US Inquiry Into Hiring at High-Tech Companies
The Justice Department has begun an investigation into whether the recruiting practices of some of the largest technology companies violated antitrust laws, according to two people with knowledge of the investigation.
The investigation targets some of Silicon Valley’s best known companies, including Google , Yahoo , Apple and several others, these people said.
The exact focus of the inquiry is unclear, but the people familiar with it said Justice Department lawyers appeared to be looking into whether the companies involved agreed to not actively recruit employees from each other.
The Justice Department has issued civil investigative demands, or formal requests for documents and information, to some of the companies involved, said the people with knowledge of the inquiry, who agreed to speak on condition of anonymity because the investigation is confidential.
Google, Apple and Yahoo declined to comment. A Justice Department spokesman could not be reached for comment.
The inquiry, which was first reported on the Web site of the Washington Post late Tuesday, appeared to be in its early stages, said the people familiar with it.
The market for technology workers and executives in Silicon Valley is very competitive, with employees frequently leaving a company to work for a competitor. Some companies have even sued rivals who hired employees. The investigation confounded some antitrust experts. But they said that it would be improper for companies to agree not to go after each other’s top talent.
Antitrust suits against companies for restraining the movement of skilled employees are by no means unprecedented.
In 2001, for example, in a federal appeals court decision written by Judge Sonia Sotomayor, the Supreme Court nominee, the court upheld a complaint by a group of oil geologists and petroleum engineers who sued Exxon and other oil companies for colluding in hiring decisions and thus suppressed wages.
“If there is a naked agreement by companies in an industry not to hire each others’ employees or an agreement to fix wages, that would be an antitrust violation,” said Herbert Hovenkamp, an antitrust expert at the University of Iowa College of Law.
The investigation is the latest aimed at Google and other technology companies to have surfaced in recent weeks and suggested that the Obama administration was taking a more aggressive stance toward antitrust enforcement.
Earlier this year, the Justice Department opened an inquiry into a settlement of a class action lawsuit between Google and publishers and authors.