DOJ probes possible tech hiring pact by Google, Yahoo, Apple

The The Deal Pipeline (www.thedeal.com) reports that according to Washington antitrust lawyers, the Department of Justice has sent letters to at least a dozen major computer hardware and software companies, such as Google, Yahoo! and Apple. The letters suggest that antitrust division lawyers suspect that some of the targeted companies have agreed not to poach each others' employees, which is in violation of the nation's oldest antitrust law, the Sherman Act of 1890.

Here is the letter courtesy of Marielena Santana at TheDeal.com:

DOJ probes possible tech hiring pact
by Cecile Kohrs Lindell In Washington
Updated 06:13 PM EDT, May-29-2009

New Assistant Attorney General Christine Varney has launched an investigation into hiring practices among high-tech companies.

According to Washington antitrust lawyers, the Department of Justice antitrust division's networks and technology section, led by chief James Tierney, has sent letters to at least a dozen major computer hardware and software companies. Google Inc., Yahoo! Inc. and Apple Inc. are believed to be among the recipients, as is at least biotechnology firm, Genetech Inc.

A DOJ spokeswoman did not respond to a request for comment.

Google spokesman Adam Kovacevich declined to comment on the matter.

The letters suggest that antitrust division lawyers suspect that some of the targeted companies have agreed not to poach each others' employees. Such an agreement, if DOJ lawyers can prove it exists, could be a violation of the nation's oldest antitrust law, the Sherman Act of 1890, which prohibits agreements among competitors that result in restraint of trade.

Although a potential violation of antitrust law, if confirmed the suspicions may not rise to a criminal violation. Sources said the letters appear to be in the form of a Civil Investigative Demand.

The DOJ's staff has been increasingly active since the arrival of Varney and her deputies, who include two top antitrust litigators, Molly Boast and Bill Cavanaugh, and a well-regarded economist, Carl Shapiro, who held the post during the Clinton administration. Another marquee staffer, Phil Weiser, is yet to arrive from his teaching post at the University of Colorado Law School.

An antitrust lawyer said that the DOJ's staff has been authorized to investigate matters that would not have been given serious reviews under prior Assistant Attorney General Tom Barnett.

Varney promised a departure from previous practice quickly after arriving at her post. Barnett, an experienced antitrust lawyer who has returned to private practice at Covington & Burling LLP, the former firm of Attorney General Eric Holder, was criticized by a vocal contingent of the antitrust bar for approving some controversial mergers, including Whirlpool Inc.'s purchase of Maytag and the combination of XM and Sirius Satellite Radio Holdings Inc.

In recent speeches, Varney has invoked the foresight and commitment to antitrust demonstrated by Thurman Arnold, President Franklin D. Roosevelt's pick to head the antitrust division.

Arnold tripled the number of cases the division files, and has drawn praise for helping restore competition to troubled Depression-era markets