The Justice Department is investigating whether large tech companies illegally conspired over employee poaching. It's an open secret in the Valley that tech companies have agreements not to actively recruit one another's workers; Kleiner Perkins partner Randy Komisar called these "gentlemen's understanding[s]" in the New York Times today. It appears the Justice Department may have finally decided to make an issue of the practice on antitrust grounds.

If that's the case, some of the largest tech companies are at risk. The Times quoted a former Google recruiter saying the company distributes a list of companies whose workers cannot be approached. Then there's the email:

A December 2007 e-mail message written by a Google recruiter and obtained by The New York Times suggests that the company might have had an agreement with Apple on recruiting.

Laura Sheppard, a contract recruiter at Google, sent the e-mail message to a job candidate asking him to put her in touch with another potential candidate. "It is a bit touchy since he works for Apple," Ms. Sheppard wrote, adding that Google had "a nonsolicit agreement with them."

Google declined to comment on its hiring practices or on the e-mail message, whose authenticity could not be independently verified.

There you have it: When it comes to immigration controls or the taxation of stock options, tech honchos are all about the free market. But when it comes to the sort of competition that most benefits your average Silicon Valley worker — competitive hiring — suddenly they turn into feudal lords. Is that really so "gentleman"ly?

[Times]

The Washington Post's anonymous sources said the Feds are investigating whether the firms illegally negotiated "the recruiting and hiring of one another's employees," in violation of antitrust law.

Silicon Valley companies have been known to compete fiercely for top talent, including immigrant engineers. When Google hired computer scientist and former Carnegie Mellon professor Kai-Fu Lee away from Microsoft, Microsoft CEO Steve Ballmer was famously said to have thrown a chair across the room in anger.

The upshot of competition for immigrant workers is higher wages. Free marketeers who advocate for more H1-B worker visas, like the American Enterprise Institute, should know that better than anyone.

Logically, then, if tech companies suppressed competition for H1-B visa holders, they were retarding immigrant income growth. By treating workers like so much property, they would have inhibited the very prosperity they claim to support.

Tech companies wouldn't talk to the Post about the investigation. But they should reverse that chance as soon as they can: The Valley's image as a center of immigrant wealth and opportunity is among its strongest political assets.

(Pic via)

Mavinkurve is the star of a piece by Matt Richtel on immigration: He won an H-1B visa to work in America for Google, scored big in that company's 2004 IPO, but then fell in love with Samvita Padukone, an India-born woman who couldn't get a permit to work in the U.S. So she got a work permit in Canada, and Mavinkurve relocated to Google's Toronto office. He has to fly a lot, and boy are his arms tired!

That's the sum of the argument the article makes for liberalizing immigration rules. If it sounds weak, that's because it's almost a complete retread of an article which appeared last year in The American, the journal of the American Enterprise Institute, a pro-free-markets think tank.

The argument over liberalizing immigration is kind of stupid. Yes, on the one hand, American companies should hire more American workers. But have you met any American workers lately? Lazy and surly, the lot of them. The number of American college students studying science and engineering has been plummeting for years. Only recently have students started to figure out that studying computer science might be a good idea.

No wonder companies like Google and Microsoft want to hire people like Mavinkurve, who are genuinely excited about living in this country and writing software. So excited that they're willing to put up with any number of insults.

For example: In 2003, as a student at Harvard, the founders of ConnectU had Mavinkurve write code for their then-nascent social network. That group, which included wealthy Olympic-rower twins Cameron and Tyler Winklevoss, then brought on a kid by the name of Mark Zuckerberg to do additional work.

Next thing they knew, he'd launched a remarkably similar site called TheFacebook.com, which ConnectU's founders believed was built on their site's code. Lawsuits ensued, which Facebook settled last year for $65 million.

The Times article described Mavinkurve as having "helped lay the foundation for Facebook" — which can't possibly be true, unless the newspaper is accusing Zuckerberg of having used Mavinkurve's code in his website. Don't feel too bad for Mavinkurve, though: We hear he got a piece of the ConnectU settlement. Now if only he could get his wife a green card.

(Photo via Sanjay Mavinkurve)

An ode to the military superiority of these United States can only exacerbate tensions with cheap creditor and chip fabricator China and cause the relatively cosmopolitan diplomats in Europe and the Middle East to shake their heads and hard currency in consternation. We hear, second hand, that it was all Calacanis's idea, but Arrington is as much to blame all the same.

You can guess how immigrant entrepreneurs must have felt when they clutched their H-1B visas tightly to their breast — not to mention the service staff at the venue working for subcontractor wages that may or may not be on the books. Please, somebody definitively reveal this as a prank in the comments, because we're saddened and perplexed. (Photo by Frank Gruber)

• Program Manager: $86,000
• Tester: $95,000
• Developer: $110,000
• Developer: $117,000
• Technical Writer: $129,000

Then again, maybe they know better than to join Team Redmond's corporate culture, which imposes a glass ceiling on anyone who doesn't have an MBA. And of course it doesn't include the underpaid service workers cleaning Valley bathrooms and undocumented employees in Valley kitchens.

(Photo by Marc Smith)

In the video above from last year, attorneys from law firm Cohen & Grigsby detailed how the firm suggests a minimum of job opening ads are placed in markets where it's unlikely a qualified applicant will apply, so few are received. The firm also provides the company with a checklist which the employer can use to quickly process — and reject — any applications it may receive so that the company can permanently certify the foreign national. If a citizen passes that test, there are further tricks to making sure something arises from the interview process that disqualifies them. Disqualifying Americans also works in the favor of companies overall, since it allows them numbers to cite when complaining about the need to raise immigration quotas and expedite the process.

Fragomen is citing the First Amendment and due process in arguing that it should be allowed to offer counsel to employers. Meanwhile, up to 3,000 applications are on hold pending the investigation.

Pablo goes on to argue that if it was left up to U.S.-born talent, great software like Orkut might never have been developed. There you go!

In a follow-up, Computerworld reports Google PR is tap-dancing around the question of whether the 90 workers denied H-1B visas were actually denied any job at Google or just U.S.-based jobs. "As a company with a global presence, we're fortunate enough to be able to have employees work for us in other countries if they're not permitted to stay in the U.S.," a Google spokesperson emailed. "That said, many of our core products are created and improved upon here. We also believe that worker satisfaction is higher when employees can work in the location they prefer." So there you have it: According to Google, it's not applying for H-1B visas because it needs to have its workers in the U.S. It's just doing it for fun.

Nice timing. Fragomen keeps its client list close to the vest, but managing partner Austin Fragomen also chairs the American Council on International Personnel, where he leads a Who's-Who-of-High-Tech Board that includes execs from Intel, HP, IBM, Sun and Oracle.

But this week's SEC filing painted a different picture of orkut, as Google warned investors that its "ability to generate revenue from services in which we have invested considerable time and resources, such as YouTube, Gmail, Orkut and Google Checkout" poses a risk to the company. Buyukkokten, meanwhile, has made enough off Google to buy a three-story apartment in San Francisco and hire male strippers for a birthday party.

the relaxation of H-1B immigration quotas

Matloff compared the ratio of the prevailing wage for positions to be filled by H-1B applicants and the wages paid to accepted immigrants, which he calls the "Talent Measure," or TM. For instance, under H-1B rules, applying companies must state a prevailing wage for the position they are trying to fill and prove that they can't find qualified American employees to work for that much. Companies must then pay accepted applicants at least that wage. So by definition, an H-1B immigrant will have a TM of 1.0.

Matloff's thesis rests on the idea that truly innovative workers would have a higher TM, as the competition for their talents should reward them accordingly if they are truly above-average applicants in the talent pool. To bolster his argument, he points to the disparity between the TM scores of Indian (1.01) and Chinese (1.05) applicants to those of Canada (1.12) and Germany (1.14).

Applicants from Asian countries are not necessarily more or less innovative than applicants from North America and Western Europe — but they are often willing to work for less than what Americans would consider for the same position. One of the ways that companies game the system is by stating a lowball prevailing wage, and then when no qualified citizens apply because the salary isn't competitive, it's easier for the company to demonstrate to officials that the market is demanding more foreign tech workers than the local labor pool can supply.

Where the paper veers off into latent racism is in Matloff's presentation of H-1B supporter arguments that suggest the American education system isn't producing enough science and math specialists — what he calls the "Johnnie can't do math" argument.

Even though it was mainly "Johnnie," rather than Arvind or Qing-Ling, who originally developed the computer industry, and even though all major East Asian governments have lamented their educational systems' stifling of creativity, the lobbyists have convinced Congress that the industry needs foreign workers from Asia in order to innovate.

"I don't actually have that data at my fingertips," was Bock's reply. "I apologize." Ludicrous. Google runs on numbers. Had that been Bock's answer in a presentation to Google CEO Eric Schmidt, he would have been frog-marched out of the Googleplex by security. Let me venture a guess here: Bock knew the figure, at least approximately, and realized it was embarrassing. Recently, Google itself has provided evidence of this.

Forward to 55:09 in the clip above to check out the size and makeup of the audience at a Google Talk sponsored last month by what Bock characterized as the "very strong" Black Googler Network. Judging by the crowd BGN drew to a talk by Ralph Ellison biographer Arnold Rampersad, Google's dominant ethnic group is the invisible man.