Apple and Google had employee non-poaching agreement. That's over now.

TechCrunch's sources at Google have informed them that Apple and Google had a no-poach employee agreement going on over the years that Google's Eric Schmidt was on the board of directors at Apple.  "This was not a written agreement, and was considered non-official, but it was well-known and followed within the recruitment division of Google, we’re told."

Google and Apple have been investigated by the DOJ for sharing board members which could theoretically have the byproduct of this type of behavior.

Interestingly, now that Schmidt is off of Apple's board, the "gentleman's agreement" may now be off, according to MG Siegler.

He continues:

To be clear, this unwritten agreement was that Google would not go after Apple employees, and vice versa. However, employees of both companies were free to apply to the other company on their own, we’re told. That’s a small, but important difference as the practice of going after other company’s talent, also known as “poaching”, is considered to be an important component of healthy competition in the market. That’s why the Justice Department is looking into it.

There has been a flurry of events over the past year which indicate that Google and Apple's relationship, while strong, might be deteriorating.  Eric Schmidt mentioned that Google kept multi-touch off of the Android G1 "At Apple's request".  They also didn't seem to mind too much when their Latitude and Voice applications for iPhone got pulled and simply said that they'd build web versions.  The Voice application rejection also got the FCC involved again, sending requests to Apple, Google and AT&T for clarification.

For what it is worth, the Feds have indicated that Eric Schmidt stepping down from Apple's board would not stop their investigations.

Update: they've recieved the email below seeminglyconfirming such an agreement was in place.

From: XXXXX XXXXX <XXXXX@google.com>
Date: XXXXXXX XX, 2008 X:XX:XX AM PDT
Subject: Re: Google Opportunities- Follow up email…

Thanks for getting back to me.  I don’t believe that we have been in
contact previously - apologies if I am wrong about this.

From your reference to the [APPLE DIVISION], I take it that you are
currently working there.  If this is the case, we will not be able to
proceed with your application.  Google has an agreement with Apple
that we will not cold call their staff.  If you are not currently
working at Apple and are interested in learning more about [A GOOGLE DIVISION]
please let me know and I would be happy to chat with you.

Thank you again for returning my email.