To: H-1B/L-1/offshoring e-newsletter Sun Nov 18 12:41:29 PST 2012 I often remark that if I were to assert that, say Microsoft, exploits every loophole it can find in the tax code, no one would be shocked. But if I say Microsoft exploits loopholes in immigration law, the response is sometimes, "No, firms like Microsoft would never engage in such sneaky behavior." Such is the effectiveness of the PR campaigns by various vested interests (the tech industry, the American Immigration Lawyers Assocation, the universities and so on) to portray H-1B as a noble program. Well, maybe the enclosed article will bring some skeptics one step closer to reality. Here we see alleged wrongdoing not in taxes, but in hiring, right in the area in which Microsoft et al would supposedly never engage in sneaky behavior. Moreover, in this case, it's not use of loopholes; it's illegal behavior. In other words, Silicon Valley firms are so intent on saving in labor costs that they are willing to run the risk of violating the law. No wonder they love the H-1B and employer-sponsored green card programs so much, under which they can save lots of money while staying fully compliant with the law. Again, it's just allegation at this point, but as the article notes, other major firms admitted to it earlier. And interestingly, Meg Whitman is specifically named in these accusations. This is the same Whitman who was the California Republican candidate for governor recently, and who praised the H-1B program when asked at a fund raiser by a reader of this e-newsletter. It should be pointed out that this is just the tip of the iceberg. I was once told, by a government worker who was closely connected to all this, that Silicon Valley firms meet once a month to exchange salary and other hiring information. I later learned the existence of a Silicon Valley organization named Wings, consisting of the HR directors of a number of major tech firms. (By the way, see http://heather.cs.ucdavis.edu/Archive/HRCirclesTheWagons.txt for an interesting related story.) I think it's clear that such organizations do more than talk about the latest HR software tools; they seek ways to hold down labor costs, legally or not. Remember too another point I've emphasized concerning H-1B and green cards: For many employers, the de facto indentured nature of the foreign workers is even more important than lower wages. It's a big blow when an engineer leaves in the midst of a major project, and the foreign worker programs solve that by making it very difficult for the worker to leave. Those programs similarly reduce the risk of exposing company secrets (whether deliberate or inadvertent). Clearly, the anti-poaching actions have the same motivations--to hold down wages and to handcuff workers who might be consisering leaving. Hopefully those who've been mesmerized by the PR campaigns will now see that tech firms are no nobler on labor issues than they are on the tax code. Norm http://www.mercurynews.com/business/ci_22012192/feds-sue-ebay-secret-anti-poaching-deal-intuit Feds sue eBay over secret anti-poaching deal with Intuit By Howard Mintz San Jose Mercury News hmintz@mercurynews.com Posted: 11/16/2012 02:01:34 PM PST The U.S. Justice Department on Friday accused eBay and former CEO Meg Whitman of conspiring with Intuit executives to not poach each others' employees, adding to the list of Silicon Valley companies linked to similar antitrust allegations. In a lawsuit filed in San Jose federal court, the federal government alleges that eBay and Intuit entered into an "illegal agreement" between 2006 and 2009 that prevented the rivals from raiding their respective workforces and damaging opportunities for employees at the two companies. Federal regulators say the deal specifically barred eBay from recruiting Intuit workers to the point that eBay executives were instructed to throw out the résumés of Intuit candidates. California Attorney General Kamala Harris also sued eBay under state law Friday, based on the same allegations. eBay denied wrongdoing and defended its hiring practices, calling the state and federal lawsuits "wrong." "The DOJ and state attorney general are taking an overly aggressive interpretation in their enforcement of antitrust law in this area," eBay spokeswoman Lara Wyss said. "eBay will vigorously defend itself." The lawsuit specifically alleges that Whitman and Intuit founder Scott Cook "were intimately involved" in enforcing the "anticompetitive agreement." "eBay's agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company," Joseph Wayland, the Justice Department's acting antitrust chief, said in a statement. Intuit was not named in Friday's lawsuit because the company already reached a settlement regarding the same allegations in a previous Justice Department antitrust case. Adobe, Apple, Google, Intel and Pixar also joined in that 2010 settlement. The tech companies still face separate civil antitrust lawsuits brought on behalf of employees. U.S. District Judge Lucy Koh earlier this year allowed the case to proceed, saying there is evidence the agreements "resulted from collusion, not from coincidence." eBay is not a defendant in that case, but Joseph Saveri, a lawyer for the employees, said he is investigating the government's new claims. Howard Mintz covers legal affairs. Contact him at 408-286-0236; follow him at Twitter.com/hmintz.