Aug 20, 2009 12:32 PM

Palm CEO Rejected Jobs' Anti-Poaching Agreement as 'Illegal,' Report Says

Palm’s CEO Ed Colligan told Steve Jobs in e-mails that he would not agree to a proposed ban on the companies sniping each other’s employees, calling the idea “likely illegal,” according to a Bloomberg News report. The news sheds light on an ongoing Justice Department investigation in anti-poaching agreements between high-tech companies, including Apple and […]

Palm's CEO Ed Colligan told Steve Jobs in e-mails that he would not agree to a proposed ban on the companies sniping each other's employees, calling the idea "likely illegal," according to a Bloomberg News report.

The news sheds light on an ongoing Justice Department investigation in anti-poaching agreements between high-tech companies, including Apple and Google. Such agreements are likely to be viewed by prosecutors as anti-competitive.

Apple and Google had hoped to head off an investigation into their close ties by having Google CEO Eric Schmidt step down from Apple's board early this month, but the feds made it clear it was continuing its investigation.

While the communications seen by Bloomberg did not include any proposal from Apple CEO Jobs, Colligan mentioned one in his response.

"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 said to Jobs, 54, according to the communications. Colligan said he thought about Jobs' proposal and considered offering hiring concessions, before deciding against it, according to the exchanges. [...]
Jobs said Apple had patents and more money than Palm if the companies ended up in a legal fight, according to the communications.

Palm hired Apple's chief iPod engineer Jon Rubinstein shortly after Apple released the iPhone in June 2007. Rubinstein led Palm's development of the Palm Pre, a smartphone to rival the iPhone. He replaced Colligan as CEO in June.

Apple hired 2 percent of Palm's workforce prior to releasing the iPhone, Colligan said in his communications, according to Bloomberg.

Apple and Palm continue to duel for the smartphone market. The Palm Pre allows its users to sync media using Apple's iTunes software, which Apple promptly blocked with a software update. Palm countered with an update of its own that reinstated the feature.

Neither company has commented on the report.