Steve Jobs threatened Palm with litigation over hiring practices, court hears

Stop hand

Apple's late CEO and co-founder Steve Jobs threatened the head of Palm with a patent suit if he did not agree to an arrangement banning the two firms from poaching each other's staff.

The revelation came as part of an on-going US civil court case, in which seven tech companies, including Apple, Adobe systems and Intel, are accused of colluding to keep wages artificially low by agreeing not to recruit people from their companies.

If you choose the litigation route, we can respond with our own claims

The threat was allegedly made by Jobs to Edward Colligan, who was CEO of Palm at the time, in 2007.

According to a sworn statement from Colligan, Jobs "also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple's many patents."

Colligan claims he told Jobs the plan was likely to be illegal and that Palm was not intimidated by the threat.

"If you choose the litigation route, we can respond with our own claims based on patent assets, but I do not think litigation is the answer," Colligan told Jobs.

The current civil suit is being brought by employees of the companies, who claim to have been adversely affected by these no-poaching agreements.

It follows a 2010 antitrust case brought by the US justice department against Google, Apple, Adobe Systems, Intel, Intuit and Pixar, which also centred on an alleged no-call policies.

The case was settled, but the companies are now prohibited from agreeing not to recruit each others' employees.

Last week, US district judge Lucy Koh, who is hearing the case in San Jose, ordered current CEO Tim Cook to give a deposition in the case.

Cook, Google chairman Eric Schmidt and Intel CEO Paul Otellini will all be deposed before the end of February, before Koh decides whether or not the case will be heard as a class action suit.

Jane McCallion
Deputy Editor

Jane McCallion is ITPro's Managing Editor, specializing in data centers and enterprise IT infrastructure. Before becoming Managing Editor, she held the role of Deputy Editor and, prior to that, Features Editor, managing a pool of freelance and internal writers, while continuing to specialize in enterprise IT infrastructure, and business strategy.

Prior to joining ITPro, Jane was a freelance business journalist writing as both Jane McCallion and Jane Bordenave for titles such as European CEO, World Finance, and Business Excellence Magazine.