No Solicitation Agreements: A Threat to Employee Freedom
WASHINGTON — In a shocking revelation, six high technology companies – Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar – were caught engaging in anti-competitive practices, depriving employees of their right to seek better job opportunities. The Justice Department announced today that it has reached a settlement with the companies, forcing them to stop entering into no solicitation agreements.
According to the complaint, the companies entered into agreements that restrained competition between them for highly skilled employees. The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees. An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees.
“The agreements challenged here restrained competition for affected employees without any procompetitive justification and distorted the competitive process,” said Molly S. Boast, Deputy Assistant Attorney General in the Antitrust Division. “The proposed settlement resolves the department’s antitrust concerns with regard to these no solicitation agreements.”
In the high technology sector, there is a strong demand for employees with advanced or specialized skills. One of the principal means by which high tech companies recruit these types of employees is to solicit them directly from other companies in a process referred to as, “cold calling.” This form of competition, when unrestrained, results in better career opportunities.
According to the complaint, the companies engaged in a practice of agreeing not to cold call any employee at the other company. The complaint indicates that the agreements were formed and actively managed by senior executives of these companies.
The Justice Department’s Antitrust Division filed a civil antitrust complaint today in U.S. District Court for the District of Columbia, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.
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Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release ↗
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