Google recruiter: Company kept 'do not touch' in hiring list

Jun 03, 2009 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- DNA | Quote | Chart | News | PowerRating -- A recruiter who left Google last year says that the company had maintained a "do not touch" list of companies including Genentech and Yahoo, whose employees were not to be wooed to the Internet search giant.

That revelation could be significant in light of this week's disclosure that the U.S. Justice Department is investigating whether Google, Yahoo, Apple, Genentech and other tech companies conspired to keep others from stealing their top talent.

Although Google declined to comment on the list or other aspects of the investigation, Palo Alto attorney Gary Reback, who has been involved in a number of high-profile antitrust cases, said having such a list is not unheard of and not necessarily illegal. He noted that some companies might keep such a list to avoid upsetting a valued business partner that wouldn't want to lose its workers, for example.

However, if two or more companies agree to avoid poaching employees from the same list of companies, Reback added, that could constitute anti-competitive collusion under federal law.

Some recruiters and others were surprised by the allegations, saying they conflicted with the valley's freewheeling and hotly competitive image.

"It doesn't fit," said Joe Maxwell of Santa Clara-based Silicon Talent, who like several other recruiters said he had never heard of any scheme by companies to keep their employees from going elsewhere.

The former Google recruiter said the do-not-touch list was periodically refreshed and was understood to be a "courtesy" to the companies on the list.

"When you are recruiting talent out of companies you do business with, you are hurting them," said another recruiter who did not work at Google but confirmed that such practices are common.

Tina Duccini, a former technical recruiter for Yahoo, said Yahoo had no restrictions about hiring people from other companies.

"Of course we went after Microsoft, Google and eBay," she said. "We prided ourselves on competing."

Occasionally, Yahoo recruiters would hear that the company's legal department had received a cease-and-desist letter from another company, Duccini said. But recruiters who poached continued to be praised, she said, noting that some managers once gave a standing ovation to recruiters who had successfully persuaded a competitor's entire engineering team to join Yahoo.

Geoffrey Teeter, a spokesman with Genentech, a South San Francisco biotechnology company recently taken over by Swiss drug firm Roche, acknowledged that Genentech has received a Justice Department request for information related to the investigation. He noted that "Genentech is cooperating and will respond to the request in due course," but declined to provide details.

The Justice Department and Yahoo would not discuss the investigation, although Yahoo confirmed it had received a request for information. Apple officials could not be reached for comment.

The hiring investigation is part of the federal government's intensified scrutiny of Silicon Valley business practices.

The Federal Trade Commission is looking into the makeup of Google's and Apple's boards, as well as claims that Intel has engaged in monopolistic practices. In addition, the Justice Department is examining a proposed settlement between Google and a group of authors and publishers that allows the Internet search company to sell digital copies of out-of-print books.

Few details have been disclosed so far about the hiring-practice probe, which The Washington Post first reported in a story on its Web site late Tuesday. Citing two unnamed sources, the newspaper said the Justice Department was examining the possibility that the four companies and other unnamed firms may have violated antitrust laws by "negotiating the recruiting and hiring of one another's employees."

Making it harder for employees to jump to another company could seriously hinder innovation in a place like Silicon Valley, said Bert Foer, president of the American Antitrust Institute.

"That area has been famous for people moving around from company to company, and when they do that they pollinate the new company with new ideas," he said. Moreover, by potentially limiting the career opportunities of employees, "at a certain point it becomes indentured servitude" for the workers.

Over the years, a number of employers have been accused of engaging in anti-competitive hiring practices. A 2001 federal appeals court decision written by Supreme Court nominee Judge Sonia Sotomayor, for example, found that oil companies had conspired to keep wages artificially low.

On the surface, employees at major Silicon Valley companies appear to have had no problem finding jobs at other firms, including their competitors. A number of key employees recently have left such companies as Yahoo and Google, in some cases finding work at competing firms. Last year, Bradley Horowitz, head of Yahoo's advanced development division, became Google's vice president of product management. And in May, Yoelle Maarek, engineering director at the Google Haifa Engineering Center, became senior director of Yahoo research.

California has especially tough rules barring companies from restricting their employees' job hunting. Many companies across the country require employees to sign so-called noncompete agreements, in which the worker agrees not to be hired by a competitor within a certain period of time. But California law generally regards such pacts as unenforceable, said Bob Taylor, a Palo Alto attorney who specializes in antitrust law, among other areas.

As a result, Taylor said, California "is one of, if not the most, difficult states for employers to prevent employees from taking jobs with competitors."

Contact Steve Johnson at sjohnson@mercurynews.com or 408-920-5043.

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