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U.s. Steps Up Probe of Hiring in Tech

By The Wall Street Journal

April 12, 2010



The U.S. Justice Department reportedly is investigating whether large technology companies have agreed not to recruit each other's employees in ways that violate antitrust laws and prevent computer engineers and others from changing jobs for higher pay or better benefits. The Justice Department could claim that an agreement between competitors that holds down labor costs is similar to price fixing.

"They're not agreeing on price, but they're kind of agreeing on costs," says antitrust lawyer Melissa Maxman. Privately, technology companies say that such agreements among companies are not anticompetitive and do not affect employees' salaries of job availability. The companies claim that it would be more difficult to collaborate on business ventures with other firms if they fear losing valuable employees. However, the Justice Department could claim that such agreements disrupt the labor market, hurting the economy by cutting incentives for other people to enter the field.

"In the long run, this is going to distort and depress the incentives for people to actually develop the talents and skills that are useful in this market," says Temple University professor Salil Mehra.

From The Wall Street Journal
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