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Apple, Google & others could pay 'blindingly high' $9B in anti-poaching class-action suit

post #1 of 90
Thread Starter 
A class-action lawsuit from tech sector employees against employers including Apple and Google seeks some $9 billion in lost wages --?an astronomical sum that the complainants could ultimately receive, some believe, thanks to a mountain of evidence appearing to implicate Silicon Valley employers in an alleged no-hire cartel.

Jobs and Schmidt
Steve Jobs and Eric Schmidt during the iPhone's introduction at MacWorld in 2007.


About 100,000 employees are involved in the lawsuit, seeking a payment of about $90,000 per person -- a payment The New York Times characterized this week as a "blindingly high number." But the employees are apparently confident in seeking $9 billion because the evidence against employers, who are accused of agreeing to anti-poaching agreements that may have been anticompetitive, and thus may have kept down employee wages.

As the class-action lawsuit progresses, strong evidence has emerged revealing that Apple, Google and others privately agreed to not recruit one another's employees. Late Apple co-founder Steve Jobs himself placed a call to Google's Sergey Brin in which he threatened "war" over recruitment efforts from the rival company.

Jobs also made similar requests of other top company execs like Edward Colligan, former CEO of erstwhile handset maker Palm. Colligan refused to enter any such agreement, however, saying that it was "likely illegal."

Materials from the trial also reveal that Apple's human resources department sent out an email identifying that Google employees were part of a "hands-off" list. Apple, Google, Adobe, Intel and others are accused of participating in an "overarching conspiracy" to keep employee wages down through anti-poaching agreements.

Privately, the accused companies reportedly believe the $9 billion sum is "extortion." But the 100,000 employees of the class-action suit are said to believe the evidence is "damning" and "embarrassing" enough that they could come away with a big payday.

Email from Sergey Brin


Lawyers contacted by the Times said that while anti-poaching agreements in specific instances may be permissible, blanket bans such as the ones it appears Silicon Valley had in place are "plainly anticompetitive." And even tech company executives appear to have known the policy was potentially illegal, as former Intel CEO Paul Otellini said in one disclosed email that he would not like for the anti-poaching agreement to be "broadly known."

The class-action suit is scheduled to go to trial in San Jose in May. However, the parties involved are currently engaged in settlement talks out of court.

Apple and others made a last-ditch request to prevent the trial last month, but a judge denied their efforts and said the trial will proceed. The plaintiffs in the case were granted class status last October by U.S. District Court Judge Lucy Koh. Since then, the number of plaintiffs have ballooned from some 64,000 past and present employees to six figures' worth of workers.

The U.S. Department of Justice leveled its own lawsuit regarding the matter after investigating Apple, Adobe, Google, Intel, Intuit, and Pixar for the same anti-poaching measures. The defendants ultimately settled with the DOJ in 2010.
post #2 of 90
My only question is, how is DoJ/Government going to use this money.
post #3 of 90
This wouldn't have happened if Steve....oh wait...
post #4 of 90

From: One Company CEO
To: Another Company CEO
CC: Some Executives

Subject: FW: Something Illegal

Hey, we are meeting to agree on this illegal activity. In our last meeting and phones calls we agreed on these illegal things.... So let not talk about this illegal activity by email. We don't want to create a paper trail.

Sincerely,

CEO
Can it even get more stupid than this?
post #5 of 90
$9 billion isn't even the cost of a Motorola. Chump change to Google.

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post #6 of 90

Although I do not support anti-poaching agreements, I can sympathize with the employers' dilemma here. Having your key employees being continuously recruited and scheduling meetings, is very distracting to the employee and I doubt they can focus 100% on their work while thinking about those opportunities. These employees are already getting paid the big bucks and they're aware of their value in the market, and if they're not happy with their current job, they can simply apply at another company and it won't be poaching.

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post #7 of 90
Poaching is by its nature selective. The higher wages that some employees might have made if they had been "poached" would not have affected the salaries of other employees. That would be like saying that when an NFL free agent signs a big contract with another team it raises the salaries of all players on all teams.
post #8 of 90

Where's the actual damage to the employees?

 

From what I've seen this "agreement" doesn't prevent an employee from looking for work where they choose to - it prevents company A from actively trying to lure away an employee from company B. As such, I don't see how any employee could be harmed. Nobody is "forcing" them to stay with the company they're currently employed with.

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post #9 of 90
Quote:
Originally Posted by EricTheHalfBee View Post

Where's the actual damage to the employees?

From what I've seen this "agreement" doesn't prevent an employee from looking for work where they choose to - it prevents company A from actively trying to lure away an employee from company B. As such, I don't see how any employee could be harmed. Nobody is "forcing" them to stay with the company they're currently employed with.

Being able to look one one's own for a better job elsewhere is one thing. But a pact among employers to withhold information that there are better-paying opportunities for individuals has the practical effect of collusion to reduce compensation paid in the marketplace. It amounts to price-fixing on the buyers' side. Treble damages, anyone?

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post #10 of 90
Quote:
Originally Posted by EricTheHalfBee View Post

Where's the actual damage to the employees?

From what I've seen this "agreement" doesn't prevent an employee from looking for work where they choose to - it prevents company A from actively trying to lure away an employee from company B. As such, I don't see how any employee could be harmed. Nobody is "forcing" them to stay with the company they're currently employed with.

Many employees are required to agree to a 'non-compete' clause, and often held to it even if fired.
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post #11 of 90
I completely agree with your assessment. This law suit will decrease poaching anyway. Companies like Apple will bring more and more of their work in house instead of partnering with other companies who are secretly planning to compete with them in every sector. This way they don't have to worry about providing a partner who is planning to compete with access to key employees.
post #12 of 90
So apple and Google are finally teaming up
post #13 of 90
Quote:
Originally Posted by dorkus maximus View Post

Poaching is by its nature selective. The higher wages that some employees might have made if they had been "poached" would not have affected the salaries of other employees. That would be like saying that when an NFL free agent signs a big contract with another team it raises the salaries of all players on all teams.
As I was reading the article, I wondered how sports teams salary caps, which are aimed to keep players wages down has managed to survive scrutiny.
post #14 of 90

Scenario: Company A needs some employees with skill set X. They know company B has such employees, but because of this agreement they do not attempt to recruit employees from company B.

 

The employees never know of this opportunity. That hurts their wages and opportunity - maybe they're happy working for company B but would like the chance to work on company A's cool project, or company A has some minor perk that the employee would be willing to change jobs for (slightly shorter commute, better cafeteria).

 

Even if employees from B have resumes on file at A, they may get passed over because of this agreement.

 

Company A instead files for some H1-B visas because they "can't" find qualified employees in the U.S.

 

IMHO, the companies should get slapped and the employees get a nice Christmas bonus. Hopefully it won't all go to the lawyers and the employees get a $10 gift card to Starbucks.

 

- Jasen.

post #15 of 90

"may have" to me is a really loaded term. These actions may have kept their wages low because it may have resulted in the employees not being able to seek a higher paying job or it may have simply given the current employer the balls not to give them a raise. 

 

But they may have not been hired for that job or may have not been given that raise anyway, because they didn't earn it. 

 

To me the right or wrong of this matter depends on how the agreement was worded. If it was 'we will not ever ever consider hiring someone who is currently working for a competitor' that is wrong. If it was that they would not only not hire someone currently at a competitor but also 'someone that left a competitor within say the last year (in a firm and written down promise to all parties and followed consistently)', that is wrong. 

 

To me, if the deal was 'we will not actively seek out those working for your company and attempt to get them to reveal how much they are getting paid, what projects they are working on (that might not be public knowledge yet) etc so that we might intentionally lure them away from you because they are working for you' then I don't see that as wrong. Such games are crude and impede actual work. 

 

As for wages etc, to me it's crude and uncalled for that someone would, as implied, use job offers shoved at them by other companies as a tool to get more money. Get it cause you earned it not with what amounts to blackmail (Google is offering me $20k more a year, yeah i told them how much i make and no i don't care that that's against some stupid company rule. now pay me that much or I'll break my contract and go work for them)

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post #16 of 90
Quote:
Originally Posted by jasenj1 View Post
 

Scenario: Company A needs some employees with skill set X. They know company B has such employees, but because of this agreement they do not attempt to recruit employees from company B.

 

The employees never know of this opportunity. That hurts their wages and opportunity - maybe they're happy working for company B but would like the chance to work on company A's cool project, or company A has some minor perk that the employee would be willing to change jobs for (slightly shorter commute, better cafeteria).

 

I don't recall anything in these deals that says they can't advertise for people. Or that employees of a company can't look for such advertisements. So how exactly does 'promise not to call up folks and tell them that there is a job opening' equate to them not knowing it exists. In this day and age it doesn't. If they have an interest in perhaps moving to another company then its on them to find the openings, using all the varied tools available to them

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post #17 of 90
Quote:
Originally Posted by Michael_C View Post

As I was reading the article, I wondered how sports teams salary caps, which are aimed to keep players wages down has managed to survive scrutiny.

Free agency would be that reason. Professional sports leagues are exempt from many laws, antitrust being one of them.
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post #18 of 90
Quote:
Originally Posted by winstein2010 View Post

My only question is, how is DoJ/Government going to use this money.

 

This is a class-action lawsuit filed on behalf of employees. The DOJ has nothing to do with it. 

 

I hope the employees win and I hope they get their $9 billion. This sort of anti-competitive collusion needs to be severely punished. 

post #19 of 90
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Originally Posted by winstein2010 View Post

My only question is, how is DoJ/Government going to use this money.

 

Oh man, don't go down that road...

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post #20 of 90
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Originally Posted by dasanman69 View Post


Many employees are required to agree to a 'non-compete' clause, and often held to it even if fired.

 

This is what I don't understand about this situation.  As an employee, co-founder, and VP in the software business for decades, I was always under non-compete agreements.  Those agreements can and sometimes do list specific companies for which an employee is forbid to work at for a period of, typically, 18 months after the end of their employment with the company with which the non-compete is executed.  So my question is, why didn't each company simply place every valued employee under a non-compete agreement listing specific competitors?  And given that non-competes, of some sort, were likely in place for valued employees, who are the 100,000+ employees who are suing?  Those who were not under non-compete agreements and would likely not have been recruited away anyway?

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post #21 of 90
Quote:
Originally Posted by charlituna View Post
 

 

I don't recall anything in these deals that says they can't advertise for people. Or that employees of a company can't look for such advertisements. So how exactly does 'promise not to call up folks and tell them that there is a job opening' equate to them not knowing it exists. In this day and age it doesn't. If they have an interest in perhaps moving to another company then its on them to find the openings, using all the varied tools available to them

"agreed to not recruit one another's employees"

 

That goes to the definition of "recruit" and how deep the agreement on not hiring people away from each other went. Maybe there was a handshake, wink & a nod agreement that the companies would not hire employees from each other. So even if one did see the ad and apply, company A wouldn't consider your resume because you worked for company B.

 

"Materials from the trial also reveal that Apple's human resources department sent out an emailidentifying that Google employees were part of a "hands-off" list."

 

And, if "recruiting" is a standard business practice to obtain employees, and these companies agreed not to do it to each other, that's anticompetitive collusion and gets a slap.

post #22 of 90
Quote:
Originally Posted by Michael_C View Post

As I was reading the article, I wondered how sports teams salary caps, which are aimed to keep players wages down has managed to survive scrutiny.

Team salary caps are there to enable small market teams to compete with large market. Cities like New York or LA generally have more cash to throw at players. If there were no salary caps, smaller teams would never be able to get any star players as large market teams would just outbid them.
post #23 of 90
Quote:
Originally Posted by winstein2010 View Post

My only question is, how is DoJ/Government going to use this money.

More illegal arms trafficking or hookers, I presume.

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post #24 of 90

I have not followed this closely and maybe someone here has been.

 

I have not seen any evidence stated that any company agree not to hire someone for any of these companies. I see that as an illegal activity since it bars you from getting a job at any of those company who agree to do that. All I have seen is the companies agree to not actively recruit from each company, in my mine that mean that Company A will not attempt to find out who is doing what at Company B and calling them and offering them a job at Company B. Grant it most companies HR department never call into another company, they usually hire a third part to do their dirty work.

 

Again I have not seen any evidence where an employee said they were interested in leaving Company A and put their resume out on the market and attempted to get an interview at Company B and was told they would not be interview since they currently worked for Company A. This could be illegal since it does keep someone from getting a new job. 

 

However, I have work at a company which everyone agree not to interview people from a particular company since those people where just hacks and it was waste of everyone time to even talk to those people. It was a case that you working for the wrong company and no one wanted to interview you, but it was not because the two companies got together.

 

I also highly doubt that any of those 100,000 people in the case will see anywhere $90K, look what happen when the government sued the tobacco industry back in the 90's the people who die or were dying did not get the billions that the government won, it all went into pet government programs.

 

With all the case the government is winning against company like Apple, investment banking and such this is how they closing the gaps in their spending. I never saw a dine from the monies I lost from the idiot on wall street playing their games, but the government keep talking about all the fines and such they won against those companies.

post #25 of 90
Quote:
Originally Posted by Michael_C View Post

As I was reading the article, I wondered how sports teams salary caps, which are aimed to keep players wages down has managed to survive scrutiny.

Because the NFL and other major sports franchises are effectively legal monopolies with the express consent of lawmakers. There is a rich history of the corrupting influence of sports and huge amounts of money permeating public and private education, political graft and a public willingness to look the other way when they are provided bread and circuses.

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post #26 of 90
If they felt they were that valuable they should have gotten off their fat asses and started looking elsewhere. Even if to go to a non no poach partner for a couple years then hop back into the pool. Wine, wine, whimper, and Whine.
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post #27 of 90
Quote:
Originally Posted by Maestro64 View Post

I have not followed this closely and maybe someone here has been.

I have not seen any evidence stated that any company agree not to hire someone for any of these companies. I see that as an illegal activity since it bars you from getting a job at any of those company who agree to do that. All I have seen is the companies agree to not actively recruit from each company, in my mine that mean that Company A will not attempt to find out who is doing what at Company B and calling them and offering them a job at Company B. Grant it most companies HR department never call into another company, they usually hire a third part to do their dirty work.

Again I have not seen any evidence where an employee said they were interested in leaving Company A and put their resume out on the market and attempted to get an interview at Company B and was told they would not be interview since they currently worked for Company A. This could be illegal since it does keep someone from getting a new job. 

However, I have work at a company which everyone agree not to interview people from a particular company since those people where just hacks and it was waste of everyone time to even talk to those people. It was a case that you working for the wrong company and no one wanted to interview you, but it was not because the two companies got together.

I also highly doubt that any of those 100,000 people in the case will see anywhere $90K, look what happen when the government sued the tobacco industry back in the 90's the people who die or were dying did not get the billions that the government won, it all went into pet government programs.

With all the case the government is winning against company like Apple, investment banking and such this is how they closing the gaps in their spending. I never saw a dine from the monies I lost from the idiot on wall street playing their games, but the government keep talking about all the fines and such they won against those companies.

Government is the biggest extortion and blackmail racket on Earth.

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post #28 of 90
Quote:
Originally Posted by bloggerblog View Post
 

Although I do not support anti-poaching agreements, I can sympathize with the employers' dilemma here. Having your key employees being continuously recruited and scheduling meetings, is very distracting to the employee and I doubt they can focus 100% on their work while thinking about those opportunities. These employees are already getting paid the big bucks and they're aware of their value in the market, and if they're not happy with their current job, they can simply apply at another company and it won't be poaching.

I wouldn't say its that distracting. It generally starts with a phone call with someone asking if your interested. If a company doesn't want their staff poached they should be focussing on making the staff always answer that their not interested because what they've already got is so good.

Quote:
Originally Posted by charlituna View Post

 

As for wages etc, to me it's crude and uncalled for that someone would, as implied, use job offers shoved at them by other companies as a tool to get more money. Get it cause you earned it not with what amounts to blackmail (Google is offering me $20k more a year, yeah i told them how much i make and no i don't care that that's against some stupid company rule. now pay me that much or I'll break my contract and go work for them)

It might be crude, but I wouldn't call it uncalled for. If your employer is under paying you compared to the market you should call them out on it. There either going to give you the pay rise because you do deserve it or there going to say no because you don't.

 

In general companies don't pay you more than they have too. When you hire people you offer a competitive salary, but when your doing pay rises you pay the minimum you think someone needs to stay with the company.

post #29 of 90

I suspect that Steve's thought wasn't "Lets save money and screw these engineers", but rather "I've got the best people and you other losers can't have them!" Google and the rest may have thought of it as cost saving, but I suspect Apple thought of it as talent retaining.

Doesn't change the douchebaggery, and Steve should have just manned up and paid the ones he wanted enough to keep them from leaving, and if someone else had someone he wanted, he should have paid enough to get them to blink. I kind of wish Apple would just own past mistakes and pay up. Even if they paid the whole $9B to take the high road it would be chump change in the big picture. 

post #30 of 90
Quote:
Originally Posted by GordonPrice67 View Post
 

I suspect that Steve's thought wasn't "Lets save money and screw these engineers", but rather "I've got the best people and you other losers can't have them!" Google and the rest may have thought of it as cost saving, but I suspect Apple thought of it as talent retaining.

Doesn't change the douchebaggery, and Steve should have just manned up and paid the ones he wanted enough to keep them from leaving, and if someone else had someone he wanted, he should have paid enough to get them to blink. I kind of wish Apple would just own past mistakes and pay up. Even if they paid the whole $9B to take the high road it would be chump change in the big picture. 


I agree it was probably more about wanting to keep the best people with the thought that Apples best people are better than their competitors and therefore this deal would be better for Apple. But at the same time he or someone else at Apple must have thought it would be cheaper and easier to retain people by taking away the potential jobs rather than incentivising them to stay. Even to the point where they thought the benefits of doing it this way would also out way the negative reaction when their employees found out about it.

 

I still get shocked by just how much of a dumb idea it really was and that they actually did it.

post #31 of 90
Quote:
Originally Posted by Rogifan View Post

This wouldn't have happened if Steve....oh wait...

 

Well in some sense Apple is either paying for or having to deal with decisions made by its founder years ago. Jobs apparently made decisions sometimes without considering the legal ramifications down the road. 

post #32 of 90
Quote:
Originally Posted by RadarTheKat View Post
 
 As an employee, co-founder, and VP in the software business for decades, I was always under non-compete agreements.  

In California restraints on trade, aka non-compete agreements, are illegal and void for employees and independent contractors.

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post #33 of 90
Anti-poaching agreements are certainly bad, but I'm not sure I'd sign on to this lawsuit, were I one of those involved. $90,000 isn't a lot of money in comparison to becoming known as a troublemaker. Delay in getting a job a couple of times might cost more than that.
Also, as another poster noted, this isn't an open-and-shut case. If these companies can show that employees of one company who, on their own initiative, applied for work at another got hired, it's hard to show damages. The harm suffered is only the result of what those employees themselves did, which was not seek work elsewhere.
post #34 of 90
Quote:
Originally Posted by lkrupp View Post

Well in some sense Apple is either paying for or having to deal with decisions made by its founder years ago. Jobs apparently made decisions sometimes without considering the legal ramifications down the road. 
Absolutely. Steve was a genius in many ways, but apparently not in employment law. If his in-house counsel knew at the time about Steve's phone calls, he should have warned him.

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post #35 of 90
Quote:
Originally Posted by Michael_C View Post

As I was reading the article, I wondered how sports teams salary caps, which are aimed to keep players wages down has managed to survive scrutiny.
Salary cap is not aimed at keeping players wages down.
It is aimed at making teams have equal buying power in that a rich owner cannot simply buy whoever they want to have an unbeatable team.
post #36 of 90
Quote:
Originally Posted by winstein2010 View Post

My only question is, how is DoJ/Government going to use this money.

The US Government has nothing to do with this case. This is a class-action brought by the affected employees.
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post #37 of 90
Quote:
Originally Posted by SpamSandwich View Post


Government is the biggest extortion and blackmail racket on Earth.

 

Aside from the obvious objections to such an absurd view, this is a class action lawsuit.  Nothing to do with Government.  Unless you think there shouldn't be laws or courts in general.

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post #38 of 90
Quote:
Originally Posted by jasenj1 View Post
 

Scenario: Company A needs some employees with skill set X. They know company B has such employees, but because of this agreement they do not attempt to recruit employees from company B.

 

The employees never know of this opportunity. 

 

- Jasen.

 

Please. Are you telling me that Company A never advertises for employees or has any other methods to let the tech industry know about positions?

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post #39 of 90
Quote:
Originally Posted by lkrupp View Post
 

 

Well in some sense Apple is either paying for or having to deal with decisions made by its founder years ago. Jobs apparently made decisions sometimes without considering the legal ramifications down the road. 

 

Riiiiight. And Apple is the only company being sued here?

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post #40 of 90
Quote:
Originally Posted by EricTheHalfBee View Post

Riiiiight. And Apple is the only company being sued here?

Nope. Google was plainly evil for playing along as were the rest of them. But it apparently all began with threats from Steve Jobs. Google, Adobe and others were to cowtow to his demands or face the consequences. Frankly I'm shocked that few of the Valley elite thought these consequences were the wiser and less fearful than the wrath of Jobs.
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