asdf1Apple’s autocratic CEO suggested a possibly illegal deal with the head of Palm two years ago, according to a report by Bloomberg, under which Palm and Apple would stop poaching each other’s employees. The two companies, five miles apart in Silicon Valley, have a history of sniping star staffers from one another.

Jobs allegedly made the proposal in August 2007, shortly after the first iPhones went on sale, to Palm’s CEO at the time, Ed Colligan (pictured). Palm had begun working on its iPhone competitor, the Pre. According to records obtained by Bloomberg, Colligan responded to Jobs, “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal.”

Legal experts consulted by Bloomberg agreed that such an agreement could violate anti-trust laws, and would at the least attract the attention of the Department of Justice.

[Photo: Bloomberg]