While Google CEO Eric Schmidt was on Apple’s board of directors, the two companies had an agreement not to hire away each other’s workers, a former Google employee with knowledge of such matters has told us. We have since confirmed this with other ex-Googlers. This was not a written agreement, and was considered non-official, but it was well-known and followed within the recruitment division of Google, we’re told.
This news follows a report by The Washington Post in early June that the Justice Department was looking into this very issue. That report cited sources close to the investigation stating that the government was looking for possible antitrust violations among several tech companies, including Google and Apple, with regard to their hiring policies. But that report didn’t say whether or not it was actually taking place. According to our sources, it is.
Or at least, it was. Another interesting element to this is that the main component of this understood agreement between the two companies was Schmidt’s position with each, one source tells us. Now that Schmidt has stepped down from Apple’s board of directors, that agreement may be off, they went on to say. It’s hard to know that for sure until actual hiring starts taking place, but one source says that both Google and Apple have been ramping up their staffing departments recently, presumably to make a bunch of hires.
To be clear, this unwritten agreement was that Google would not go after Apple employees, and vice versa. However, employees of both companies were free to apply to the other company on their own, we’re told. That’s a small, but important difference as the practice of going after other company’s talent, also known as “poaching”, is considered to be an important component of healthy competition in the market. That’s why the Justice Department is looking into it.
While plenty of tech companies have non-compete clauses that would seem to make poaching moot, both Apple and Google are headquartered in California, which is known for not recognizing non-compete portions of contracts.
This news comes amid much controversy between the two companies. The stated reason for Schmidt stepping down was the growing overlap the two companies have on the product side. But the FTC was (and still is) also looking into the overlap between Google and Apple on its board of directors. And more recently the FCC launched an inquiry into the relationship between Google and Apple (and AT&T) on Apple’s App Store. That followed Apple’s rejection of Google’s Google Voice app.
And it goes even deeper. A few months ago, there was a report (written by me, for another publication) that the reason Google didn’t put multi-touch support into its Android mobile operating system was because Apple asked it not to. More recently, Google admitted that it scrapped plans for a Latitude native iPhone app in favor of a web app because, yes, Apple asked it to.
We’ve reached out to both Google and Apple for comment on this latest matter, but have yet to hear back from either. We will update if we do.
Update: We’ve just received an email from a source that would seem to very directly confirm the agreement between Apple and Google in print. We’ve removed the names, a few details that could identify our source, and exact date, but the email was sent in the summer of last year.
From: XXXXX XXXXX <XXXXX@google.com>
Date: XXXXXXX XX, 2008 X:XX:XX AM PDT
Subject: Re: Google Opportunities- Follow up email…
Thanks for getting back to me. I don’t believe that we have been in
contact previously – apologies if I am wrong about this.
From your reference to the [APPLE DIVISION], I take it that you are
currently working there. If this is the case, we will not be able to
proceed with your application. Google has an agreement with Apple
that we will not cold call their staff. If you are not currently
working at Apple and are interested in learning more about [A GOOGLE DIVISION]
please let me know and I would be happy to chat with you.
Thank you again for returning my email.
“Google has an agreement with Apple that we will not cold call their staff.” That would seem to once again confirm that Google was not allowed to poach Apple staff, but implies that they could have talked if it was the Apple employee who initially reached out (which wasn’t the case here).