UPDATED: Google begged Steve Jobs for permission to hire engineers for its new Paris office. Guess what happened next...
Today I'm in San Jose, attending a hearing in the salary fixing lawsuit brought against Apple, Google and other tech giants. I'll have more on that soon.
In the meantime, one the most interesting misconceptions I’ve heard about the 'Techtopus' conspiracy is that, while these secret deals to fix recruiting were bad (and illegal), they were also needed to protect innovation by keeping teams together while avoiding spiraling costs.
That was said to me, almost verbatim, over dinner by an industry insider, who quickly understood he’d said something wrong— “But of course, it’s illegal, so it’s wrong,” he corrected himself.
The view that whatever Jobs and Google did to deny workers wages and lock up talent was necessary for innovation is likely much more widely held than publicly uttered. And yet, all the evidence in the pre-trial demonstrates the very opposite: That the non-solicitations stifled innovation.
A perfect example of this can be found in emails (Update: embedded below) and deposition testimony which have emerged, and been reviewed by PandoDaily, in the run up to the trial. The episode occurs in the spring of 2006, just a year after Google and Apple first forged their core secret non-poaching agreements.
In late 2005, Jean-Marie Hullot, one of Apple’s (and Steve Jobs’) most valued longtime programmers going way back to Jobs’ NeXT Computer startup, resigned from Apple. Hullot worked for Apple out of Paris, and when he left the company at the end of 2005, his team of four engineers resigned with him.
A few months later, Hullot and his team of engineers negotiated a deal with Google to set up a new Google engineering center in Paris. The “last step”—as Hullot called it—was to get Jobs’ blessing.
On March 28, 2006, Alan Eustace, Google’s senior vice president of engineering, sent an email to Jobs and cc’d Google co-founders Sergey Brin and Larry Page, as well as Intuit chairman/Apple board member/Google “senior adviser” Bill Campbell:
Google would like to make an offer to Jean-Marie Hullot to run a small engineering center in Paris. Bill [Campbell], Larry [Page], Sergey [Brin] and Jean-Marie believe it is important to get your blessing before moving forward with this offer.
Jean-Marie has worked very hard to leave Apple on the best possible terms, and has agreed to abide by the terms of his non-solicit and non-compete clauses. He loves Apple, and would not do anything to hurt you or the company.
Google’s relationship with Apple is extremely important to us. If that relationship is any way threatened by this hire, please let me know and we will pass on this opportunity.
Google, Inc. First, a word about Jean-Marie Hullot: Born and schooled in France, Hullot got Steve Jobs’ attention early on, and was tapped to join Jobs’ NeXT computer in the mid-1980s. Hullot rose up to VP of Engineering when NeXT was bought out in 1996, left to travel. In 2001, Jobs flew to Paris to convince Hullot to join Apple, which he did, as CTO of Applications running an Apple center in Paris for the next four years. Hullot’s team was important in laying the groundwork for the iPhone, but when Jobs decided to pull the trigger on the phone, the project moved to Silicon Valley with all of Apple’s attendant secrecy, a move Hullot didn’t want to make again. So he left Apple, along with his four engineers.
Now we cut to early April 2006, this extremely well respected tech engineer and his team have completed negotiations with Google to set up a Google engineering center in Paris, and -- even though none of the people involved still worked for Apple -- everyone’s waiting for Jobs’ blessing.
A week went by; no answer from Jobs. Hullot wanted to know what was happening.
Google’s senior VP for engineering, Alan Eustace, called Jobs several times, but Jobs didn’t take the calls. Finally, on April 5, Eustace wrote to Hullot:
Steve didn’t respond to my email, but Bill Campbell [Intuit chairman, Apple director, “coach” to Jobs and Schmidt] promised to call him and verify that we are OK. He’s on the board at Apple and Google, so Steve will probably return his call :-) Hullot replied immediately, optimistic and good-humored, worrying more about his loyal team of engineers who’d remained unemployed during the months since leaving Apple to do the new Google project:
I was not expecting this last step to be the easiest one...Let see how it goes with Bill Campbell’s help.Hullot decided to take his wife and two children on a two-week trek through the Himalayas, and hoped he’d get the good news by the time he returned to Paris:
If there is a positive outcome with Steve during this period – which I hope! – I suggest you send offers to the other guys as soon as you can without waiting for me to be back. It has already been a really long stretch from them between 2 employments and I fear we will start to lose some soon. Let me know by email as well as soon as you know, I might be able to connect to the Internet.A few days later, on April 9, Bill Campbell took his regular Sunday walk with Steve Jobs. That same day, Jobs finally responded to Google’s Alan Eustace’s email. It was curt, and maybe even slightly menacing:
What would Jean-Marie be working on? We would have a problem if it is related to cell phone handsets, etc.
Steve Eustace immediately responded to Jobs by promising that Google would bend over backwards to make sure that whatever new tech projects were set up in Paris, nothing would violate the spirit of their secret illegal wage-theft agreement.
Eustace thanked Jobs profusely for answering him two weeks late, assuring him, “Jean-Marie will not be working on anything to do with cell phone handsets,” adding:
Jean-Marie has lots of talents, and we have lots of projects, so I’m certain that we can find an area where there is no conflict. I’d be happy to run the proposed general project area by you at that point, just to make sure that it doesn’t create a conflict. Would this be OK with you?Jobs replied,
That would be fine with me.Jobs meant he was fine with having the proposed project run by him for his approval. As Eustace would soon learn, he certainly wasn't giving his blessing for the hiring.
Two weeks later, Jean-Marie Hullot returned from the Himalayas with his wife and children. Eustace wrote Jobs again on April 25, 2006, asking for his approval, but this time presenting the case as a more personal matter, one of trust and guilt...
Jean-Marie did not believe that you would object to his hiring these specific people, as long as we don’t hire anyone else from Apple in Paris, but I wanted to confirm this with you, before I opened the office, or any of these people start.
Are you OK with this? If not, I’m willing to cancel the entire thing. If you are OK with it, I’ll make sure to run the project area by you to make sure that there are no conflicts of interest with work that they did at Apple. It's worth taking a moment to reflect, again, on what was happening here: in a field as critical and competitive as smartphones, Google's r&d strategy was being dictated, not by the company's board, or by its shareholders, but by a desire not to anger the CEO of a rival company.
Still, the flaw with Eustace’s rhetorical strategy was that a personal appeal like this only works on a person with a conscience. Jobs’ response was casual and curt and immediate:
We’d strongly prefer that you not hire these guys.
Steve Eustace passed the news on to Hullot, in an email that should dispel any notion that these agreements had anything to do with innovation—instead, they had everything to do with stifling competition for the benefit of the companies. Notice Eustace’s distanced, cold language towards a legendary tech innovator, Jean-Marie Hullot, compared to the obsequiousness the Google senior VP shows to Steve Jobs, who wasn’t even cc’d:
Steve is opposed to Google hiring these engineers. He didn’t say why, and I don’t think it is appropriate for me to go back for clarification. I can’t risk our relationship with Apple to make this happen over his objections. If you have any good ideas (or even bad ones), please let me know. Right now, it looks like if you want to keep this great team together, it will have to be at another company. Hullot could barely respond. “Let me sleep on this,” he wrote.
He slept. Nothing could be done. A month later, in late May 2006, Google’s Alan Eustace formally cancelled the Google project in Paris. In an email to Jobs, which Eustace forwarded to Larry Page, Sergey Brin, and Bill Campbell, he wrote:
Based on your strong preference that we not hire the ex-Apple engineers, Jean-Marie and I decided not to open a Google Paris engineering center. I appreciate your input into this decision, and your continued support of the Google/Apple partnership. Innovation would have to take a seat far to the back of what was more important for the companies’ self-interest: stifling ruinous competition which could threaten both firms, who stood more to gain by securing their dominant positions in their sectors of the tech industry than they did by “ruinous competition”—to borrow an old phrase of the railroad barons, when they formed secret pools and “gentlemen’s agreements” to escape the ravages of competition.
Indeed, Google’s and Apple’s profits, and their domination over their sectors, only expanded and grew. Sacrificing innovation for that was a no-brainer.
Meanwhile, Jean-Marie Hullot spent the next few years traveling to Bhutan and around Asia with his wife and children. He returned to the technology world again—creating apps for Steve Jobs’ last big toy, the iPad.
Lawyers in the ongoing class action lawsuit against Apple, Adobe, Google and Intel questioned Sergey Brin last year about the demise of Google’s planned Paris project. Brin was asked to describe Steve Jobs’ view on hiring in Silicon Valley, to which Brin responded:
“I think Mr. Jobs’ view was that people shouldn’t piss him off. And I think that things that pissed him off were – would be hiring, you know – whatever. Certain people that he deemed important at the time or close to him or knew or, you know, who knows what would trip his emotions exactly, but I think this situation of Jean-Marie specifically is because he was close to Jean-Marie in some way. I don’t personally know their history, but I believe they were friends or something.”With friends like Steve Jobs...
Neither Apple or Google has responded to multiple requests for comment on our coverage of the 'Techtopus' lawsuit.
Follow all of our Techtopus coverage here.
Documents cited in this article:
[Photo credit: Original photo by Ben's Blog (Creative Commons), modified by Hallie Bateman for Pando]