In a free market and capitalist economy, it is generally accepted that competition is good for the market, and helps drive innovation. When major players—who are supposed to be competitors—end up circumventing laws such as the Sherman Antitrust Act and the Clayton Antitrust Act, not only does it violate one of the central characteristics of capitalism, it can be a painful reminder of the “old world” monopolistic tendencies that were the original impetus for the enactment of those very laws. Mounting evidence seems to indicate that a group of technology giants had been conspiring together to manipulate salary patterns and shortchange their workers for a number of years. Emails and paper trails from top officials at Apple, Adobe, Google, Intel, Intuit, Lucasfilm and Pixar have surfaced, revealing a series of covert bilateral no-poaching agreements that allegedly kept down salary levels of about 100,000 hi-tech employees.These discoveries first came to light as a result of a larger Department of Justice antitrust investigation back in 2010. According to the court papers filed this past October (prior to last month’s denial of the defendants’ appeal to toss out the "manifestly erroneous" class-action suit), not only did the secret pacts artificially drive down employee compensation, but they also constricted employees’ mobility by “eliminating competition for skilled labor.”
The argument could be made that the do-not-call arrangements existed as a means to prevent the disruption to major projects that can occur when there is frequent turnover in staffing. Furthermore, in the cutthroat industry of technological development, there is the paradoxical coexistence of “what are my competitors up to?” curiosity alongside the keep-it-close-to-the-chest fear that someone else will steal your ideas and get it to market first. It’s natural for companies to want to protect their standings in the rat race however they can. But healthy competition is difficult when “cross-pollination” of the workforce is suppressed and specific information about the job market is systematically kept hush-hush. Whatever the actual objective in this case was, it is estimated that the no-poaching collusion between these hi-tech giants ultimately deprived their workers of approximately $9 billion in wages.
In theory, this could have had ripple effects beyond Silicon Valley, as well. If developers, engineers, programmers, and other hi-tech employees had been earning higher wages in California, that might have incentivized companies in other areas of the country to raise their salaries for comparable positions so as to keep their local talent from migrating westward. As such, more than just those intimately involved in this case may be tuning in, come May 27th of this year, when the jury trial is set to begin.
The argument could be made that the do-not-call arrangements existed as a means to prevent the disruption to major projects that can occur when there is frequent turnover in staffing. Furthermore, in the cutthroat industry of technological development, there is the paradoxical coexistence of “what are my competitors up to?” curiosity alongside the keep-it-close-to-the-chest fear that someone else will steal your ideas and get it to market first. It’s natural for companies to want to protect their standings in the rat race however they can. But healthy competition is difficult when “cross-pollination” of the workforce is suppressed and specific information about the job market is systematically kept hush-hush. Whatever the actual objective in this case was, it is estimated that the no-poaching collusion between these hi-tech giants ultimately deprived their workers of approximately $9 billion in wages.
In theory, this could have had ripple effects beyond Silicon Valley, as well. If developers, engineers, programmers, and other hi-tech employees had been earning higher wages in California, that might have incentivized companies in other areas of the country to raise their salaries for comparable positions so as to keep their local talent from migrating westward. As such, more than just those intimately involved in this case may be tuning in, come May 27th of this year, when the jury trial is set to begin.