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Lawsuit accuses Apple, others of 'conspiring' to keep employee wages low

post #1 of 51
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A new class-action lawsuit takes aim at Apple, Google, Intel and other tech companies for allegedly "conspiring to suppress compensation of their employees."

The complaint was announced in a press release on Wednesday by the law firm Lief, Cabraser, Heimann & Bernstein. The suit was filed by Siddharth Hariharan, a former software engineer at Lucasfilm, one of the companies named in the suit. Other parties include Adobe, Intuit and Pixar.

"My colleagues at Lucasfilm and I applied our skills, knowledge, and creativity to make the company an industry leader," Hariharan said. "It's disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees."

The new lawsuit alleges that the companies in question agreed to not actively recruit each others' employees, and promised to provide notification when making an offer to another company's employee. The suit also claims that the companies agreed to cap pay packages offered to prospective employees at the initial offer.

The complaint states that the alleged alliance began in 2005 with Lucasfilm and Pixar, and continued until at least 2009 with all defendants in a so-called "no solicitation" agreement. It asserts that the "conspiracy" decreased competition for labor among the competing companies.

"Competition in the labor market results in better salaries, enhanced career opportunities for employees, and better products for consumers," attorney Joseph R. Saveri said. "We estimate that because of reduced competition for their services, compensation for skilled employees at Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar was reduced by 10 to 15 percent. These companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct."

The complaint, filed in a California Superior Court in Alameda County, seeks damages and lost pay for employees believed to have been affected by the companies' alleged actions.

In 2009, it was revealed that Apple and Google had an agreement that the two companies would not poach each others' employees while Eric Schmidt, then the search giant's chief executive, served on both boards. The "gentlemen's agreement" was said to prevent recruiting of other employees, but workers were free to apply at other companies. It eventually led to a U.S. antitrust probe of both Apple and Google.

An investigation conducted by the U.S. Justice Department found that Ed Colligan, a former chief executive of Palm, rejected an anti-poaching offer allegedly made by Apple co-founder Steve Jobs. In communications obtained, Colligan reportedly told Jobs that his proposal was "likely illegal."

Jobs allegedly told Colligan he was concerned when Jon Rubinstein, Apple's former senior engineering vice president, was named executive chairman of Palm. In the correspondence, Jobs reportedly said he was worried that Rubinstein would recruit existing Apple employees.
post #2 of 51
Putting his name out their as a person who files high-profile lawsuits against potential employers will only make it more difficult to get a job in the future.

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post #3 of 51
A few weeks ago investors were disappointed that Google gave their employee's raises. Not sure if that means "no caps" but whatever.
post #4 of 51
It sounds like career suicide for him alright but it sounds like he has a point.
post #5 of 51
If he wins, which is quite likely based on other settled lawsuits like this recently in California he probably won't care. All it takes is a memo or email trail and this is an exercise enroute to a quiet settlement.
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post #6 of 51
"Must. Not. Fight. People will be mad at you."

Good on him for fighting.

What these companies are doing is squashing the free market of wages.
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post #7 of 51
Quote:
Originally Posted by 8CoreWhore View Post

"Must. Not. Fight. People will be mad at you."

Good on him for fighting.

What these companies are doing is squashing the free market of wages.

Oh, yeah. That's why wages are so low for computer professionals.

Wages in Silicon Valley are HUGE compared to almost any other occupation requiring a similar level of training and skill. And that's even before you start looking at the thousands of Silicon Valley Millionaires.
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post #8 of 51
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Originally Posted by jragosta View Post

Oh, yeah. That's why wages are so low for computer professionals.

Wages in Silicon Valley are HUGE compared to almost any other occupation requiring a similar level of training and skill. And that's even before you start looking at the thousands of Silicon Valley Millionaires.

As a computer professional, I'd like to hear you name some other occupations that require a similar level of training and skill that aren't as well paid please.
post #9 of 51
I had heard about the agreement between Pixar and LucasFilm before.

I've finally read about a lawsuit with merit involving Apple. Haven't seen one of those for quite some time.

I would suggest to all the companies to simply settle.
post #10 of 51
I would guess Steve Jpbs salary will now be doubled... to $2 a year.
post #11 of 51
On this topic though I agree... Apple has how many billions in the bank? I can say form experience that they don't pay their employees any more than any regular company. Share the wealth k?
post #12 of 51
The fact is that these companies named in the lawsuit are just the tip of the iceberg in a massive talent scam by high-tech. They go beg congress for more and more H1-B visas for foreign nationals, then they recruit foreign nationals to come to the US under those visas, and in the agreement these individuals sign a contract for a certain wage, which may or may not be below prevailing wages of US citizens and permanent residents.

I've seen H1-B visa holders living five or six together in small apartments using one or two cars for transportation around Silicon Valley. In talking with these colleagues I found that many of them are spending the least possible and sending the bulk of their wages back home.

One result is fewer jobs for qualified citizens and resident aliens because they typically can't do without the higher wage, so they get priced out of a job.

Another result is that one of them wises up and talks to an attorney. Is that person's career toast? Hardly. He'll just return home and end up getting a great job because he has "Silicon Valley" experience on his resume.
post #13 of 51
It will be interesting to see the evidence. But wow, what a broad suit!
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post #14 of 51
Not recruiting from a competitor is not illegal. This happens all over including other forms of engineering. The person in question is free to solicit jobs from any company he wants, and those companies are free to hire him if they want, and they are free to pay him what they think he's worth. He just won't get a cold call from the internal headhunters of the other company.

It cuts both ways, if you actively recruit from your competitor you can get sued for damaging the other company's business. Find their key guy, offer him the moon just to sabotage the other company and delay them somehow.
post #15 of 51
Quote:
Originally Posted by AppleInsider View Post

Jobs allegedly told Colligan he was concerned when Jon Rubinstein, Apple's former senior engineering vice president, was named executive chairman of Palm. In the correspondence, Jobs reportedly said he was worried that Rubinstein would recruit existing Apple employees.

A legit concern, because Steve did exactly that when he left Apple in 1985: he recruited Apple people to join NeXT.

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post #16 of 51
Hmmm -- wonder if this obviously named Indian/Pakistani fellow was hired at a *less than* prevailing engineering compensation rate, due to his H-1B work visa status?

If so, then he was occupying an engineering job slot that likely paid BELOW the rate normally expected/paid to non-H-1B (read: citizens) workers.

Am curious as to his citizenship, and work status.


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post #17 of 51
Quote:
Originally Posted by Suddenly Newton View Post

A legit concern, because Steve did exactly that when he left Apple in 1985: he recruited Apple people to join NeXT.


Did he "recruit them" .... or did they beg SJ .... 'Please ... take me with you .... Apple is doomed' .... or words to that effect ... I wasn't there so I don't know ... were you????
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post #18 of 51
Quote:
Originally Posted by Ecphorizer View Post

The fact is that these companies named in the lawsuit are just the tip of the iceberg in a massive talent scam by high-tech. They go beg congress for more and more H1-B visas for foreign nationals, then they recruit foreign nationals to come to the US under those visas, and in the agreement these individuals sign a contract for a certain wage, which may or may not be below prevailing wages of US citizens and permanent residents.

In the defense industrial contractor tech community, the H-1B hires are required to be payed a certain amount that represents a minimum threshold number that is usually 10%-15% less, in my recollection -- having dealt with this issue in the past. Check the more recent H-1B/FAR law for specifics, as I am quoting from memory, circa 2000 time frame.

For instance -- I was ordered by my boss to reduce my employee costs. Boss set up a visit to an H-1B "body shop," where I interviewed several qualified candidates. I chose two H-1B body shop candidates, and released two of my low-mid level American citizen programmer employees, who each cost me $52K plus full benefits per year. The federal rules required that I pay the H-1B rate of 42K or so, per year, for the H-1B replacements (circa Y2000). However, since I was "renting" the two H-1B programmers, I paid the 42K to the Indian body shop, NOT the H-1B programmers themselves. Secondly, I was also not having to pay for benefits of any sort for these two H-1B programmers, which reduced my overall employee costs further.

After I got to know the two H-1B Indian programmer individuals, they revealed to me that they were only being paid 22K per year by the Indian body shop, presumably with the Indian body shop pocketing the difference from the 42K/yr rate that my organization paid.

Quote:
I've seen H1-B visa holders living five or six together in small apartments using one or two cars for transportation around Silicon Valley. In talking with these colleagues I found that many of them are spending the least possible and sending the bulk of their wages back home.

EXACTLY what my two Indian body shop H-1B programmers told me -- they, too, were living with a third H-1B person, sharing one beater car, and sending their money back to India.

Quote:
One result is fewer jobs for qualified citizens and resident aliens because they typically can't do without the higher wage, so they get priced out of a job.

Yup. And folks wonder WHY companies like Microsoft/Bill Gates and other big American tech corporations whine that they are having a difficult time finding "qualified" American citizen engineering staff -- and WHY computer science and software engineering programs at some number of colleges and universities are finding less interest from rising high-school grads as a potential field of study/career path.

Quote:
Another result is that one of them wises up and talks to an attorney. Is that person's career toast? Hardly. He'll just return home and end up getting a great job because he has "Silicon Valley" experience on his resume.

Disgustingly true.


Niffy
post #19 of 51
Quote:
Originally Posted by Niff Stipples View Post

Hmmm -- wonder if this obviously named Indian/Pakistani fellow ......

Ah. 'Siddharth'. Sounds like ona dem brownies. No difference, could be Indian, Pakistani, Sri Lankan, Bangladeshi, Nepali, Bhutanese, whatever. Just like there's no difference between dem Brits or Icelanders or Norwegians or Canadians or French or whatever. And, no way a Siddharth could be a US citizen -- that's reserved for dem Brits or Icela.... (Never heard of Google either).

/sarcasm
post #20 of 51
Just because you *think* there is some sort of conspiracy preventing you from from getting a raise - does not make it so.

Lots of companies have clauses regarding non-compete or that if I send my tech professionals into your business to do a job that you will not attempt to hire them (generally with some expiration period such as a year). which, as already pointed out, doesn't mean that it cannot or does not happen but rather we two companies have agreed not to engage in a deliberate efforts which could be disruptive to the other as a matter of policy. I would think that finding evidence of intent to commit illegal acts that would be admissible in court would be difficult.
post #21 of 51
Quote:
Originally Posted by alienzed View Post

As a computer professional, I'd like to hear you name some other occupations that require a similar level of training and skill that aren't as well paid please.

ATP licensed regional carrier airline pilots with a few years under their belt versus CDL licensed public transit workers (bus drivers) with a few years under their belt comes to mind. \
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post #22 of 51
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Originally Posted by newbee View Post

Did he "recruit them" .... or did they beg SJ .... 'Please ... take me with you .... Apple is doomed' .... or words to that effect ... I wasn't there so I don't know ... were you????

Well, Apple was still very profitable at that point.

My best guess is that Steve offered them a combination of "you'll get to work on inventing the future of computing" and stock options. I'd imagine working at NeXT would have been a heck of a lot more technically interesting than working at Apple in the 1990s. They essentially invented Mac OS X ten years before it's time while Apple was busy making profits off of maintenance releases (ok, to be fair, there were a couple of interesting products that came out, but nothing as revolutionary as the original MacIntosh or Mac OS X).
 
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post #23 of 51
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Originally Posted by Rot'nApple View Post

ATP licensed regional carrier airline pilots with a few years under their belt versus CDL licensed public transit workers (bus drivers) with a few years under their belt comes to mind. \
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With similar experience, pilots of passenger airplanes make about he same as IT professionals. Some regional carriers underpay new first officers, but a lot of companies pay inexperienced it workers poorly as well.

Keep in mind that pilots of passenger aircraft do not actually work that much, particularly when compared to the hours worked by low-level it workers.

IT is not necessarily high-tech, but he pay sales are close enoug.
post #24 of 51
It would be difficult to prove an anti-competitive cartel/oligopoly as, despite being the major players, the collective software engineering staff of these companies does not constitute the majority or even significant market share. Collectively they still only represent a small percentage of the US software engineering base. This provides more than enough choice for the individual to vote with their feet especially if they are free to approach the other parties themselves.

I hope this guy has a good pension fund already.
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post #25 of 51
Quote:
Originally Posted by alienzed View Post

As a computer professional, I'd like to hear you name some other occupations that require a similar level of training and skill that aren't as well paid please.

How about college professors, research scientists, properly trained musicians I am making about one half of what I was as a computer professional, having chosen to teach college level. Love teaching won't trade it, but tired of hearing the "we don't make enough" whining. And you can compare education levels with a reply in four human languages besides English. (No, Pig Latin doesn't count.)

While I see their point, there is merit to companies agreeing to not head-hunt deliberately from each other. This suit seems to lack substance, however, as a company would be free to publicly post for a position with whatever salary it took to attract qualified applicants, meaning the idea of a salary cap doesn't apply. They just won't fax to other companies, advertising the jobs. Now if they agreed to not hire each other's employees...
post #26 of 51
Quote:
Originally Posted by RobRoy View Post


While I see their point, there is merit to companies agreeing to not head-hunt deliberately from each other.

The point is not whether there's 'merit', the point is whether it's illegal. There's tons of illegal activities in the society with 'merits'.
post #27 of 51
Most Fortune 500 companies regularly review their compensation packages and make adjustments to keep their pay in line with their industry's averages. You could almost call it an (indirect) conspiracy.

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post #28 of 51
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Originally Posted by newbee View Post

Did he "recruit them" .... or did they beg SJ .... 'Please ... take me with you .... Apple is doomed' .... or words to that effect ... I wasn't there so I don't know ... were you????

He recruited them; Apple sued Steve and NeXT, then backed off when they realized all they were doing was giving NeXT free publicity. Oh that John Sculley!

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post #29 of 51
Quote:
Originally Posted by Rot'nApple View Post

ATP licensed regional carrier airline pilots with a few years under their belt versus CDL licensed public transit workers (bus drivers) with a few years under their belt comes to mind. \
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I wouldn't hire a bus driver to be a pilot PERIOD.

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post #30 of 51
Just googled this guy, to the original PR of this case. Doesn't sound like this guy needs a job anymore, he is a CEO of a software gaming company called inEarth (inEarth.com)... So maybe this "paki" will be fine.

"The lawsuit was filed by a former software engineer at Lucasfilm, Siddharth Hariharan. He is also the founder and Chief Executive Officer of InEarth."

I think it is perfect timing, because if this guy was still relying on finding a job, he probably wouldn't be fighting for all those employees..
post #31 of 51
Quote:
Originally Posted by RobRoy View Post

While I see their point, there is merit to companies agreeing to not head-hunt deliberately from each other. This suit seems to lack substance, however, as a company would be free to publicly post for a position with whatever salary it took to attract qualified applicants, meaning the idea of a salary cap doesn't apply. They just won't fax to other companies, advertising the jobs. Now if they agreed to not hire each other's employees...

You think it is ok for those companies to cooperate with each other and be forced to not only share employee salaries, but also not be able to offer a prospect employee a higher salary? Basically ending competition over the employee? And you think this is ok?

Do you not see how this forces the employee to either work at the large firm for the low pay or basically move out of their sector altogether? Do you realize smaller companies can't really afford to pay what big companies can anyway, so this type of collusion basically suppresses the employee's compensation and you think this is ok?
post #32 of 51
Quote:
Originally Posted by Rot'nApple View Post

ATP licensed regional carrier airline pilots with a few years under their belt versus CDL licensed public transit workers (bus drivers) with a few years under their belt comes to mind. \
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I guess you don' know how little the regional pilots make. And the job description isn't anywhere near the same, you can drive a bus for a living after a free after-you-are-hired two week training course. It takes over $30K in paid-by-the-pilot civilian training and flight time and another two to three years of hustling as a flight instructor to get enough flight time for an application to even be accepted. Then 60% of those pilots cannot pass the Airline Transport Pilot check and are let go as high time dead-end copilots.

Flying even a regional is a hairy dangerous undertaking made safe by the pilots training. 155 miles an hour hurling at the ground at about 300 feet per minute when there is only about 45 seconds of crappy visibility between popping out of the clouds and hitting the runway. Miss touchdown alignment by as little as two degrees and rip off your tires, and crash onto the belly.

Miss a turn with a bus by 10 degrees and you probably don't hit anything. Almost every American trains at driving from 15 years old in high school and will never see 100 MPH, let alone 155 on the ground at the controls.

Yeah, I suggest you tell your next regional pilot they are overpaid because they only make about 10K per year more than a starting city bus driver, and less than a high seniority bus driver.

No, I'm not an airline pilot of any sort, never was, didn't want to be and I even can't be due to a medical condition. But I know the business.
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post #33 of 51
Quote:
Originally Posted by alienzed View Post

As a computer professional, I'd like to hear you name some other occupations that require a similar level of training and skill that aren't as well paid please.

Sure:

http://www.bls.gov/oes/current/oes_nat.htm#15-0000

(All numbers are median hourly wage)
Computer and Mathematical Science: $35.05
Architecture and Engineering: $33.07
Life and Physical Science: $28.03
Education, Training, and Library: $21.04

All of those are careers that typically require a 4 year education (although most Engineering is now 5 years).
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post #34 of 51
The point ISN'T about pay... In fact I read somewhere that this guy filing the lawsuit is donating any judgement he receives to charity.. 100% of it... It is about big companies cooperating to suppress the employee's pay and career advancement...

Here is an analogy:

You have your house placed on auction: The base auction price of your house is set at $250k, you are looking for a fair price, you're not sure what it is, but you know it is much higher than the minimum.

There are multiple houses up for auction so the people bidding all collude to not outbid each other... so EVERYONE GETS THEIR HOUSES AT THE MINIMUM PRICE!!!

That is the point! So basically your house in this example went at the minimum price of $250k... IMAGINE THAT HAPPENING with your career advancement and salary...

This has absolutely nothing to do with how much these engineers are being paid. Let it be $10/hour, let it be $1000/hour... it doesn't matter... if $10 is fair, then so be it as long as it is reached as part of fair market with no collusion.
post #35 of 51
Quote:
Originally Posted by CryoTech View Post

The point ISN'T about pay... In fact I read somewhere that this guy filing the lawsuit is donating any judgement he receives to charity.. 100% of it... It is about big companies cooperating to suppress the employee's pay and career advancement...

Here is an analogy:

You have your house placed on auction: The base auction price of your house is set at $250k, you are looking for a fair price, you're not sure what it is, but you know it is much higher than the minimum.

There are multiple houses up for auction so the people bidding all collude to not outbid each other... so EVERYONE GETS THEIR HOUSES AT THE MINIMUM PRICE!!!

That is the point! So basically your house in this example went at the minimum price of $250k... IMAGINE THAT HAPPENING with your career advancement and salary...

This has absolutely nothing to do with how much these engineers are being paid. Let it be $10/hour, let it be $1000/hour... it doesn't matter... if $10 is fair, then so be it as long as it is reached as part of fair market with no collusion.

Except that's not what is being alleged. The allegations are that these companies have an agreement not to poach employees from the other - that is, the company will not go after employees. The employees are free to seek jobs at the other companies - and that has happened a lot.

Not only are the compsci salaries far above what other comparable employees receive (see above), but computer science employees tend to change jobs much more frequently than most employees - so the alleged misbehavior apparently isn't working.
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post #36 of 51
Quote:
Originally Posted by jragosta View Post

Except that's not what is being alleged. The allegations are that these companies have an agreement not to poach employees from the other - that is, the company will not go after employees. The employees are free to seek jobs at the other companies - and that has happened a lot.

Sorry to disagree with you, but have you read the lawsuit? the DOJ findings?... This isn't about just anti-poaching...

These companies discussed what the salaries were and WERE NOT allowed to outbid each other.. example:

You're working at google and you decide to apply at Apple... If you applied there, Apple would have to contact Google and tell them that you are applying there and they've decided to hire you. Google would then tell them "jragosta is making $80k/year here"... Apple would have to offer you $80k and can NOT offer you more than that due to their arrangement.

I'm sorry but you need to do more research if you're going to make comments like this... please read the official lawsuit...

Quote:
Originally Posted by jragosta View Post

Not only are the compsci salaries far above what other comparable employees receive (see above), but computer science employees tend to change jobs much more frequently than most employees - so the alleged misbehavior apparently isn't working.

Do you realize that a lot of the positions at LucasFilm, Google, Apple that were affected by this weren't for people with compsci backgrounds?... Well obviously you didn't realize this.. but a lot of the people affected by this were Artists and non-engineers... They're far more vulnerable as well and they're already underpaid as it is... Overall, this was a shitty thing for those companies to get together and do... And actually it says it in the lawsuit documents too that majority of the positions affected were artists, designers (creative people).. sorry, no offense to engineers, but they're not considered Creative...

How many engineers vs artists work at Pixar?... that's right.. This guy fighting for us just happens to be an engineer, but doesn't mean he's just got a soft spot for engineers.
post #37 of 51
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post #38 of 51
Quote:
Originally Posted by CryoTech View Post

Sorry to disagree with you, but have you read the lawsuit? the DOJ findings?... This isn't about just anti-poaching...

These companies discussed what the salaries were and WERE NOT allowed to outbid each other.. example:

You're working at google and you decide to apply at Apple... If you applied there, Apple would have to contact Google and tell them that you are applying there and they've decided to hire you. Google would then tell them "jragosta is making $80k/year here"... Apple would have to offer you $80k and can NOT offer you more than that due to their arrangement.

I'm sorry but you need to do more research if you're going to make comments like this... please read the official lawsuit...

Sorry, but I don't believe in 'guilty until proven innocent'. Unless you expect me to believe that every claim ever made in a lawsuit is true, then those claims are meaningless.

The fact is that the salaries in the computer industry are far higher than people with similar skills in other industries. That suggests strongly that the salaries are not being artificially restrained.
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post #39 of 51
Quote:
Originally Posted by jragosta View Post

Sorry, but I don't believe in 'guilty until proven innocent'. Unless you expect me to believe that every claim ever made in a lawsuit is true, then those claims are meaningless.

The fact is that the salaries in the computer industry are far higher than people with similar skills in other industries. That suggests strongly that the salaries are not being artificially restrained.

Your point is what again?... The DOJ already slapped these guys for what they did. Plus you are going on and on about the salaries being inflated when clearly majority of the people affected by this were artists and non-engineers who make like 40k - 50k/year... Not to mention the fact that the issue is salary fixing and collusion, and has nothing to do with what you're talking about.
post #40 of 51
Quote:
Originally Posted by jragosta View Post

The fact is that the salaries in the computer industry are far higher than people with similar skills in other industries. That suggests strongly that the salaries are not being artificially restrained.

I thought the issue was salary fixing... which is stated in the lawsuit.
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