Engineers Allege Hiring Collusion in Silicon Valley

[groundloop]

Source: NY Times

Tech companies love new ideas, unless they belong to someone else. Then any breakthroughs must be neutralized or bought. Silicon Valley executives know all too well that a competitor’s unchecked innovation can quickly topple the mightiest tech titan.

Just how far Silicon Valley will go to remove such risks is at the heart of a class-action lawsuit that accuses industry executives of agreeing between 2005 and 2009 not to poach one another’s employees. Headed to trial in San Jose this spring, the case involves 64,000 programmers and seeks billions of dollars in damages. Its mastermind, court papers say, was the executive who was the most successful, most innovative and most concerned about competition of all — Steve Jobs.

.........

“These are the engineers building the hardware and software that are the lifeblood of the technology industry,” Mr. Saveri said. “But they were prevented from being able to freely negotiate what their skills are worth.”

The actions described in the suit were first uncovered in an investigation by the Justice Department, which concluded with an antitrust complaint against a half-dozen companies. In a simultaneous settlement, the companies agreed to drop the no-poaching practice. The settlement did not preclude the programmers from pursuing their own case against the companies, and the class-action lawsuit quotes emails and other communications from some of Silicon Valley’s biggest names.

Read more: http://www.nytimes.com/2014/03/01/technology/engineers-allege-hiring-collusion-in-silicon-valley.html?nl=todaysheadlines&emc=edit_th_20140301&_r=0

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Yet more evidence that ultra rich executives and owners screw the people below them to enrich themselves.

[riderinthestorm]

1. I completely believe this. Not sure why but it rings "true" to me that it happened

The IT world has been "gaming the system" for a long time - from H1B visas, to offshoring manufacture of chips etc.

I have no trouble believing Jobs (and Gates et al) thought they could get away with collusion on scamming programmers and engineers as well.

[groundloop]

2. I sat in a meeting where managers talked about ways to keep engineers from being poached....

NOT ONE TIME did anyone in management mention better pay. Well duhhhhh..... why do we leave our comfortable homes every morning anyway - to earn money so we can feed our families etc. etc. If they'd pay us enough we might not be so quick to return calls to headhunters.

[loudsue]

3. Capitalism is only for the big dogs....the rest of us have no right to get our piece of the pie.

Capitalism needs to be heavily heavily heavily regulated to work....and we're going in the WRONG direction for that.

[kristopher]

15. +1

[MannyGoldstein]

5. Same here.

I brought up the concept of raising salaries to be comparable to similar employers... the looks I got...

[hootinholler]

4. Even before the H1B visa program

Programmers as a trade are considered exempt for overtime by FLSA. The only trade class I am aware of mentioned in the law.

[Igel]

11. Sure. It's been reported before.

And it makes sense.

Much of the technology involved is intellectual. You hire an engineer and you have to teach him the technology. It's part of his toolkit. It's the same with a lot of engineering practices.

Now, if you're a mechanical engineer and you take a patent with you (in your head, in your toolkit) and use it, you sell copies of a machine that people can see and say, "Ah, you've stolen my patent."

Try that with software. You move to another company with that patent or trade secret in your head and you can command big bucks, until you've shared the secret at the new place. Code's written, the technology's used, and unless it's clearly visible after compiling few will ever know about the patent or copyright infringement. Even if you uncompile the code, you're stuck having to pay people a lot of money to scrutinize and spot the infringement in the code.

Now consider something like Microsoft, which has a lot of people trying to find hooks into its software so make sure that their software is compatible with or can substitute for yours. Then it's not *copying* the code that can lead to problems, it's just knowing how the code works well enough to be able to interact with MS products, etc.

This, of course, includes when MS wants to pick up on competitors' secrets and outdo them or incorporate them.

Non-competition works best. It helps stability for a company's workforce, it reduces the temptation for an engineer to do something illegal for big $ and probably get away with it. It keeps MS from being pulled apart, but can also keep MS from easily pirating smaller products' lines as easily.

At the same time it's illegal. One of those cases where in principle you're against it, but you realize that the outcome is likely to be worse and lead to people jumping ship so they can say, "Hey, I got mine!"

[riderinthestorm]

13. Yes but the workers don't stand a chance then of being fairly compensated

The outcome IS worse for the people who may have been able to shop their talents around for higher salaries but were prohibited because all the top guys were in on rigging the system against them.

Along with the H1B visa push it makes me think this is still more about enriching the top guys at the expense of their workers. This seems like direct proof of the complaints I've read on DU forever.



Correct me if I'm misinterpreting this. I'm happy to learn. It just looks bad to me.

[kristopher]

17. Couldn't employers use non-competitor clauses in contracts?

I'm not familiar with the industry, but a clause forbidding the IT engineer from working on the same type of projects for a specified period would seem to be a legal way to handle the problem. It might not be perfect or the most effective from the employers' viewpoint, but it isn't as if they are totally lacking in tools other than creating wageslaves.

[groundloop]

18. Non-compete agreements are common, at least in my field

However, if companies paid technical talent what they're worth they wouldn't need to worry so much about employees jumping ship. The millions upon millions of dollars paid to overpriced executives could go a long way to keeping engineers and programmers happy.

[kristopher]

20. I'm not arguing against higher salaries

I'm arguing against the attempt to justify the collusion using 'theft of intellectual property' as a rationale.

In fact, even though I'm not affected, one of my real pet peeves is the H1b visa program. In my opinion it's one of the most in-your-face example of corporate control of government I've ever seen. Especially considering the way it's been handled since the economy collapsed.

[Sanity Claws]

23. Noncompetes are not enforced in California

Here is a quick cite for you. http://www.venable.com/enforcing-non-compete-provisions-in-california-01-13-2012/

[sendero]

21. Your story is all well and good (not)....

...... but there is a problem. THIS COLLUSION IS ILLEGAL, PERIOD END OF STORY.

[BodieTown]

6. Count Me In

Here's a telling paragraph from the NY Times article:

The Justice Department ... concluded in ... an antitrust complaint against Apple, Google, Intel, Intuit, Adobe and Pixar. There were no financial sanctions.

Are there ever consequences for the overpaid CEOs who agree to these secret handshake deals that effectively harm the very people who make them rich?

No. Never.

I received my packet in the mail, and of course I'll be joining the lawsuit.

Most people only see the goodness and glory of having these corporations in their own backyards, providing jobs and nice homes.

Most people ignore the fact that these corporations usually don't pay their fair share of taxes, they engage in dictatorial (present and future) control over employees, and they were instrumental in triggering the middle-class war in the United States (driving down wages by exporting jobs and importing cheap labor)...and they know it.

[pragmatic_dem]

7. because, companies need engineers long enough to train their replacements in India...

India doesn't have any problem with poaching people and technology.

[Thor_MN]

8. The best manager I ever worked for had a saying.

"Do we want to be the farm team for the big leagues?"

His incoming goal was to make the wages to be at least equal to the median wages in the region.

He was drummed out of the company in less than 6 months

[LittleGirl]

9. saw this illegal crap first hand

I haven't worked in the IT field for 7 yrs because of my personal situation, but before that...I lived it. I saw engineers come from India and work with our programmers and could not believe it. Don't even get me started on how I was treated...one of the few females in the department.

[groundloop]

10. Another way they keep salaries down is make it taboo to reveal your salary to co-workers

As long as I can remember it's always been a big no-no to talk about salaries with co-workers, the rationale has always been that it will do nothing but make for an unhappy work environment. Well hell, I don't think too many people are blind to the fact that this is another tool management uses to screw their technical employees.

[adieu]

16. Of course

look what happened in professional sports. As soon as salaries were made public, they went up through the roof. Public knowledge of salaries is the best way for workers to get better pay.

[TygrBright]

12. But, but... the Free Market! Invisible Hand! Job Creators! :sarcasm: n/t

[Crowman1979]

14. Why haven't the workers in Hi-tech unionized?

I'm perplexed how those with the most skill don't use the power of forming a union chapter to their advantage?

[groundloop]

19. Some engineers are represented, at Boeing for instance.... however

Most engineers are pretty intimidated when it comes to doing anything that would displease their employer (and forming a union would definitely fall into that category). The instant management got wind of talk about a union the engineers involved would be out on their ass, and management wouldn't have much trouble covering their tracks.

[Demeter]

22. I'm SO glad you asked that question!

When I worked for Raytheon

(mea culpa...there were no jobs in engineering in NE in 1976, and I refused to live in California)

the technicians were unionized, but the engineers had their noses so lifted by their college degrees (even if not from MIT or the like) that they refused to lower themselves to collective bargaining.

(I'd hate to think what management would have done, in the event snobbishness failed).