Government Looks Into High-Tech Hiring Practices

The Wall Street Journal is reporting that the government is "stepping up its investigation into hiring practices at some of America's biggest companies," such as Google, Intel (News - Alert), IBM and Apple.

Evidently the government's worried that such companies may have agreed not to recruit each others' employees, which the Justice Department sees as a possible violation of antitrust law. It might be "costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits."

Henry Blodget notes that "the government's theory is that the collusion keeps salaries artificially low and that this is as serious a problem as price-fixing," while explaining that "the companies, meanwhile, say they can't very well raid each other's staffs constantly if they ever want to maintain strong business partnerships."

Information Age's Bob Evans hits the nail on the head when he writes "If you ask me, this is a clear sign that the employees at Justice have way too much time on their hands."

The Journal reports that a probe into the issue began over a year ago, and that "Justice Department investigators have concluded that such agreements do raise significant competitive concerns." The Justice Department hasn't confirmed the existence of the investigation, but as the Journal reports, "several companies said they have received requests for information on the way they hire employees."

Behind the scenes, the Journal says, "technology companies are making the case that agreements among companies are not anticompetitive and don't affect employees' salaries or the availability of jobs. They say such agreements are commonplace, used by companies to maintain good relationships with business partners."

As Evans says, "it's hard to imagine an industry with greater employment ability than that offered by the major IT vendors, particularly at the scale of the four enormous and aggressive companies" mentioned above.