What Steve Jobs and Eric Schmidt actually said when Google built Android

Long before Apple and Google became fierce rivals in the smartphone era, an exchange between Steve Jobs and Eric Schmidt revealed how seriously Silicon Valley leaders viewed the battle for engineering talent. According to a report by Reuters, court documents later made public showed jobs personally asked Google to stop recruiting Apple employees, prompting swift action from Google’s leadership. The emails that surfaced during the civil litigation involving Apple, Google and several other technology companies accused of conspiring to suppress employee compensation by limiting competition for skilled workers.

As reported by Reuters, when Jobs learned Google had targeted one of his employees, he emailed Schmidt directly, then Google's chairman, saying he "would be very pleased if your recruiting department would stop doing this." Schmidt forwarded the email to colleagues, writing that he believed Google had a policy of not recruiting from Apple and that this was a direct request from Jobs. The recruiting department replied that he should extend apologies as appropriate to Jobs, and the recruiter was fired. Google's senior staffing strategist told Schmidt the recruiter would be fired "within the hour." Schmidt called this an "appropriate response," and said he wanted HR to make a public example of the termination within the group and make it a strong part of new-hire training. Then came the smiley. After Schmidt told Jobs the recruiter would be fired, Jobs forwarded Schmidt's note to a top Apple human resources executive with a smiley face. Jobs did not reply to Schmidt with the smiley, as your headline implies. He sent it to his own HR chief.

The recruiter was not the only one. Judge Lucy Koh wrote that emails showed Schmidt "terminated at least two recruiters for violations of anti-solicitation agreements, and threatened to terminate more." She said Schmidt, Jobs and Intuit chairman Bill Campbell were "key players" in creating and enforcing the agreements. In another episode, Google sought to hire three former Apple engineers for a planned engineering center in Paris. Jobs wrote that Apple would "strongly prefer" that Google not hire them, and Google told him it had scrapped the plan "based on your strong preference." Other emails showed Jobs threatening rivals. Jobs told Palm's then-CEO Edward Colligan that if Palm kept targeting Apple employees, Apple would launch a patent lawsuit. Google co-founder Sergey Brin testified that Jobs had told him hiring one of Apple's people would mean "war," a reference to patent litigation. Shown the smiley email in his deposition, Brin reportedly said, "Wow, Steve used a smiley." Schmidt also seemed aware of the legal risk. When Google's HR director asked whether the no-recruiting policy could be shared with others, Schmidt said he preferred it be shared verbally because he did not want to create a paper trail he could be sued over later.

The lawsuit, filed in 2011 on behalf of more than 64,000 workers, alleged the agreements stopped employees from getting better job offers elsewhere. In 2014, Judge Koh rejected a proposed $324.5 million settlement, saying there was "substantial and compelling evidence" that Jobs was "a, if not the, central figure in the alleged conspiracy." The companies later agreed to a larger deal. The final figure was A$613.9 million, or roughly US$415 million. Schmidt later testified about Jobs' influence. "Steve was unhappy," he said, "and Steve's unhappiness absolutely influenced the change we made in recruiting practice."