“Former Palm Inc. Chief Executive Officer Ed Colligan rejected a proposal from Apple Inc.’s Steve Jobs to refrain from hiring each other’s employees two years ago, calling it wrong and ‘likely illegal,’ according to their communications,” Connie “The Vulture” Guglielmo reports for Bloomberg.
MacDailyNews Note: You remember Ed:
We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in. – Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, Nov. 16, 2006
Guglielmo continues, “Colligan, who stepped down as CEO in June, discussed the matter with Jobs in August 2007, as the mobile-phone war heated up, according to the communications. Apple had introduced the iPhone two months earlier, just as Palm hired a former Apple executive, Jon Rubinstein, to develop new smart phones. Jobs, Apple’s CEO, told Colligan he was concerned that Rubinstein was recruiting Apple employees. ‘We must do whatever we can to stop this,’ Jobs said in the communications.”
“The U.S. Justice Department is investigating possible collusion in hiring among technology companies, a person familiar with the probe said in June,” Guglielmo reports. “Derick Mains, a spokesman for Palm, said the company hasn’t been contacted by the Justice Department. Bloomberg News reviewed the communications between Jobs and Colligan.”
“The exact details of what Jobs proposed to Colligan aren’t known; Jobs didn’t mention a proposal in the communications reviewed by Bloomberg. Jobs said Apple had patents and more money than Palm if the companies ended up in a legal fight, according to the communications,” Guglielmo reports.
“Rubinstein was head of Apple’s iPod unit before he left the company in 2006 and had worked with Jobs for more than 15 years,” Guglielmo reports. “Palm hired him as executive chairman in 2007 and he succeeded Colligan, 48, as CEO this year.”
“‘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,’ Colligan said to Jobs, 54, according to the communications,” Guglielmo reports. “Colligan said he thought about Jobs’s proposal and considered offering hiring concessions, before deciding against it, according to the exchanges.”
Guglielmo reports, “Employees are entitled to seek work wherever they want, including at rival firms, said Donald Russell, an antitrust lawyer who worked at the Justice Department for more than two decades before going into private practice in Washington.”
Much more in the full article here.
MacDailyNews Take: We’ve heard talk that Rubinstein’s departure from Apple wasn’t all sunshine and roses. In fact, sunshine and roses were not present at all. Despite the public pronouncements, according to rumors we’ve heard, Rubinstein’s departure from Apple was, uh, let’s say, not-so-amicable. Worse than Fred Anderson’s exit even.
Let’s cut right to the chase: Why is Bloomberg News privy to Palm’s communications and who gave them to Bloomberg News and for what purpose?
Is this the best Palm can do? Is this all they have left? If so, we might be hearing Palm’s death rattle on this lovely Thursday morning.
In our opinion, Palm is headed by vindictive, derivative, scorned little men. Outfits headed by such people usually do not fare very well. Neither do people who get into pissing matches with Steve Jobs.
I’ll wait until I see the actual content of verified instances of communication between Apple and Palm. Until then, it is all just official sounding rumor without substance. I believe the SJ is smart enough not to suggest anything illegal in tangible form.
That report was gathered together by the WaWa Sandwich Man.
It’s not just tech companies. If there is talent and intellectual property involved, companies will regularly take steps to prevent key employees from jumping ships to competitors. Employees will often have to sign strict non-disclosure agreements that include provisions that prevent them from going to competitors. Clients of tech companies also often agree not to hire tech people away from technology consulting firms.
Back in the day, I was working for a company called Digital Equpment Corporation. Digital hired ne away from a company called ARA Services and ARA was pissed. The guy I worked for at ARA was cool though. He smoothed things over. Digital even turned around and leased me back to ARA. Then ironically a job opportunity at Apple came up and Digital threatened to take legal action if I went to work for Apple because at the time I was trying to help get their doomed personal computer line off the ground. Digital just didn’t get personal computers, heh.
These practices are probably much older than silicon valley.
Palm’s Colligan: You’re Soaking In It…
TowerTone (aka Madge),
And it softens hands while you do dishes.
“In our opinion, Palm is headed by vindictive, derivative, scorned little men.”
Sounds like they’re not the only ones, Lol.
Once word spreads, it’ll make Jobs look like he’s insecure and running scared from the little guy Palm. And threatening them with legal battles because they hired your workers away? Who is he, Steve Ballmer?
The past few weeks have been one PR disaster after another for Apple.
It sounds to me like he was asking that they don’t poach each other’s employees, not that they refuse to hire some from Apple who wanted to go to Palm. Is that illegal?
This kind of stuff is just part of life, part of the history of the human species.
Sometimes it works for bad, sometimes it works for good.
Get over it.
@ndelc:
You’re exactly right.
If someone doesn’t want to work for Apple, Jobs doesn’t care. It’s the poaching that’s bad: it makes companies not trust their employees and raises costs for both companies. It’s a war where both lose. (Look at the employee poaching battles between Microsoft and Borland from years ago.)
I believe there also should be concerns about proprietary technology and information being shared. Like Rubinstein knowing how to make a device appear as an iPod inside iTunes. If he used insider information to do that, that should be illegal on Palm’s part.
@R2
What are the PR disasters “the past few weeks” of which you speak?
In the late 70’s and early 80’s, I worked for Nissan Motor at their national h.q. in Torrance, Ca. Honda and Toyotas’ national headquarters were within 5 miles of us.
It was inevitable if you went out for lunch that you would go to a restaurant where a Honda or Toyota employee might also be having lunch. We had orders not to talk to them because we might be accused of some kind of collusion.
IF I happened to know one or more of them, which is possible, there is no way in hell that I am not going to say hello. We had 5000 employees in our office. What are the odds that someone that I talked to would even work for the same department in that respective company? What if we lived on the same street and happened to meet in the park on Saturday?
I realize that this is potentially more serious. But is it really? Common sense and professional courtesy tell me to let a a competitor know that I choose not to try to raid his employees. Whether they do or don’t raid me makes no real difference. If they want to work for me, you can GUARANTEE that they will find a way to get it done.
Sounds like a “conspiracy” in search of someone who needs one to further an agenda.
Most companies – at least in the Tech and Finance sectors – insist that all new employees – from the CEO to the receptionist – sign non-compete agreements. Sign away the right to work for a competing company for anywhere from 6 months to two years after leaving the employ of the company you are joining. Apple doesn’t -DO- this? I’m sure they are painfully aware of the practice!
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Not that they have any REAL competition!
Once again, non-poaching agreements are common and not illegal.
Fred
I wouldn’t want to wash my dishes with what he’s soaking in….
Steve Jobs’ peepee is bigger than Ed Colligan’s.
Apple and its vendors in Colorado Springs area did in fact have an agreement not to hire each others employes in the early 1990s when Apple had a computer factory in the area.
I know this because I worked for one of the vendors and Apple personnel would not talk to me unless I first quit my job with the vendor. When the vendor announced by way of press release that they were going out of business Apple contacted me the very same day to set up an interview for a job in their engineering department. I know of several other cases where similar occurrences happened with agreements between Apple and other companies not to hire each others employes, although people might not like it, this is common practice in the business world and is not illegal. The author of this article is therefore full of crap and is guilty of try to create a tempest in a teapot and should have his journalistic nuggets cut off for lack of research.
@R2:
You are a turd in sheep’s clothing. Go away.
If employees have contracts with their employer, then trying to recruit employees can be inducing people to break a legal contract, which often leads to nasty and expensive civil lawsuits. To avoid those lawsuits, competitors will agree not to recruit people to break their contractual agreements. That’s common sense and not illegal and it can keep protracted and disruptive legal battles to a minimum. I’m sure this was not about lower level employees, but involves key people who are likely under some kind of contract with Apple.
Thing one: no one outside of us Apple watchers will ever even be aware of this. People I know who aren’t tech watchers never hear about things like Jobs’ liver transplant, companies suing Apple over supposed patent or copyright infringements, and so on.
Thing two: MDN is committing a logical error by just pointing out possible motives for why this info might be passed around right now and then dismissing it. Having a motive to say something does not make that thing untrue. In other words, Palm may, in fact, be “headed by vindictive, derivative, scorned little men,” but Steve Jobs may also be culpable of collusion. To what extent that collusion is illegal would have to be decided by authorities who know the law.
I just hope Palm open sources WebOS before they go out of business. WebOS is actually a very good platform with very interesting ideas. Unfortunately, the hardware it runs on is complete crap.
Jobs’ competence in things legal seems rather weak, judging from that recent options backdating issue.
Palm people have reason to be vindictive, as Apple implicated Rubinstein and Anderson (who had to resign) in that.
And, ultimately, Palm is following the Kawasaki rulebook, so…
Every reputable tech firm requires employees to sign nondisclosure agreements to prevent proprietary information being used by competitors. If Jobs was begging Palm to adopt a “nonpoaching agreement” it would demonstrate:
1. Jobs’ fear of losing dissatisfied and/or vengeful employees with critical information.
2. Jobs’ fear of losing necessary talent.
3. Jobs’ fear of competitors gaining and economic advantage.
4.Job’s ignorance of federal antitrust laws and/or risks of collusion.
5. Any combination of the above.
Seems simple and straightforward to me:
“Here’s a little warning shot across your bows Colligan…”
“You recruit our team and you better look to defend yourself against any and all patent thefts…”
Quite right too. Just like Microtheft, Palm are proven not to be able to innovate, so they resort to theft…
To me, this just adds to the long list of unethical actions and standards Jobs has continued to embody. From dumping The Waz, to potentially “poaching” the idea for iTunes from his neighborning company, now defunct, Personics. Apple users have been mislead as to what Apple represents, it doesn’t represent independence, alternative style, etc. but rather one man’s wreckless abandon to climb to the top.