet people all the time that think that stepping into his shoes is just a matter of being a total douche to everybody.

I've worked for people who have cited him as an excuse for bad decisions and obnoxious handling of other people.

Fake Steve Jobs's are a plague. They assume that they've already got the vision and creativity (often they don't, but every narcissist thinks that of himself) so the only thing they need to do in order to have that level of success (and admiration) is copy the bad parts of his personality... which is, quite frankly, ridiculous.

What they don't seem to realize is that Steve Jobs emerged in one time and environment that no longer exist. The opportunities that were available to a 20-year-old in 1975 in Northern California don't exist anymore. They're somewhere, but real opportunities are never visible (as such) at the time, so there's a huge amount of luck involved.

I have a hard time finding anything heroic in this.

He was a great artist, sure.

He was a great businessman, sure.

He also had crappy morals and did not mind stepping on people to achieve his goals. That including claiming "ownership" to ideas and concept created eons ago, and being abusive on the market. Sure, peoples lives are messy, but it doesn't justify bad behavior. And, bad behavior, bad morals, should not be lifted up as attributes of an hero.

Yes and no. Your post makes it seem like this is the first time anyone has heard of Steve Jobs threatening to sue.

Apple sued Microsoft over Windows, then got Microsoft to invest and commit Office to Macintosh for 5 years + $150 million to settle litigation between the two companies.

Jobs threatened to sue former CEO of Sun over a prototype desktop environment[1]

[1] http://jonathanischwartz.wordpress.com/2010/03/09/good-artis...

This is unfortunately a side effect of living in a world where software and software ideas can be patented. It is a shame that Steve Jobs resorted to this kind of bullying to get what he wanted though. Seems very childish but pretty in-step with how he was portrayed in his biography.

    Apple sued Microsoft over Windows, then got
    Microsoft to invest and commit Office to Macintosh
    for 5 years + $150 million to settle litigation
    between the two companies.

It was more than that. Apple was seen as the only 'credible' competition to Microsoft in the OS space. If Apple went under, Microsoft was absolutely going to get smacked with an antitrust lawsuit by the government. As it works out, they did anyway, but I think that a $150mm deal on non-voting shares (which were later resold at a profit) was seen as a no-brainer sort of move.

See here for more. All of Silicon Valley was in on this. http://www.theverge.com/2013/1/23/3906310/the-no-hire-paper-...

Those were surprisingly shocking to see. I never imagined high-level CEOs would actually put things like this on paper.

Just a reminder to yourself that everything you do as a CEO has to be able to survive public scrutiny...

I never imagined high-level CEOs would actually put things like this on paper.

Seriously, isn't that one of the first rules of illegal activity? And many of them went to school for white-collar crime; the rest of us had to learn that stuff on our own!

This isn't about any single individual, though he certainly did not contribute positively to the situation.

Schmidt's response was no better. Are we to imagine he would not have sent the same sternly worded memo to Jobs had the roles been reversed?

IIRC this report fits in with earlier stories which reported that Jobs was active in pushing for no-hire agreements to be set up in the first place. That does make him look worse than Schmidt, who afaik hasn't (yet?) been revealed as an initiator. Though neither man looks like an oil painting now.

It doesn't get any more basic than this. People think there is some secret to running a business, like great leadership or being smart or visionary. The sick reality is that people simply gain power and use it against their opponents, like machines. All those business books like 7 habits, how to win friends, etc need to be thrown away. Here we have what many, many people considered the most successful business man of recent history, simply threatening people like a dumb animal. The whole world is overthinking business.

Saying something like this is akin to saying that the whole world is overthinking biking and all those tips on endurance training are irrelevant because Lance Armstrong was using drugs.

All those books tips are still useful if you want to become a better businessman.

>People think there is some secret to running a business...the most successful business man of recent history, simply threatening people like a dumb animal.

Except that having business skill is a necessary condition to getting to a position where you can leverage your power.

It's unfortunate that these execs won't get prison time for this, and that Jobs wont be tried and sentenced posthumously.

Yet downloading unprotected email addresses is worth up to 10 years, and downloading academic journals is worth up to 35.

Really, which of these things is more damaging?

Oh good, let's compare yet another unrelated thing to aaronsw.

Well... The nature of the crime is unrelated, perhaps. But the measuring scale, so to speak, is the same: length of incarceration. So from the point of view of the measuring instrument, it is comparable, and the comparison makes sense.

Prison time? You do realize these actions are not necessarily illegal (nor immoral) and the corporation would liable, not necessarily the individuals?

Trying to stop poaching is standard practice. When it becomes too widespread, Uncle Sam steps in.

When the bankers that blew up the global economy in 2008 just got bonuses cut, what makes you think THIS of all things would be criminal?

It seems clear to me that he is asserting the laws are wrong, not that they broke the laws that would get that sort of punishment.

Sure, I'm asserting that the laws aren't even wrong, let alone would they ever be changed in the direction the OP wants. I don't think it is credible to claim these actions are criminally damaging. I don't think copyright infringement is criminally damaging either, mind you, but that's somewhat off topic.

The DoJ did not share your perspective, nor I think do most people.

Um, where has the DOJ tried to lock up executives for preventing poaching?

Your understanding of "most people" may be limited. Keep in mind you live in a politically polarized country.

Did I say the DOJ thought they were to be locked up? Are you being deliberately obtuse?

From the OP: "It's unfortunate that these execs won't get prison time for this"

The flow went like this: I suggested that this was not illegal or immoral, so not deserving of prison time. You suggested that the OP meant that the laws are wrong. I said that they're not wrong, nor would any changes to them that incarcerated executives for anti-competitive practices likely ever be put into law. You suggested the DOJ disagreed with me, as do most people.

I don't think I'm being obtuse, but perhaps I just have a very different perspective on this.

> I suggested that this was not illegal or immoral

> You suggested the DOJ disagreed with me, as do most people.

As evidenced by the fact that there was an investigation.

The DOJ was investigating antitrust concerns, which is a civil matter (and a rather controversial area of the law).

The OP was discussing the criminal liability of corporations and their officers. That's a huge difference.

I am well aware.

This does not change that pretty much everyone here but you thinks this was a bunch of crooked shit.

Given by the upvote/downvote ratio on my recent posts, I don't think that's clear cut.

I do think the visible reaction is fascinating given this is a site dedicated to growing businesses that almost certainly will conduct such practices (completely legally, too).

It's also a criminal matter, but that has nothing to do with my original post. It's certainly not "completely legal".

The penalties for violating the Sherman Act can be severe. Although most enforcement actions are civil, the Sherman Act is also a criminal law, and individuals and businesses that violate it may be prosecuted by the Department of Justice. Criminal prosecutions are typically limited to intentional and clear violations such as when competitors fix prices or rig bids. The Sherman Act imposes criminal penalties of up to $100 million for a corporation and $1 million for an individual, along with up to 10 years in prison.

Anyway, the other poster was correct. If they don't go to prison over this, the laws are wrong ;) And yes, of course I'm aware that they won't. That's exactly what I was lamenting.

Ok, fair point.

I'll just note that antitrust law is rather controversial, and is often enforced on purely political grounds. You'll recall Microsoft's (non) punishment after the last Republican administration was elected, for example.

> "Schmidt responded that he preferred it be shared 'verbally, since I don't want to create a paper trail over which we can be sued later?'" he said, according to the court filing. The HR director agreed.

https://www.youtube.com/watch?v=hGo5bxWy21g&t=78s

Great scene.

Eric Schmidt also had the recruiter terminated as a "public example".

http://cdn3.sbnation.com/entry_photo_images/7564645/google4_...

"In 2010, Google, Apple, Adobe Systems Inc, Intel, Intuit Inc and Walt Disney Co's Pixar unit agreed to a settlement of a U.S. Justice Department probe that bars them from agreeing to refrain from poaching each other's employees."

How do you check that the companies are not still colluding? Is there some background level of 'poaching' the DoJ expects? Confusing.

Whistleblowers

I could tell a few stories about what happens when you engage in whistleblowing. Ex-managers try to fuck up future jobs, for one.

Whistleblowers are great for society, but I wouldn't advise it as a career move. Not unless you have your career set up (book deals, influential friends) already.

I have always wondered why this was not taken by the DOJ actively without a filing required from tech workers. This incident was widely reported in the media and the law system should have just pre-empted this situation. In the Swartz case, the prosecution pursued even after JSTOR dropped the charges. Why can't the same be done in this case?

Because this is a civil suit so the DoJ has no jurisdiction over it.

If the DOJ takes it over it can easily be a "non-civil" suit. It is "civil" because the tech members decided to file a case. Even if the tech members did not file the case - the DOJ (or any other appropriate organization) should have picked it up to champion fair employment policies. You don't always require a common man to be the plaintiff. The government (or any other appropriate organization) can themselves be the plaintiff just like the Swartz case. This clearly highlights the inconsistencies in the legal system.

What criminal law are you saying was broken?

Wasn't there a breach of fair employment practices? If the OP is true, it essentially means you can't move over from Google to Apple. Why should that be the case?

That's not what it means. The agreement was that e.g. recruiters from Apple would not actively attempt to recruit Google employees, i.e. solicit them. They couldn't really prevent a Google employee from applying for a job at Apple though if they're the one to initiate it. (What are they going to do, ask "Do you still work at Google, or did you recently quit? Still there? Sorry we can't interview you in that case."?)

I get your but point Point No. 6 in the Colligan affidavit says a different version -

    Mr. Jobs proposed an arrangement between Palm and Apple 
    by which neither company would hire the others' employees.

http://www.scribd.com/doc/121737673/Colligan-Affidavit

Note - there is no version of "active" or "non active" in the statement. It simply says no hiring ex-Palm/Apple employees. I simply see no reason why this should exist. Why should there be a collusion between company X and Y on a legal platform ?

"Why should this be the case?" is a far cry from "this is criminal."

You can call it whatever you want to - what name do you prefer?

I think these practices show a total lack of respect from these companies (in this case Apple) to their own employees, it's shameful.

Both, frankly. The public punishment google meted out to their own staff was a classless act as well.

Here's a link to the actual filing:

http://www.scribd.com/doc/121737673/Colligan-Affidavit

Quite illuminating.

It's certainly interesting to look back at these events from our current vantage point. In particular, how 3 companies conducted themselves at the time - and where they are now (Apple, Google, Palm).

This is correlation, and not necessarily causal. However, it's rather bitter sweet to think about nonetheless.

What is no-hire policy? Can someone explain it please?

The first paragraph mentions that it was to dissuade Palm from hiring employees from Apple. This is obviously a transaction against the interests of employees, yet outside their control and possibly even their view (you might get rejected for a job at Palm without ever knowing why).

Essentially both companies agree not to hire anyone from the other company. This is considered illegal in the States.

It's a conspiracy to suppress the labor market. If you are an employee at a tech company and are being underpaid, you can't go to another employer for your market salary, because there is a secret agreement for them to ignore your job application.

Even if you are not underpaid, but you simply want a change (maybe you always wanted to work at Google, and an opportunity arises) your resume gets black-holed because Apple "owns" you.

The end result is your engineers have restricted mobility, and you don't have to pay them what they're worth. It's very similar to price fixing, but with humans and their ability to earn a living.

Many tech companies were part of this conspiracy willingly, and Jobs threatened to sue the less willing companies using Apple's patent portfolio war-chest if they didn't agree to his demands.

Edit: Let it be known that Ed Colligan is a class act. See his response to Jobs here:

http://www.scribd.com/doc/121737673/Colligan-Affidavit

I can't believe he had the nerve to go on the record after being specifically told what he was planning was illegal once again on public record and then re-iterate his original threat. So not only the no hire thing, but basically extortion to get Palm to comply?

Any last shred of respect I had for the guy just evaporated.

Some of the agreements were more limited (and more sneaky) than that. For example (going by the evidence of the Adobe no-hire list) Adobe's no-hire agreement with Apple was "Do not pro-actively solicit candidates from Apple. However, if a candidate from this company applies to a position, you can pursue." and many of its other agreements were of that nature. It still sucks for you if you were (say) a SAP employee who could have had a better job at Adobe but weren't unhappy or ambitious (or suspicious) enough to be sending out your resume.

Is it telling that the only company in this mess that had any principles (Palm) is the only one that couldn't make it in the long run? Maybe I am just reading too much into that.

It might of been their position too. If palm was top dog, would they be acting similarly?

If other economic sectors were as free from regulation as the computer industry, business would be mostly booming in those sectors as well. One of the things those businesses would want is more technical employees.

In that predominantly free market, anti-poaching agreements wouldn't be effective, because it isn't possible for any single enterprise to forge agreements of this kind with more than a handfull of its peers at a time.

Don't believe me? Banking and medicine are two of the most heavily regulated industries in the US. And it's why, given the choice of working for Kaiser Permanente, Bank of America, Apple, or Google, any one of us would choose Apple or Google over the other two.

After the Palm CEO refused to collude: "This is not satisfactory to Apple...My advice is to take a look at our patent portfolio before you make a final decision here. Steve"

Wow.

Wow, that is beyond evil.

"[Eric] Schmidt responded that he preferred it be shared 'verbally, since I don't want to create a paper trail over which we can be sued later?'"

"Mr. Jobs also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple's many patents,"

So much for being a country of laws. Was any of these execs ever prosecuted or suffered a penny in fines for this? Sure conspiracy to do something illegal is illegal

Isn't this filing part of a legal process intended to do just that (i.e. appropriately penalize the companies behind this collusive scheme)?

The problem is that by punishing companies and rewarding individuals, you tend to create an incentive for individuals to break the law (the risk/reward, on a personal level, gets skewed). In cases like this it's arguable that the individuals involved should be prosecuted.

Google and Apple have close to $200 Billion in cash, so a even a "substantial" penalty to them is like taking a quarter out of my pocket. Put a few execs in jail and see how fast it stops.

At least Steve Jobs knew what the patent system was actually for.

I somehow understand that Jobs would be angry when Palm started hiring all those people from the iPod team, especially at a time when Apple was stealthily working on the iPhone.

As much as I despise patent litigation, I can understand Jobs' point of view: when so many people change from one company to another, a lot of knowledge will go with them. One could interpret Jobs' threat of just a means to protect Apple's intellectual property. To ensure that Palm doesn't use stuff that Rubinstein et al developed at Apple.

It's not like Jobs hired all of his workers fresh out of college. Where do you think they all came from before they got to Apple?

It's just far cheaper to threaten other companies than to keep your workers happy. It's not like there aren't legitimate ways to retain your people.

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