U.S. Justice Dept. investigates Silicon Valley companies’ hiring policy

According to the Washington Post and New York Times, both citing sources familiar with the investigation, Google, Apple, Yahoo, Genentech and several other tech companies are subject to a probe by the U.S. government to determine if the companies agreed not to hire away top talent from one another. Analysts say non-compete agreements are often signed with employees in response to lawsuits surrounding high-profile executives switching companies. Several of those cases have popped up recently, with companies complaining that top talent could leak secrets to competitors. In April, EMC sued Hewlett-Packard for swiping away its storage head, Dave Donatelli. And late last year, IBM sued Apple for hiring away its vice president, Mark Papermaster. Non-compete contracts with employees are perfectly legal, but experts say that a similar agreement between two or more companies could constitute a violation of federal antitrust laws. A deal between a dominant search company and a dominant telecom company to not hire away one another's employees, for example, could help solidify each company's position in their respective markets. Among the famous cases, Microsoft was fined $1.2 billion by the European Commission in February 2008 after it was found to be pricing out rivals and refusing to comply with the court's 2004 antitrust decision. In that earlier case, Microsoft was fined $650 million. Last month, European Union antitrust regulators fined Intel Corp. a record $1.5 billion for unfairly paying computer makers to delay or even cancel products that contained chips made by rival AMD.