Steve Jobs threatened patent litigation if Palm wouldn’t agree to stop hiring Apple employees, says former Palm CEO Edward Colligan in a statement dated August 7th, 2012. The allegation is backed up by a trove of recently-released evidence that shows just how deeply Silicon Valley's no-hire agreements pervaded in the mid-2000s. Apple, Google, Intel, and others are the focus of a civil lawsuit into the "gentleman’s agreements," in which affected employees are fighting for class action status and damages from resulting lost wages, potentially reaching into the hundreds of millions of dollars.
"I'm sure you realize the asymmetry in the financial resources of our respective companies."
In his statement, Colligan says he received a call from Jobs in August of 2007, expressing concern about Palm’s hiring of Apple employees. He goes on to say that Jobs "proposed an arrangement between Palm and Apple" that would stop the practice, also suggesting that "if Palm did not agree to such an agreement, Palm could face lawsuits alleging infringement of Apple’s many patents." Colligan later responded in an email, suggesting that any such agreement would likely be illegal and that Palm had patents of its own that it could use to countersue. Jobs replied, writing, "I’m sure you realize the asymmetry in the financial resources of our respective companies when you say: ‘We will both just end up paying a lot of lawyers a lot of money.’"
"Make a public example of this termination within the group."
Palm wasn't the only target of Jobs's indignation. Google emails reveal the beginnings of the Apple CEO's "thermonuclear war" attitude, particularly in the above email to Eric Schmidt, in which Jobs demands Google's cellphone software group stop "relentlessly recruiting" in Apple's iPod group. In another internal exchange, Google's former senior staffing stategist Amnon Geshuri informs Schmidt that a recruiter, having pursued an Apple employee, will be "terminated within the hour." Former head of People Operations Shona Brown declares it to be an "appropriate response" and asks Geshuri to "make a public example of this termination with the group."
While there are perhaps arguments to be made for the strategic benefits of these kinds of no-hire pacts, it's obvious from the emails we've seen that high-ranking executives realized their potential legal ramifications. Above, Google's Eric Schmidt notes that he doesn't want to create a paper trail explicitly mentioning the agreements, lest the company "be sued later." In a separate email, Intel CEO Paul Otellini expresses his desire that the existence of the handshake agreements not be "broadly known."
Below, you can see several of the most condemning documents, including actual no-hire lists from the likes of Adobe, Intel, and others. A common theme running throughout is that HR departments appear to have been free to accept inbound applications from the employees of listed companies, but were forbidden from initiating the recruiting of off-limits employees themselves.
Sean Hollister contributed to this report