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Steve Jobs threatened Palm with patent suit if it objected to no-poaching pact

Jobs made threat shortly before former Apple executives officially joined Palm, documents reveal

By Loek Essers
January 23, 2013 10:56 AM ET

IDG News Service - Former Apple CEO Steve Jobs threatened Palm with a patent lawsuit if it did not enter into an agreement in which the companies pledged not to hire employees from each other, unsealed court documents show.

Jobs threatened Palm with litigation in 2007, according to an affidavit by former president and CEO of Palm, Edward Colligan, made public by the U.S. District Court for the Northern District of California on Tuesday. The documents were revealed in an antitrust lawsuit concerning no-poaching agreements among high-tech companies.

The released documents are part of a private antitrust suit from five former software engineers who worked at Adobe, Intel, Lucasfilm and Intuit. The former employees allege that seven technology companies including Apple, Intel, Adobe and Google conspired to eliminate competition for skilled labor to suppress compensation and the mobility of employees.

In August 2007, Colligan received a call from Jobs, who was concerned about employees that had moved between the two companies in the months before, Colligan wrote. "On the call, Mr. Jobs expressed concern about employees being hired away from Apple by Palm. As a solution, Mr. Jobs proposed an arrangement between Palm and Apple by which neither company would hire the other's employees, including high tech employees," he wrote.

"Mr. Jobs also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple's many patents," he said, adding that he did not agree to Jobs' proposal and Palm continued to hire employees from Apple.

Similar allegations of Apple threatening Palm with a patent suit over the same no-poaching proposal were also raised in 2009.

"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," Colligan wrote in an email sent to Jobs declining to accept his offer. The email was also published by the court. Although Colligan said though he understood that it is difficult when a respected employee leaves a company for a new challenge, businesses can not dictate where someone works.

"I can't deny people who elect to pursue their livelihood at Palm the right to do so simply because they now work for Apple, and I wouldn't want you to do that to current Palm employees," he wrote to Jobs.

During the year before the email exchange, Apple hired "at least" 2% of Palm's workforce, Colligan said. If Palm had hired the same percentage of workers from Apple in that period, that would have amounted to about 300 people, he said. "Instead, to my knowledge, we have only hired three."

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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