Steve Jobs was reportedly very angry with ex-Apple executive and now Palm CEO, Jon Rubenstein, for recruiting Apple engineers to work for Palm. Jobs apparently got so mad at one point, he and Rubenstein end up in a shouting match over the situation. In communications with former Palm CEO Ed Colligan, Jobs said “We must do whatever we can to stop this.”

However, Colligan rebuffed Jobs’ proposal to not hire employees from each other companies, calling the deal “wrong and likely illegal.”

Palm hired Rubenstein to work on future smartphones for the company, eventually leading to the release of the Palm Pre earlier this year.

Palm and Apple have been waging a battle over Palm’s use of iTunes to transfer music to the Pre for the last couple of months. Apple warned that it would disable the ability for the Pre to be recognized, but after do so, Palm was able to get the device working again.

The news of a proposed secret deal to stop hiring between companies doesn’t come at a good time for Apple. The U.S. Justice Department is reportedly investigating possible collusion in hiring among technology companies.