As it turns out, the relationship between Apple and Palm is even less amicable than we already thought it to be. Bloomberg got their hands on communications between Ed Colligan, then-CEO of Palm, and Steve Jobs in which Jobs made a proposal in which the two companies would promise to refrain from hiring each other’s employees. Colligan, however, rejected the proposal, calling it wrong and “likely illegal”.
This proposal was offered by Jobs to Colligan in August 2007, when Jon Rubinstein, who lead the iPod devision when he left Apple in 2006 and who had worked with Jobs for over 15 years, joined Palm to help in reinventing the company. Jobs told Colligan that he was concerned Rubinstein would hire Apple employees. “We must do whatever we can to stop this,” Jobs said in the communications.
Exact details of the proposal are unknown, but Jobs did say that “Apple had patents and more money than Palm if the companies ended up in a legal fight”. An Apple spokesperson declined to comment, and Steve Jobs did not respond to an email from Bloomberg. Palm did not comment either.
According to the communications, Colligan stated he thought about “offering hiring concessions”, but in the end, he decided against it. “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,” he told Jobs.
Agreements like the one proposed by Jobs are usually prohibited by antitrust laws, because they hinder competition. “It’s a form of competition that is usually protected by antitrust laws that prohibit agreements that restrict competition,” explains Donald Russell, an antritrust lawyer who worked at the Justice Department for more than twenty years.
A similar possible deal between Apple and Google is currently under investigation by the DOJ, and Daniel Rubinfeld, a former deputy assistant attorney general for antitrust, advises the DOJ to investigate this Palm-Apple issue as well, despite the fact it fell through. “If I were at DOJ, I would definitely be interested,” said Rubinfeld. The DOJ declined to comment.