Apple, which has poached employees employees from Palm in the past (including during the development of the various iPods and iPhone), nonetheless, was not to happy about the launch of the Pre.  It tried to block the phone out of iTunes only to see Palm outmaneuver it again and let the Pre back in. 

Back in 2007, Apple's Chief Executive Office, Steve Jobs, reached out to former Palm CEO Ed Colligan and proposed a moratorium on the two companies stealing each other's employees.  Mr. Colligan reportedly rejected Mr. Job's proposal, saying that it was not only wrong, but "probably illegal". 

Palm's smartphone team is headed by Jon Rubinstein, a former Apple veteran who had headed the company's pivotal iPod unit.  Mr. Rubenstein was promoted to Palm's CEO in June, succeeding Mr. Colligan.

Steve Jobs would not comment on whether he proposed a secret arrangement with Palm.  He would only say that Apple has more patents and money than Palm if the companies go to war legally.  He perhaps was referring to Apple's patent on multi-touch technology, which it has threatened to sue Palm and others with in the past.

If Mr. Jobs did propose such an arrangement, it appears it would likely be illegal.  According to Donald Russell, an antitrust lawyer who worked at the Justice Department for more than two decades before going into private practice in Washington, "It's a form of competition that is usually protected by antitrust laws that prohibit agreements that restrict competition."

Apple and Palm, according to a Reuters source, are under investigation by the U.S. Justice Department for collusion in hiring.  Neither company would acknowledge that they were being investigated, though.

If Apple did reach out to Palm for such an arrangement, it would also have been a rather ironic move as Apple itself has poached employees from many other tech giants over the years.  Most recently, Apple hired IBM's Mark Papermaster to replace the departing Tony Faddell as iPod team leader.  IBM fought the move, saying Mr. Papermaster violated the terms of his contract.  Apple and IBM have since reached a settlement, allowing Mr. Papermaster to go to work at Apple.