Palm rejected Jobs's 'no poaching' Applers offer

Legality questioned


Two years ago, Apple chief exec Steve Jobs suggested to Palm's then-CEO Ed Colligan that the two companies agree not to hire each other's employees. Colligan reportedly refused, saying such a deal would be "likely illegal".

These revelations come in a report by Bloomberg on Thursday, less than two weeks after a similar agreement was reported between Apple and Google.

The report cites "communications" between Jobs and Colligan in August 2007 as its source. Apple's iPhone had been released in late June, coincidentally the same month that Apple's former iPod division chief Jon Rubinstein had joined Palm as executive chairman.

According to Bloomberg, Jobs told Colligan that he was anxious about Rubinstein poaching Apple talent. "We must do whatever we can to stop this," Jobs is reported to have told Colligan.

Rubinstein certainly knew who at Apple was worth luring away. After playing a key role in the development of the Apple-saving iMac, released in 1998, Rubinstein had gone on to shepherd the development of the iPod, released in late 2001, as head of Cupertino's hardware division. He was picked by Jobs to head up Cupertino's then-new iPod division in 2004.

After 15 years of working closely with Jobs, Rubenstein left Apple in 2006, joined Palm in 2007, and took over from Colligan as Palm's chairman and CEO this June.

After Colligan was contacted by Jobs in 2007, the communications reveal that he considered Jobs's offer, but ultimately rejected it, reportedly telling him that: "Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal."

The illegality of such a deal would likely be based on its anticompetitive nature - and the US Justice Department isn't turning a blind eye towards such hiring practices. This June, reports surfaced that a number of top tech companies were being investigated by the DoJ for anticompetitive HR shenanigans.

According to a June report by The New York Times, Google, Genentech, and Yahoo! confirmed that the DoJ had contacted them. Apple, Microsoft, and Intel declined to comment for the NYT report.

At issue in the DoJ investigation, according to the NYT, is whether tech companies have "gentleman's agreements" to not go after one another's employees.

But Colligan's reported communication declining Jobs's offer appears to take a "don't poach" agreement one step further. Colligan's phrase "regardless of the individual's desires" implies that Jobs had requested that Palm not only to refrain from recruiting Apple employees, but also to turn them down if they came calling on their own.

The Bloomberg report quotes Daniel Rubinfeld, a former deputy assistant attorney general for antitrust and currently a UC Berkeley law professor, as saying: "If I were at DoJ, I would definitely be interested.”

Today's revelations won't do much to thaw the Palm-Apple relationship, which has become frosty of late. Consider the back-and-forth battle between the two companies over the ability of Palm's Pre smartphone to sync with Apple's iTunes music-organization software. Consider also Jobsian stand-in Tim Cook's not-so-veiled patent-infringment threats regarding the Pre that he made during conference calls with reporters and analysts this January and April.

Apple hasn't sued Palm for patent infringement, nor has it made any legal moves to stop the Pre from mimicking an iPod when hooked up to iTunes. And although The Reg has no inside information whether such actions were in preparation in Cupertino, we'll go out on a limb and predict that Apple's legal team will be preoccupied by answering a few DoJ queries in the immediate future.

When contacted by The Reg, spokespersons for both Apple and Palm declined to comment on the Bloomberg report. ®


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