collusion

In early 2005, as demand for Silicon Valley engineers began booming, Apple’s Steve Jobs sealed a secret and illegal pact with Google’s Eric Schmidt to artificially push their workers wages lower by agreeing not to recruit each other’s employees, sharing wage scale information, and punishing violators.

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
— Adam Smith, The Wealth of Nations, 1776

This reminds me that a previous employer of mine had tried — with two other very large tech-related firms in the area — to more-or-less collude on hiring staff, under the guise of better workload management. The theory went that since the resource demands of each of the three didn’t match up very well, that they could simply share staff between each other, moving the resources to where the workload was. As I understand it, the plan was scotched when legal advice intimated that the obvious side effect of suppressing competition for employees was almost certainly illegal.

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