Hacker News Reader

Comment by simon_ | Hacker News Reader

Although I get that these sorts of agreements may well have been illegal and unethical, all this outrage over the attitudes of the executives seems overblown to me.

Try putting yourself in Eric Schmidt's shoes: from his perspective, the greed of an individual employee to generate recruiting commissions by violating a strict policy endangered a key strategic relationship. This could obviously not be tolerated and the lack of a strong response would make enforcing the whole landscape of mission critical policies harder. These guys HAVE TO think of the system before the individual or the system will not work.

And in general, in any industry and any role, if you start a fire that the senior management team 10 levels up has to put out... you will expect harsh treatment.

View on HN

You say you understand that these agreements are illegal and unethical and at the same time admonish us to put ourselves in the shoes of those people who engaged in this illegal and unethical behaviour.

Okay. Let's do that shall we?

I am Eric Schmidt. I have made a conscious decision to collude illegally in order to suppress the wages of my own employees because I frankly don't think us folks at the top are getting enough of the pie. So we're going to take more - not through our talent, but through our power. Because fuck everyone below us. They're clearly greedy (your word) so they'll get what we give them.

I'm not entirely certain that's the motive... I mean, as a CEO it is your responsibility to do what is best for the _company_. If you can save the company a lot of money in wages and prevent top talent from leaving then it's your responsibility to do so.

Not that I think what they did is ethical or legal, but I'm not entirely sure that greed is the motive here.

You may be right. I apologise for any inaccuracies in my shoe-placing. It's as good as I can do when trying to empathize with psychopathic assholes.

Overkill to let him off. 'psychopathic' almost implies internally generated impulses beyond conscious control. I suspect 'asshole' sums it up nicely.

You seem to have missed the irony.

To paraphrase jobs:

And what if you can make the company a lot of money by selling crack to kids? Or embezzling money from your customers' bank accounts? Or by cheating on your tax?

As a CEO it is your responsiblity to do what is best for the company _within the law_.

CEOs and companies can establish their own priorities. That may be profit or revenue, but it could be any number of other things like deliberately choosing "green" options even though it increases their costs and reduces their profit margin. Or even paying talent what they deserve. That isn't (by most standards) "best for the company", but it's the choice of those running the company, and in the long run may prove out to be the better choice. Quarterly thinking kills companies, and they deserve it for their short-sightedness.

And cutting wages and forcing people to stay, that might save money, but it's hardly "best" for the company. I've left two jobs because management thought that was a good idea. I was poor (a low, 4-digit bank balance poor) the first time, and I have no regrets. I'd do it again if put in the same position. Screw incompetent management.

Employees are 'the company.' Screwing over your employees is not in the companies best, long term interests.

Conditional on having an illegal policy, enforcing said policy in an effective manner similar to your enforcement of other (legal) policies should not earn you extra condemnation.

> Conditional on having an illegal policy, enforcing said policy in an effective manner similar to your enforcement of other (legal) policies should not earn you extra condemnation.

Why not?

Expressing outrage at extraneous facts surrounding a widespread unethical conspiracy to screw workers, should not earn you a pretentious lecture about compartmentalising your emotions.

Speaking of conspiracy...

Anybody else looked at AngelList and the salaries being offered?

Isn't it strange that the majority of salaries, cash and equity, top out at the same amount?

Isn't it amazing that in a free market, hundreds of start-up founders value engineers the same?

Smells like something fishy going at the angel funds and VCs to price fix wages of start-up worker bees...

Free markets tend to balance out at an equilibrium price.

Sounds a bit like saying "Conditional on being a thief, behaving like a douche should not earn you extra condemnation".

Some of the executives seem professional and that's ok, but others seem to take things rather personally, with all the marks of an ego trip.

Conditional on having an illegal policy, enforcing said policy in an effective manner similar to your enforcement of other (legal) policies should not earn you extra condemnation.

Sure it should. You should not be enforcing the policy, you should be denouncing it.

The point is these actions aren't any different than if they were enforcing any other ethical and legal policy. These emails aren't really shocking at all. It just shows its business as usual.

Which is part of the point. Employees are considered as commodities, and a career-ending breach of a (illegal) policy is treated as a fixing a bug in your code - jokes and all.

Hardly career ending. People get let go. It happens. You didn't see a "He'll never work in this town again!" This just seems to detract from the actual issue which is the policy itself.

What most people fail to realize is that by colluding to repress wages, they essentially robbed the State of California of tax revenues, at a time when school teachers were being asked to do without teacher aides.

I have one word: Prison.

You should stay in prison for a few days before you suggest it so casually.

If you're going to start accusing folks of 'robbing' the State of California, you should carefully investigate the morality of compulsory taxation.

I think you'll find that the State does a damn site more robbery and extortion than any group of tech companies.

The behavior is not acceptable. This is a cartel to "fix" the wages of workers - esp. when these tech companies claim their workers are the most important resource.

Now, I am not surprised the book price fixing Apple did with the publishers.

But both Apple and Google get a pass - think if it is done by Oracle or MSFT, well we would be talking about Evil Empire and Death-star

Yup. "It was St.Steve of Cupertino, and the Do-No-Evil Company Inc., so that makes it quite all right."

What do you mean "get a pass"? This story has been on and off HN's front page for months and the companies involved, including Apple and Google, have received nothing but strong criticism every time.

> What do you mean "get a pass"?

This is what he's referring to:

> all this outrage over the attitudes of the executives seems overblown to me

I'm no "occupy wall street" fan, but I think taking millions of dollars from the pockets of a lot of workers is very much something to be outraged about.

It really comes down to this:

If you are working, you don't want to jeopardize your job with a lawsuit against your employer. Lest you do, you get blackballed.

If you aren't working, you cannot afford a lawyer. End of discussion.

Perhaps the Justice department can do something... But then again, I'm sure it will be smoothed out with greased palms to both parties.

He's specifically talking about outrage over the attitudes, as in how the execs handled this one incident. His entire point is that the attitudes displayed in this e-mail chain are unrelated to the larger wage-fixing scheme.

Of all the discussion forums on the internet, I'd expect HN to be one where it's possible to discuss things rationally and discuss individual aspects of an issue separate from the whole in a reasonable manner, without being called out for failing to express the proper quantity of outrage at every step. Of course, this is completely naive of me as it ends up being proven wrong over and over.

I get where you are coming from and appreciate the desire to keep things rational. But sometimes there is a time and place to get angry about things that are wrong. Everyone has their own issues, and I can see that this particular one wouldn't get everyone fired up, but it certainly flips my bits: they summarily fired and "made a public example" of a person for not following an illegal policy.

I can understand getting upset about this. I personally see it as a sort of "double dipping" on outrage in this case, but that's just a difference of opinion.

My main point here is simply that not getting outraged at the attitudes displayed here is far from giving these companies a pass on what they've done.

I agree with Mike here. Bear in mind that we're talking about the attitude of the execs, not the substantive issue at hand. Imagine if the issue at hand had been a Google employee deliberately breaking Google Maps for iPhone (back in the day when Google and Apple got on fine). Would anyone be surprised / outraged by Google firing the employee, and Steve Jobs forwarding the email informing him to Scott Forestall with a smiley face? I would think not.

Now, just to be extra clear, I agree with most people on HN that the substantive issue of non-poaching agreements is not acceptable. I expect all companies that were involved to be justifiably raked over the coals for it. But Steve Jobs responding with a smiley when he receives confirmation that the agreed-upon policy has been enforced? Total non-issue.

Even the attitude irks me. You need to fire someone, you fire them, you don't "make a public example" of them as a sign of obeisance to the head of a competing company. I want to know my boss has got my back, rather than thinking they're willing to throw me under the bus without so much as asking me about it if they get a harshly worded email from someone else.

Thank you. That's 100% correct. You don't make them a public example. I think Sharon is finding out what it's like to be a public example right now.

Just for your information, I've been on three separate management courses which say the contrary - when you're trying to set a cultural norm in your company, making a public example of infringers is practically considered the textbook response. The example given usually concerns sexual harassment. You make the punishment of the harasser public as a way of reinforcing that you're serious about the issue.

That said, most management courses will also tell you to privilege process over people - if something goes wrong it's because the process failed, not the person, and as such most of the time a public correction of someone making a mistake is not appropriate, unless it is felt that the person acted knowingly and deliberately against the rules... So unless the recruiter in question had already been corrected on this error, not only should they not have been fired, but they should not even have been reprimanded in public.

I've been on three separate management courses which say the contrary - when you're trying to set a cultural norm in your company, making a public example of infringers is practically considered the textbook response.

Then the textbook is wrong and should be thrown out. These are people we're talking about, real, actual, flesh-and-blood people... with feelings, family, friends, lives, hopes, dreams, etc. Not fucking "resources" or some fungible asset that can be treated as nothing more than a cell in a spreadsheet, and certainly not something that is a valid target for public shaming.

What do those same courses and textbooks say about illegal collusion about companies, managerial ethics and the like?

I'm glad my boss is a person, not a textbook.

"Meet the new boss same as the old boss."

Agreements between companies to not recruit each others' workers are not actually immoral.

There are many immoral laws, and whatever law is being thrown at them in this case is one such.

I also think it was immoral to stop MSFT from selling their product as they saw fit---with Windows and IE bundled. So you can't accuse me of being partial to one set of companies over another.

Collusion is, if not immoral, at least inconsistent with free markets.

Not, really. In a free market, everything is allowed, no? There is no arbiter to enforce any rules.

You cannot have efficient free markets without rules, because of the presence of externalities and monopolies. That's Econ 101. Beyond that, I'd argue you can't have markets at all without rules. Markets do not generally develop in situations where killing your counter-party and taking his stuff is allowed.

>You cannot have efficient free markets without rules

Wouldn't that be the most efficient free market? One in which only the most brutal and powerful ideas and companies prevail (with money)?

An efficient free market maximizes production. Markets in which companies can externalize costs or engage in monopoly behavior produce less than markets in which these behaviors are prevented.

"Free market" is not synonymous with "anything goes." It's a specific economic (rather than ideological) concept. Most economists believe that certain rules and restrictions are necessary to have any functioning market at all.

> An efficient free market maximizes production.

The usual economic definition of efficiency would be maximizing utility experienced by market participants, not maximizing production.

Currency-denominated "product" measurements are a common proxy measure for utility, but that's a compromise to the inability to measure utility directly.

You cannot have free markets period; a free market is an simple economic ideal that is unachievable in the real world, something like a "frictionless surface" or a "perfectly thermoconducting sphere".

What the best approximation you can acheive to a free market is depends on exactly what the features of the concrete set of products you are concerned with is, what features of the free market you prioritize approximating, and what technology (both technical and social) is available in the environment you are working in.

I've been thinking about this 'wage suppression cartel' as being the same basic idea as labor unions, only with the monopoly being on the side of business rather than labor.

But in a free market, contractual agreements would be upheld and enforced by an agreed upon arbiter.

Yup - it's the same basic idea as labor unions, but with participants taken from the group that controls 40% of the economy assets instead of those that have a near-minimum wage. That surely makes a difference in the amount of power that they can exert?

The basic idea of leveraging what you have a monopoly over is the same. But it is a good question you bring up of whether a group that controls 50% of economic assets in a particular industry is more powerful than a group that controls 50% of labor in the same industry.

A group where money is concentrated in a few hands, vs a group with thousands of members that controls a labor force that can be easily replaced by robots or outsourced? There is no color to that struggle, it's finished before it started.

> In a free market, everything is allowed, no? There is no arbiter to enforce any rules.

That's not really how you keep a market free. A free market requires regulation. Without it, you get a market dominated by monopolies and cartels, rather than open competition.

According to most supporters of the free market, at least among libertarian types, a free market will prevent monopolies and cartels from forming without regulation

I don't know how much I agree with that, but your opinion certainly isn't universal.

Yeah, but there's little evidence to support that. Corporations will form cartels and monopolies if they get the chance. Unless they consider enabling corporations also a form of regulation (which is kinda true). I do agree that we'd have a more free market without corporations.

Of course, with sufficient lack of regulation, it also becomes possible to just shoot people who monopolize stuff.

> at least among libertarian types

Libertarians are not a single group of people - and most libertarians agree that government is necessary to ensure the Law is respected - only a fraction of libertarians actually think no government is necessary at all. What most libertarians agree on is that Big Government is a Bad thing, not that it should be completely removed.

In economics, "free market" is a term of art referring to an efficient market, which requires specific operating conditions.

In libertarianism, "free market" means, "I'll shoot you if you try to make me pay taxes!".

The difference is glaring.

That's a straw man so obvious, it almost self-labels as a strawman. "When libertarians say they want a free market, they aren't actually saying they want a free market..." Come on, if you have to stoop that far, when you're deliberately and openly rewriting the terms that somebody else is using, why not just admit you don't actually have an argument?

What rewriting? "Night-watchman state" and "necessary axioms for the Efficient Market Hypothesis to hold" are completely different things. The libertarians are making an argument from (broadly, there are several branches of libertarianism, after all) Nozickian ethics and conflating it with mainstream economics.

No. Not at all. I really wish people understood what "free market" means. Just like "free software" is used by people to mean open source, free as in libre not gratis, "free market" does not mean anarchy.

A free market is one which is free from government price intervention - subsidies, price floors, price ceilings but also free of monopolies and cartels. In practice, a government may need to step in to break up a monopoly or stop an anti-competitive cartel to maintain a free market.

That is false. A free market is properly defined as a market where the use of force is barred by the government.

So when the government itself initiates force in the market, it is not a free market.

There is no such thing as a monopoly without the use of force. You can temporarily have companies that have a very large share of their respective markets, but monopoly is not properly defined as "a very large company."

A cartel is just an opportunity for other people to make money by undercutting the cartel. For instance, if the cartel is maintaining artificially low wages, the competitor can take advantage by paying "normal" wages and getting the best employees. Hence, a cartel is not stable. (Unless it has government force backing it---as all modern successful cartels do.)

This bizarre fixation with the "use of force" as a critical dividing line is to my mind incomprehensible. "A free market is free except for the arbitrary restrictions I think are fundamental."

collusion is absolutely consistent with free markets. Companies make deals ALL the time. Getting lower rates for supplies, fencing off markets, agreeing to not litigate, etc.

Looking at it another way...these companies are trying to keep their costs down (labor being #1). This in turn allows them to charge lower prices for their products while maintaining a profit margin that keeps investors happy. They are serving their consumers. We should be thanking them for being prudent and not engaging in labor bidding wars that would push their costs skyward. This is capitalism 101.

Companies make deals, but making deals across an industry to fix prices inputs undermines the market. If everyone that used bananas colluded to set artificially low prices, that might result in cheaper banana products, but would result in a deadweight loss. I.e. the loss sustained by the banana producers would outweigh the savings to the consumer.

This wasnt across an industry...this was between two companies...apple and google.

Even still your analogy is still wrong...you are talking about banana consumers (which inherently will always go for the cheapest banana products that satisfy their needs) vs. a business who is trying to keep their costs down to remain competitive.

There is an saying that everything in business should be viewed from the eyes of the consumer. If the consumer is getting the same product for cheaper and the business model is still viable (aka the business can sustain that price) then it's a net win.

Again in your example, banana producers will lower their prices until they cannot be viable and thus they will stop supplying bananas. You cannot collude enough to keep failing business models in business.

> you are talking about banana consumers (which inherently will always go for the cheapest banana products that satisfy their needs) vs. a business who is trying to keep their costs down to remain competitive.

I'm talking about companies that buy bananas, not consumers. The supply chain looks like Farmers -> Dole/Chiquita -> You. If Dole and Chiquita colluded to keep the cost of bananas from farmers low, that is collusion that creates economic inefficiency.

> There is an saying that everything in business should be viewed from the eyes of the consumer. If the consumer is getting the same product for cheaper and the business model is still viable (aka the business can sustain that price) then it's a net win.

This "saying" is blathering that has no basis in economics.

> But both Apple and Google get a pass

Seems like the opposite. Apple and Google are being called out for their behavior on a regular basis in the tech press, while the other companies named in the suit (Adobe, Intuit, etc.) are barely mentioned.

The other companies don't get the online press their well deserved pageranks and clicks in news aggregators that Apple and Google do when used in headlines.

First, Apple and Google haven't been getting "a pass" they've been called out as the primary perpetrators every single time this story has come up. Which has been many times, for several months now.

Second, you don't need your hypothetical: Oracle and MSFT were both involved. And, if anything, they're getting "a pass" because their involvement has always been a secondary data point under the headlines about Apple and Google.

In any case, if the board or geeks in general had any special reserve of outrage for those two companies, that should have surfaced by now, right?

So where is it?

Say what? "The greed of an individual employee". Said employee is a recruiter, her job is to source people. Can hardly be called a case of greed especially when considering the whole context and greed on the part of the participating companies.

The outrage over the attitude of the execs in question is not so much because we don't understand business. Yes, we get it. This endangered a strategic relationship and deserves a strong response. The outrage is due to the nonchalance and utter arrogance shown by these execs, which were in previous times considered as inspirational leaders and models to aspire to.

I personally think it is important to show our outrage and reaction over the attitude of the execs because many folks would like to work for Google, Apple, etc... This gets them thinking about whether they'd really like to work for such companies and under such leaders.

So the person that was fired was the greedy one and Eric Schmidt was the victim?

Just wow.

I can see why you feel the outrage over this is overblown. I personally think there isn't enough outrage.

> I can see why you feel the outrage over this is overblown. I personally think there isn't enough outrage.

Agreed. Apple and Google were actively colluding against their workers.

The point of the comment to which you're replying is to be outraged at the right thing. Be outraged at the no-compete policy (it's illegal)! Don't be outraged at the efficient enforcement of the policy.

Would it be better if the recruiter had just been given a PIP instead of being terminated? And Eric Schmidt had e-mailed to Steve Jobs, "Sorry, won't happen again, the employee is on probation and I personally lectured them." No, because the policy would still be in effect.

The swift response from the top of both companies does tell us something, though. It tells us, for one thing, how much this had to do with a person-to-person deal between Schmidt and Jobs. It also shows how Google was anxious to demonstrate its faith to the agreement. The trust must have been pretty fragile if Google was so anxious to demonstrate it was not misplaced.

The problem with the OP is that it focuses anger on the efficient enforcement aspect. That's a side issue.

''Be outraged at the no-compete policy (it's illegal)! Don't be outraged at the efficient enforcement of the policy.''

It's reasonable to think that both things are not at all unrelated. In a mindset that considers "terminating an employee's career within the hour with no recourse" an efficient enforcement of policy, "colluding to ensure low wages" can be seen as achieving the same kind of efficiency for the company.

I think I'm fine with feeling outrage at the efficient enforcement of policy. Doing something bad efficiently doesn't suddenly make it good.

>These guys HAVE TO think of the system before the individual or the system will not work.

"The system" being an illegal no-compete agreement, an unethical, immoral boot on the face of Schmidt's own people. It's a system in the sense that it was a systematic process of betrayal. That's what he was protecting. That's what couldn't work if he put individuals ahead of "the system."

This isn't just a betrayal of the employees of Google and Apple et al. This is a betrayal of the very free-market, capitalistic, "greed is good" Randroid principles these Master of the Universe types have touted and have in turn been celebrated for.

Speaking for myself, I'm not surprised. I don't think that ultra-free-market stuff works. This is what happens again and again; once someone gets ahead in a free market, they turn around and try to cement their position by making the market less free.

But I can see why so many others are so angry. These guys, Jobs and Schmidt and Brin, were heroes to a lot of people, especially here on HN. But it turns out they didn't actually believe in the principles we thought they embodied. It's one of those moments behind the adage "Never meet your heroes."

There is a bigger system than Google/Facebook here: all the engineers that work for these and other companies. It's not just this one person who is affected. There are all these engineers whose wages and opportunities are lower that they could be.

Exactly, you could call it the trickle-down effect.

If you apply for a job at a start-up they can say "Hey, an engineer at Google makes this much, you're not as good, so you're going to make 25% less, and since this is a start-up we're going to take another 25% off.".

Look at AngelList and the salaries being offered. Isn't is strange that the majority of salaries top out at the same amount, and the amount of equity on offer seems to be the same too.

Smells like something fishy going at the VCs to price fix wages of start-up worker bees...

The system works just fine without using peoples' livelihoods as a mechanism to "make a public example." At the companies I have worked, firings happen, of course, but it's something people talk about in hushed tones because frankly people are embarrassed to have to do it. This shame is virtuous.

Agree. If you assumed the non-solicitation policy were legal and ethical, then the rest of the actions make sense. (Of course they're neither.)

Also, I think the article takes a lot of liberties with descriptions. I didn't see military glee. And Steve's response struck me as that of a guy who sends thousands of emails a day and got something he wanted resolved, not schadenfreude.

> Try putting yourself in Eric Schmidt's shoes: from his perspective, the greed of an individual employee to generate recruiting commissions by violating a strict policy endangered a key strategic relationship.

If said employee were aware of the policy, then he would surely no that this candidate was non-hireable, right? Firing for that sounds like a mistake. If we take the article at face value, his firing certainly does not look justifiable.

On the other hand, the emails do not make it clear as to whether this was the recruiter's only policy violation.

>"Although I get that these sorts of agreements may well have been illegal and unethical, all this outrage over the attitudes of the executives seems overblown to me."

I wouldn't quite say that...

I believe you're absolutely correct about the strategic concern, the act and the result is easy to understand.

What's really distasteful is the tone from all parties. The whole exchange is dripping with polite passive-aggressive nastiness, boot clicking and ass-covering.

It's possible to be pragmatic and decent about it.

Agree. Employees get summarily fired for violating policies every day, in every business sector. Try showing up late for work at McDonalds. The second or third time you do it, bye-bye.

Policies don't mean much if they are not enforced.

I'm not defending the policy in this case, but given that it existed, and was apparently very clearly communicated to employees that it was a "zero-tolerance" deal, Google could hardly have reacted in any other way.

The right way to think about the system would be to simply expand the acceptable hiring pool. The hyper selectivity that big SV companies use for hiring artificially limits the pool of possible applicants and drives up wages. Expanding the pool would solve this problem without going into illegal practices.

Ok, as I'm still not able to find anywhere where a legal ruling says a 'do not call' is illegal, could someone please direct me to said ruling?

I get that part of what they were doing has been deemed illegal, namely the 'do not hire' restrictions, but a 'do not call' list doesn't seem like it could possibly be illegal.

Shouldn't Google fire Eric Schmidt now using your logic?

Agreed. I understand the concept of wage-fixing that's happening here, but I also see the vemon that's laced in all the articles written about it to make Google/Apple execs seem as evil as possible. I get it, they've been doing stuff under the table and people are losing their jobs needlessly... but it doesn't need to be stated in this manner.

And it hasn't left my mind that even with all these wage-fixing complaints, those of us in the soft-engineering field are still enjoying the current good times and we still have SF-gentrification issues, and all the outside-of-tech people, who have real problems.

This whole thing is beginning to lose perspective. Because seriously, we're doing...pretty...freakin'...well these days on our average 6 figure salaries. The real victims are people like the HR-lady who lost her job.

Engineers are doing well, for sure. But compared to the profits of Google and Apple and their executives, engineer salaries are a joke. And yet, these cartels did not help to support the HR lady who lost her job, but instead served to further enrich the obscene wealth of the executives in charge of these companies.

Reply on news.ycombinator.com