A few days ago, U.S. District Judge Lucy Koh dismissed a class action lawsuit against several animation, and visual effects companies. This is directly tied to the emails uncovered in a 2010 suit by the Justice Department for the companies agreeing not to poach employees from one another. Ed Catmull — one of the most important people in computer graphics, and film — was sending very casual emails about coercing people to participate in the no-poaching scheme. Ed also did away with contracts because they thought it would be better for employees not to be tied down, they’d all be “at will” and could, in theory, leave for better paying jobs. You know, jobs no one was offering them because of Ed’s no-poaching agreement.
From Joel Rosenblatt, writing for Bloomberg Business, emphasis mine:
“We have avoided wars up in Northern California because all of the companies up here — Pixar, ILM, DreamWorks, and a couple of small places — have conscientiously avoided raiding each other,” Catmull wrote to [Disney Executive Dick] Cook.
Asked about the e-mail during his January 2013 deposition, Catmull said he saw it as his duty to insulate Northern California film companies from salary bidding wars that drive costs up, move the animation jobs overseas, and destroy the U.S. industry.
“Like somehow we’re hurting some employees? We’re not,” Catmull said. “While I have responsibility for the payroll, I have responsibility for the long term also,” Catmull said. “I don’t apologize for this. This was bad stuff.”
Steve Jobs played a major role in this through Pixar and Apple.
When Koh ruled against the former employees, I was gobsmacked that the employees couldn’t sue the companies because the statue of limitations had expired. The clock started ticking when the employees were affected, not when proof of a scheme came to light. So tough cookies.
During my twitter indignation over this, Glenn Fleishman and Jason Snell pointed me towards the new Becoming Steve Jobs book. They informed me that the book doesn’t shy away from it (unlike Catmull’s autobiography) and specifically includes a quote from Tim Cook defending Steve Jobs’ position in this. The book is, frankly, a bit of a mess, particularly the chapter relevant to the no-poaching agreement.
From Chapter 16 of Brent Schlender’s & Rick Tetzeli’s Becoming Steve Jobs:
Tim Cook doesn’t see anything egregious in Steve’s thinking—even though he has since tried to settle the lawsuit by offering to pay hundreds of million of dollars to participants in the class-action suit. “I know where Steve’s head was,” he says. “He wasn’t doing anything to hold down salaries. It never came up. He had a simple objective. If we were working together on something—like with Intel, where we threw everything in the middle of the table and said let’s convert the Mac to the Intel processor—well, when we did that we didn’t want them poaching our employees that they were meeting, and they didn’t want us poaching theirs. Doesn’t it make sense that you wouldn’t, that it’s an okay thing? I don’t think for a minute he thought he was doing anything bad, and I don’t think he was thinking about saving any money. He was just very protective of his employees.” It’s a rational argument, insofar as it goes. All CEOs want to keep their best employees at their company. But it ignores the simple fact that making such an agreement with other companies, explicitly or otherwise, is illegal, according to the U.S government and most antitrust lawyers. Steve, apparently, couldn’t be bothered even with acknowledging those rules.
With all the positive, social speaking he’s done recently, it was very disappointing to read Tim excuse this.
It shouldn’t really be surprising, since Ed Catmull doesn’t regret his actions at all. He didn’t include them in the book he wrote, which specifically talks about managers needing to understand the mistakes they’ve made, so … great book, Ed.
If there’s anything Steve, Ed, and Tim are guilty of, it’s caring too much about employees. Don’t you get it?