Saturday, September 25, 2010

DOJ Cold-Calling decision

This week brought the DOJ's much-anticipated decision in the high-tech cold-calling investigation. I've been crawling around in the tiny bit of information available, trying to figure out what was actually decided, and what it means (if anything).

There isn't a lot of information. In addition to its summary of the case, the DOJ has published the actual complaint, and some supporting documents. Google published a very short comment about the decision. Chris O'Brien has an opinion piece in the San Jose Mercury News, and a few bloggers have weighed in with some thoughts.

But mostly, this action seemed to pass quite quietly through the media; nobody really had much to say about it. Far more attention has been paid to the "Angelgate" scandal.

So, what actually happened? The DOJ says:

The proposed settlement, which if accepted by the court will be in effect for five years, prohibits the companies from engaging in anticompetitive no solicitation agreements. Although the complaint alleges only that the companies agreed to ban cold calling, the proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices.

The Wall Street Journal says that this action was just the first step in a broader attempt to change the behavior throughout American industry:

A settlement with tech companies—or a court fight—could therefore help determine what kinds of agreements are acceptable in other industries as well.

At stake are dueling visions of how far companies should be able to go in agreeing to limit the kind of headhunting that can help valuable employees increase their compensation.

Chris O'Brien wonders whether the DOJ decision may open the door for disgruntled employees to sue for improper treatment:

Those who do think they got the shaft may sue. And because this is an antitrust finding, the settlement will allow anyone who wins in federal court to "recover three times the damages the person has suffered."

I find it hard to imagine the situation in which this might happen. Would this be an example of such a disgruntled employee? He doesn't seem likely to sue; rather just to move on to something else. Meanwhile, the papers are full of high-profile stories of high-tech companies competing vigorously over the top engineers.

I guess I'm left with the nagging sense that this decision was important (why else would the government have invested so much time and energy into it), but little deep understanding of what the government was trying to achieve and whether they believe they accomplished that. I'll keep my eyes open for some sort of explanation, and let me know if you think I'm misunderstanding this!

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