SALARY SECRETS OF SILICON VALLEY

In 2011, emails between Steve Jobs and Google’s Eric Schmidt show an agreement of plans to avoid competing for each other’s prized engineers. There’s capitalism then there’s corrupt capitalism and this is definitely the latter. Tech workers of the four major companies including Apple, Adobe, Google and Intel filed a class action alleging the companies conspired together to avoid a salary war, essentially capping the market and snuffing out worker’s opportunities.

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Simply put, these four companies all agreed in a ‘silent nodding’ to not bid for one another’s top talent engineers. They all agreed to not poach, cold-canvas or risk starting a salary war which would essentially tip the delicate distribution of talent at the time. Between 2005 and 2011, these four companies were all in high growth positions with Adobe pushing for Creative Cloud, Google with their various mergers and Apple pushing the envelope with the iPad development.

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Emails have proven that Google’s Eric Schmidt and Steve Jobs had an agreed territorial border between talent acquisition. Unfortunately for Schmidt, a HR employee of Google at the time unknowingly defied corporate orders and began cold canvassing Apple employees. Jobs then caught wind of the Google recruiter soliciting one of Apple’s employee’s which led to Schmidt apologizing and reassuring Job’s that the HR recruiter would be fired and in turn Jobs replied with an ASCII smileface though email. =)

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Federal Judge Lucy Koh ordered the four companies to pay $324 million to settle the salary conspiracy case, chump change at most. The tech firms admitted they had a non-complete agreement over recruitment but denied it affected salaries and drove down wages (sure). In 2010 Google, Apple, Intel and Adobe all agreed to drop their non-complete ‘agreements’. Since then, it’s anyone’s game if you want the best of the best and who knows what’s in place now between these four big corners of the tech market.

Mr. Jobs even tried to warn Palm’s Chief Executive Edward Colligan at the time who callously replied with “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal.” The companies agreed to settle for $324 million which analysts say could of easily skyrocketed to $9 Billion had they not avoided the lawsuits.

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