Silicon Valley has become known for its progressive workplace culture created by young people. In recent years, charter buses, free lunches, game rooms, nap pods, and on-site dining have become commonplace. Despite companies' efforts to retain employees with newer and cooler workplace perks, there is a dark side to employee retention that has grown in tandem with Silicon Valley culture.
No-poach agreements are illegal deals between companies in which they agree not to hire, recruit or pursue each other’s employees, and are an egregious threat to employee rights.
By restricting employee mobility, no-poach agreements prevent employees from obtaining fair wages in a competitive market. If Company A and Company B agree to not interview nor extend higher salary offers to employees from each other’s companies, this limits competition and thereby the opportunity for employees to seek better compensation and benefits.
The no-poach team at the Joseph Saveri Law Firm has established itself as an antitrust powerhouse, exposing no-poach agreements including those made famous in 2010 when civil complaints were made against Silicon Valley heavy hitters Apple, Google, Intel, Adobe Systems, Pixar, Lucasfilm, and other tech companies.
These companies entered into “no cold-call” arrangements, a type of no-poach agreement in which companies agree to not initiate contact with one another’s employees and to notify each other if an offer is extended. The agreements violated the antitrust laws. They reduced the salaries of the employees and reduced their ability to seek and obtain employment from other companies. The settlement of the complaints required the defendants to pay back more than $400 million dollars to the target of the agreements.
Today, illegal no-poach agreements continue to be made in secret, and employees are catching on to some of the toxic elements of corporate culture. Sure, all the job perks are fun and exciting, but are they a distraction from important matters like fair pay, reasonable working hours, job security, health insurance, fair competition, and career advancement?
It turns out that these fundamentals are more important to young workers than foosball tables—although nobody would complain if both were offered.