Justice Department Wraps Up Tech-Recruiting Collusion Probe


Tech workers' phones may soon ring a little more frequently with calls from recruiters, as the Department of Justice's year-long probe into no-poach agreements among companies nears an end, according to a report in the Wall Street Journal.

For more than a year, federal antitrust regulators have been conducting an investigation into such technology companies as Google (GOOG), Intel (INTC), Adobe Systems (ADBE), Intuit (INTU) and Apple (AAPL), according to the report. The probe has centered on whether wages have been kept artificially low, as these companies allegedly entered into agreements with each other that carried no-recruit clauses.

Over the course of the investigation, the DOJ stepped back from pursuing some companies that appeared to have a valid reason for their no-recruit clauses, the report said.

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Investigators, however, began drilling down on those cases where they believed the no-recruit clause extended far beyond the parameters of the agreement -- for example, a situation like this: Two companies agree to work closely together to develop a new software application for viewing email, yet add a no-recruit clause not only for their software developers but also for their semiconductor engineers.

The DOJ is concerned that such agreements could harm competition and also reduce employees' ability to obtain new jobs with the highest possible wages, the report notes. And with lower wages come lower operating costs, which could potentially give a company an edge over its competitors.

Regulators, however, would face a challenge in showing how these employees have actually suffered damages as a result of any no-poach agreements, the Journal notes. But in 2001, a federal appeals court upheld a complaint filed by geologists and petroleum engineers against oil companies over colluding and suppressing wages, according to a New York Times article.

According to the Journal report, the companies contend that the absence of such agreements would affect their ability to collaborate, since they are loathe to expose their rock star workers to a company that could swoop down and snatch them away.

While potential settlements with these tech companies are advancing to final stages, the DOJ, during its investigation, found cases of similar agreements involving companies in other industries, the Journal notes. The tech cases might just be the tip of the iceberg.