Two very interesting and relevant US court cases were settled in the past three weeks involving anti-competitive behavior, namely no-headhunting agreements between large and high profile publicly listed companies.
In the most high profile case, four massive tech firms (Google, Apple, Adobe and Intel) who were the defendants in a class action suit, agreed to a settlement (subject to California court approval) of USD$324 million rather than have the case go to trial. Going to trial, set down for 27 May, would not only have risked a far larger payment, but an even greater cost in public humiliation as the details of such a high profile case were reported in the media each day.
The evidence uncovered in pre-trial proceedings proved to be extremely damning for the defendants with the Recruiter UK reporting:
The New York Times News Service reported one example of how, when Google was looking to employ a former Apple employee in Paris, the company sought permission from the late Steve Jobs, Apple's founder, and former chairman and chief executive officer.
And when Jobs found out that Google also wanted to hire other former Apple employees, Jobs wrote: "We'd strongly prefer that you not hire these guys." Google then allegedly backed off.
Another email exchange cited in the lawsuit revealed Eric Schmidt, former CEO of Google, telling Jobs that a Google recruiter who approached an Apple employee would be fired.
Based on court files Reuters reported that another exchange of emails showed Google's HR directors asking Schmidt about sharing the ‘no cold call' pact with other competitors.
Schmidt responded that he preferred it be shared "verbally, since I don't want to create a paper trail over which we can be sued later".
As dailytech.com reported ‘ ... it's not the only win in the non-compete hiring scandal'. Two other firms, legendary animation studio Pixar (now owned by Walt Disney) and business software provider Intuit had coughed up a combined $20 million over similar claims.
To further demonstrate how widespread this behavior appears to be in the USA, two weeks ago another case reached a settlement when online auction giant, eBay settled a case with the US Justice Department over its illegal no-headhunting agreements with other technology companies.
I am not aware of any similar cases brought by Australia's competition watchdog, the ACCC, suggesting that either the ACCC is not looking, or they have looked and, as far as they can discover, such agreements don't exist.
My views on headhunting are very clear cut.
To headhunt is what any good recruiter will do, whether they call it headhunting or proactive sourcing is another matter. An external recruiter's role as a valuable resource is to access talent that companies are unable or unwilling to access themselves.
All we are doing is discussing a potential opportunity with a candidate - they are under no obligation to accept. If recruiters accept that headhunting is unethical then we are colluding in lessening competition for candidates, which is a practice not consistent with a fully competitive marketplace and is in breach of competition laws.
Frankly, I think it's also hypocritical - every company loves the benefit of headhunting when they need talent, but don't like it when their employees are headhunted.
Has any recruiter had a shortlisted candidates turned down by their client specifically because 'they were headhunted, and as a company we think that's unethical'?
I thought not.
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