The U.S. Stops Silicon Valley's 'No Poaching' Deals. . . a Few Years Too Late

DOJ Stops Silicon Valley's 'No Poaching' Deals
DOJ Stops Silicon Valley's 'No Poaching' Deals

Here's a case of settling on the price of a horse after the sucker has jumped the fence: On Friday, the Department of Justice announced that it had reached a settlement with six tech giants over unfair recruiting practices. The DOJ had alleged Google (GOOG), Apple (AAPL), Intel (INTC) and others had agreed not to poach top employees from each other. The feds viewed this as an anticompetitive practice and potentially a violation of antitrust laws. This may have been the case in the tech world, two or three years ago.

But anyone on the ground in Silicon Valley knows that a full-blown war for talent is under way, with checkbooks blazing. TechCrunch reported that Facebook is aggressively competing for Google employees. Oracle (ORCL) CEO Larry Ellison recently signed up Mark Hurd after the former Hewlett-Packard (HPQ) CEO settled on a severance package. In the meantime, both Facebook and Google have been buying early-stage startups as a means to stock up on critical engineering talent.

The struggle to bring in and keep talent has become even more pronounced with a number of big-ticket IPOs looming, the top three being Facebook, social-gaming giant Zynga and business social-networking titan LinkedIn. At this point, stock in those companies is almost viewed as currency, and option awards akin to slam dunks when compared to performance-related bonuses or other means of compensation.

Everybody Is Competing Against Everybody

Further, the ongoing shifts in the technology world have heightened the sense of competition between big players, with Apple, Facebook and Google all competing over mobile advertising, Google and Apple competing in smartphones, operating systems and browsers, Twitter, Facebook and Google are overlapping on mobile messaging and stream updates, and Microsoft-Yahoo is pushing the Bing search engine hard to take an extended run at Google.

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With everyone competing against everyone else in just about everything, adherence to any sort of anti-poaching regime is not only harder to justify internally, but also runs counter to the external priority of showing that your company is constantly upping its game. The wheels of justice have always turned slowly: That appears to hold doubly true in the high-speed, ever-changing environment of Silicon Valley.